E-CHOUPAL

An initiative of ITC

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 ITC;-HISTORY

 ITC was incorporated on August 24, 1910 under the name Imperial
Tobacco Company of India Limited.
 The name of the Company was changed to India Tobacco
Company Limited in 1970 and then to I.T.C. Limited in 1974.
 after September 18, 2001, The Company now stands
rechristened 'ITC Limited
 The Company's headquarter building, 'Virginia House', is in Kolkata.
 At present ITC chairman is Mr.Y.C.DEVESHWAR
 SWOT Analysis ITC :-ITC is one of India’s biggest and best-known
private sector companies.

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 ABOUT: ITC
PRODUCTS & SERVICES

 FMCG:- Cigarettes &

Cigars,Foods,Lifestyle,Retailing, Personal
Care,Education & Stationery,SafetyMatches,
Agarbattis

 Hotels

 Paperboards & Packaging

 Agri-Businesses:- Agri Commodities & Rural

Services,Leaf Tobacco, Spices & Agri Inputs:
eChoupal
 InformationTechnology
 GroupCompanies 3
ITC's Agri Business Division (ITC-ABD) is engaged in the trading of a
wide range of Agri Commodities and Aqua Foods.

 It holds a principal position in a number of international markets

is backed by sound technical expertise,

a strong proprietary knowledge of the Indian farming system and

a competency to cater to customer specific requirements

ITC-ABD today has the enviable reputation of being the most reliable
Indian supply chain partner for select global buyers of India's finest
Agri and Aqua offerings.
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 E-CHOUPAL: what is it?

 It is a unique web based initiative of itc-abd

 Offers the farmers all the information ,products & services to enhance farm
productivity
 Improve farm gate prices,
 Cut transaction costs
 Access to farmers about latest local and global information on weather,scientific
farming practice as well as market prices at the village itself
 Enabled with web portal –in regional languages
 Facilitate supply of high quality farm inputs as well as purchases of commodities at
farmers door step.
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CONCEPTUALISED BY:-

 He is the Chief Executive of the Agri Businesses Division of ITC Limited,

India. This US$ 900 million division is engaged in sourcing a variety of
agricultural products, commodity exports, rural marketing and specialty
retailing.

 He has conceptualised the Mr. S. Sivakumar path-breaking e-Choupal model

and is spearheading its roll out across the country. With a vision to cover
100,000 villages by 2012, ITC eChoupal aims to increase incomes and
improve the quality of life in rural India while delivering sustainable
shareholder value

 Sivakumar is a Director on the Boards of NABARD, ITC Infotech India Ltd.,

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 E-choupal: a big picture

ITC’s (ABD): one of India’s largest exporters of agricultural commodities, has

conceived e-Choupal as a more efficient supply chain aimed at delivering value
to its customers around the world on a sustainable basis.

The e-Choupal model has been specifically designed to tackle the challenges
posed by the unique features of Indian agriculture, characterised by fragmented
farms, weak infrastructure and the involvement of numerous intermediaries,
among others
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 The Status of Execution

 Launched in June 2000,

 'e-Choupal', has already become the

largest initiative among all Internet-based
interventions in rural India.

 e-Choupal' services today growing to a

range of crops - soyabean, coffee, wheat,
rice, pulses, shrimp

 across ten states (Madhya Pradesh,

Haryana, Uttarakhand, Karnataka, Andhra
Pradesh, Uttar Pradesh, Rajasthan,
Maharashtra, Kerela and Tamil Nadu).

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 Why e-Chaupal?

e-Chaupal 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.

Traditionally, these commodities were procured in 'mandis' :- where the

middleman used to make most of the profit. These Middlemen used
unscientific 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 e-Chaupal, the farmers have a choice and the exploitative power of
the middleman is neutralized.

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 Root Causes and Implications

ROOT CAUSES IMPLICATION

Weak Bargaining Power

Fragmentation No access to real-time
Dispersion information
Heterogeneity Need for customized knowledge

CHALLENGE

Dependence on middlemen
Weak
(exploitative cycle of
Infrastructure
dependency)
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 CHALLENGES IN APPLICATION
The problems encountered :

 infrastructural inadequacies,
 power supply,
 telecom connectivity and bandwidth,
 challenge of imparting skills to the first
time internet users in remote and
inaccessible areas of rural India.

