Echoupal

MMK: BMS

PROF. KALE

ITC eCHOUPAL eChoupal is an initiative of ITC Limited (a large multi business conglomerate in India) to link directly with rural farmers for procurement of agricultural / aquaculture produce like soybeans, wheat, coffee, and prawns. eChoupal was conceived to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries. The great idea of e-Choupal was to invent a new business model, farmer centric, co-build with it clients, without avoiding the intermediaries, and using existing infrastructures. Problems faced by FarmersTraditionally, these commodities were procured in "mandis" (major agricultural marketing centers in rural areas of India), where the middleman used to make most of the profit. These middlemen used unscientific and sometimes outright unfair means to judge the quality of the product to set the price. Difference in price for good quality and inferior quality was less, and hence there was no incentive for the farmers to invest and produce good quality output. With eChoupal, the farmers have a choice and the exploitative power of the middleman is neutralized. Effects of E choupalITC Limited has now established computers and Internet access in rural areas across several agricultural regions of the country, where the farmers can directly negotiate the sale of their produce with ITC Limited. The PCs and Internet access at these centers enable the farmers to obtain information on mandi prices, good farming practices and place orders for agricultural inputs like seeds and fertilizers. This helps farmers in improving the quality of produce, and also helps in realizing a better price. Each ITC Limited kiosk having an access to Internet is run by a sanchalak — a trained farmer. The computer housed in the sanchalak’s house is linked to the Internet via phone lines or by a VSAT connection and serves an average of 600 farmers in the surrounding ten villages within about a 5 km radius. The sanchalak bears some operating cost but in return earns service fee for the e-transactions done through his eChoupal. The warehouse hub is managed by the same traditional middle-men, now called samyojaks, but with no exploitative power due to the reorganized role. Indeed these middlemen make up for the lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and transportation. Due to the eChoupal services, farmers have seen a rise in their income levels because of rise in yields, improvement in quality of output and a fall in transaction costs. Even small farmers have gained from the initiative. Customized and relevant knowledge is offered to the farmers despite 1

MMK: BMS

PROF. KALE

heterogeneous cultures, climates and scales of production. Farmers can get real-time information despite their physical distance from the "mandis". The system saves procurement costs for ITC Limited. The model is quite different from the other models, as the farmers do not pay for the information and knowledge they get from eChoupals. The principle of the eChoupals is to inform, empower and compete. There are 6,500 eChoupals today. ITC Limited plans to scale up to 20,000 eChoupals by 2012 covering 100,000 villages in 15 states, servicing 15 million farmers. Strategies that ITC can use to influence the farmers to be a part of EChoupal: •

Rope in influencers- As it is believed that the sarpanch, teachers, doctors etc play a very important role in influencing the villagers, ITC could rope in such influencing people to be a part of E-Choupal and these people could thereby influence the villagers to be a part of ITC’S echoupal. ITC can use these influencing people in their promotion efforts as well.

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Corporate social responsibility-The villagers believe that the big companies can do no good to them. They believe that all these companies can do is exploit them.ITC could conduct some social activities such as educating children, conducting health camps etc in the villages in order to convince the people that ITC is working towards their betterment and it does not want to exploit them.

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Creating awareness about E choupal and its advantages- ITC can educate the farmers about the benefits of E-Choupal and try to convince them that by joining E-Chopal they could get better prices than what they are receiving at present for their products.

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Use existing farmers- ITC can also use its existing farmers (those farmers who are a part of E-Choupal) to convince others (farmers) to join in. They (existing farmers) can do so by telling the people how their life has improved after working with ITC.

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ITC can educate the farmers how to use and benefit from technology- E-Choupal basically involves the use of computers, in order to promote its strategy ITC needs to first conduct workshops and seminars in order to train the farmer to use and to benefit from technology.

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Convince farmers that get can get better price for better quality products- Traditionally difference in price for good quality and 2

MMK: BMS

PROF. KALE

inferior quality goods was less, and hence there was no incentive for the farmers to invest and produce good quality output. With eChoupal, the farmers can now get appropriate price for their products.

GINA JOGESHWAR TYBMS A ROLL NO.25

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