Several alternative and innovative solutions

 Power back-up through batteries charged

by Solar panels,
 upgrading BSNL exchanges with RNS kits,
installation of VSAT equipment,

 Mobile Choupals, local caching of static

content on website to stream in the
dynamic content more efficiently,

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 The Model in Action

 ‘e-Choupal’ makes use of the physical transmission capabilities of current

intermediaries – aggregation, logistics, counter-party risk and bridge
financing –while disintermediating them from the chain of information flow
and market signals.

 village internet kiosks managed by farmers – called sanchalaks –

themselves, enable the agricultural community access ready information in
their local language on the weather & market prices, disseminate
knowledge on scientific farm practices & risk management, facilitate the
sale of farm inputs (now with embedded knowledge) and purchase farm
produce from the farmers’ doorsteps (decision making is now information-
based).

 Real-time information and customised knowledge provided by ‘e-Choupal’

enhance the ability of farmers to take decisions and align their farm output
with market demand and secure quality & productivity. ‘e-Choupal’
eliminates wasteful intermediation and multiple handling. Thereby it
significantly reduces transaction costs.

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 The Value Chain - Farm to Factory Gate

 e-Choupal’ also unshackles the potential of Indian farmer who has

been trapped in a vicious cycle of low risk taking ability > low
investment > low productivity > weak market orientation > low
value addition > low margin > low risk taking ability.

 This made him and Indian agribusiness sector globally

uncompetitive, despite rich & abundant natural resources. 13
 How does it work?

• ITC 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..
• 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.

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 How is it useful to farmers?

 A local farmer acting as a coordinator or 'Sanchalak' runs

this amenity ,e-choupal
 He receives a small commission from farmers who wish to
use this facility.

 Farmers use the computer to access daily closing prices of

local mandis, international prices as well as details about
new farming techniques.

 The computer at the e-Choupal may also be utilized for

ordering seed, fertilizers and other products from ITC or
its partners at discounted prices.

 During the harvest season, ITC proposes to buy the crop

directly from farmers at the previous day's closing price.


Each e-Choupal costs between US$3,000 and US$6,000 to
set up and around US$100 annually for maintenance. They
usually serve an average of 600 farmers within a five km
radius.

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 Development Benefit
 The e-Chaupal system gives farmers more control over their
choices,
 a higher profit margin on their crops,
 and access to information that improves their productivity.
 provide more transparent process and empowering local people
 ITC increases trust and fairness.
 The increased efficiencies and potential for improving crop quality
 making Indian agriculture more competitive.
 Despite difficulties in electric power, infrastructure and sometimes
limit hours of use, the system also links farmers and their families to
the world.
 Some sanchalaks track future prices on the national as well as local
mandi prices and
 village children have used the computers for schoolwork, games and
to obtain and print out their academic test results.
 The result is a significant step toward rural development

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 The principle of the e-Chaupal

The principle of the e-Chaupal is to inform, empower

and compete. At the same time ITC Limited also has
extracted value in four steps to make the model
sustainable and scaleable:-

 Elimination of non-value added activities

 Differentiated product through identity preserved supply
chains
 Value added products traceable to farm practices
 e-market place for spot transactions and support
services to future exchange.

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 1 2 &3 of e-choupal

• Version 1.0

 The Start IDEA: To give power of scale to small farmers by

aggregating them as sellers (of produce) and as buyers (of farm
inputs)

 FARMERS’ GAIN: They get bargain and choice - the two key virtues
of competition

 ITC’S GAIN: Access to inputs for its agri business; offer the use of
network to other companies

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 1 2 &3 of e-choupal contd…

• Version 2.0
 The Scale-up REACH: millions of farmers
 OFFERING: Network now offered five services:

• Information: weather, price, etc.

• Knowledge: farming methods, soil testing, etc.
• Purchase: Seed, fertiliser...to insurance
• Sales: Farmers sell crops to ITC centres
• Other: Cattle care, water harvesting, women employment etc

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 1 2 &3 of e-choupal contd

• Version 3.0
 The Deepening NEW BUSINESSES: Add two new anchor
businesses:
 1) Rural jobs and employability and
 2) Personalised agri services. Plus strengthen existing
commodity sourcing
 MORE INTERACTION: Through Choupal Saagars and Haats and
via mobile phones
 NEW TECHNOLOGY: Use of especially enabled mobile phones, in
addition to PCs, for two-way interaction with farmers; use of
analytics; new partners
 The latest version also provides employment opportunities to
rural youths and has helped fill 1,200 job openings from 52
companies.
 But Version 3 has gone beyond just helping rural India to reduce
its pressure on land.

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 Version -3
Under the new version,
ITC plans to address the
sustainability angle of
the Indian agricultural
sector by promoting the
practice of green
farming.

 "The company is now

pushing farmers to
adopt organic farming
as well as reducing of
greenhouse gas
emissions, 21
 E-choupal:e-empowering indian farmers
E-CHOUPAL NOW
STATES COVERED 10
VILLAGES COVERED 40000
NO OF E-CHOUPAL 6500
FARMERS 4 MILLION
EMPOWERED

e-Choupal leverages the Internet to empower small and marginal farmers

By providing them with farming knowledge, timely and relevant information,
e-Choupal enabled economic capacity to proliferate at the base of the rural
economy

Cited in the Government of India’s Economic Survey of 2006-07, for its

transformational impact on rural lives
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Nokia Partners with ITC e-Choupal
(Rural India):-
NOKIA LIFE TOOLS

 As per the (MOU), Nokia and ITC will collaborate

to offer Nokia Life Tools to offer updated
information on the agriculture sector

 provides information on seeds, fertilizers,

pesticides, market prices, and weather
(temperature, rainfall, wind conditions) via their
mobile phones.

 aim to provide career and education services,

including English language learning, General
Knowledge, Exam preparations and results, as
well as career information and tips.

 offers fun features, including astrology, news,

ringtones etc.

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 farmer’s response
 As India’s ‘kissan’ Company, ITC has taken care to involve farmers in the designing
and management of the entire ‘e-Choupal’ initiative.

 The active participation of farmers make the ‘e-Choupal’ as the new age cooperative
for all practical purposes.

 This enthusiastic response from farmers has encouraged ITC to plan for the
extension of the ‘e-Choupal’ initiative to altogether 15 states across India over the
next few years.

 On the anvil are plans to channelise other services related to micro-credit, health
and education through the same 'e-Choupal' infrastructure.

 Another path-breaking initiative – the ‘Choupal Pradarshan Khet’, brings the

benefits of agricultural best practices to small and marginal farmers

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 Envisioning a larger societal purpose has
always been a hallmark of ITC. The
company sees no conflict between the twin
goals of shareholder value enhancement
and societal value creation. The challenge
lies in fashioning a corporate strategy that
enables realisation of these goals in a
mutually reinforcing and synergistic manner.

 As a corporate citizen with enduring

relationships in rural India, ITC has a
history of collaboration with communities
and government institutions to enhance
farm productivity and the rural resource
base. ITC’s commitments in agricultural
R&D and knowledge sharing have spanned
vital aspects of competitiveness – efficient
farm practices, soil and water management.

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 AWARDS TO ITC:E-CHOUPAL

 The Development Gateway Award:2005

ITC is the first Indian company and the
second in the world to win this prestigious award.

 The 'Golden Peacock Global Award for Corporate Social Responsibility

(CSR) in Emerging Economies :2005'.

 United Nations Industrial Development Organisation (UNIDO)Award:

2008

 The Ashoka - Changemakers ‘Health For All’ Award :2006

 Innovation for India Award: 2006
 The Corporate Social Responsibility Award :2004
from The Energy and Resources Institute(TERI)
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 e-Choupal: Vision
YEAR:2005 YEAR:2010
Kiosks: 5000 Kiosks: 15000+
Villages: 30,000 Villages:100,000
Farmers: 3.5 million Farmers:10million

There are 6,500 e-Chaupals today. ITC Limited plans to scale up to

20,000 e-Chaupals by 2012 covering 100,000 villages in 15 states,
servicing 15 million farmers 27
 Choupal mahotsav

 ITC e-Choupal and Impact Communications launched Choupal Mahotsav,

New Delhi, March 16, 2010

 ITC e-Choupal, in association with Delhi based rural marketing agency

Impact Communications, launched Choupal Mahotsav, a rural marketing
initiative, in Uttar Pradesh.
 It was held in 24 choupal saagars in u.p

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THANK YOU

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Sources:-
www.echoupal.com
www.marginalrevolution.com
www.govtech.com
www.itc.com

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Presented by:-

Sachin gupta
saching422@gmail.com
INDIA
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