Itc E Choupal Case Study Ppt Templates
ITC e-ChoupalWeakness of e-choupal
Although e-choupal helps eliminate the middleman and therefore allows farmers to get a better price for what they grow, it does nothing to solve the more fundamental problem of the inherent inefficienciescreated by so many tiny farms.In addition, it relies on infrastructure, which is often lacking in rural communities. Electricity andtelecommunication services can sometimes be less than 100 percent reliable in some of the places where e-choupal has been implemented. Finally, although there is no longer a middleman, e-choupal can be no moreeffective than the sanchalak (coordinator) in each community.
ITC in conjunction with local farmers created the e-choupal system that is acting asa catalyst in rural transformation by providing access to latest information of theagro sector, developing local leadership and creating a profitable distribution. It helps in alleviating rural isolation, improves productivity and income, createtransparency for farmers - which improves the economic condition of rural areas.This paper tries to identify the problem of mandi, need of e-choupal and challengesin development of e-choupal and derives with various conclusion and suggestions in‘future strategy’ from initial finding and discusses direction for further investigation.
Agriculture is the backbone of Indian economy producing 23 percentof GDP, and employs 66 percent of workforce. Because of the greenrevolution, India’s agricultural productivity has improves to the pointthat it is both self-sufficient and a net exporter of a variety of food grains, yet mostIndian farmers have remained poor. The causes include remnants of scarcity-eraregulation and an agricultural system based on small, inefficient land holdings. Theother constraints are weak infrastructure, numerous intermediaries, excessivedependence on the monsoon variation between different agro-climate zones, andmany others. The unfortunate result is inconsistent quality and uncompetitive prices,making it difficult for the farmers to sell his produce in the world market. ITC’s trail-blazing answer to these problem is the - e-choupal initiative; the single largestinformation technology-based intervention by a corporate entity in rural India that istransforming the Indian farmer into progressive knowledge-seeking netizens.Enriching the knowledge of farmers & elevating them to a new order of empowerment. ITC aims to confer the power of expert knowledge on even thesmallest individual farmer enhancing its competitiveness in the global market.
The traditional model
Indian farmers rely on Department of Agriculture, govt. universities, insurancecompanies etc. for various inputs such as weather, modern and scientific farmingpractices and insurance cover. Farmers approach input retailers who source themfrom wholesalers who are in direct contact with manufacturers. After harvest,farmers bring these produce to mandis; in small multiple lots throughout the year,where beans are auctioned to the traders and agents of the processing companies inan open outcry method. The government facilitate fair price discovery and enableaggregation of goods, regulate these market yards. Successful bidders then bed thebeans, weigh them, pay part cash to the farmers, and transport the cargo to theprocessing units.
e-Choupal is an initiative of ITC Limited, a conglomerate in India, to link directly with rural farmers via the Internet for procurement of agricultural and aquaculture products like soybeans, wheat, coffee, and prawns. e-Choupal tackles the challenges posed by Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of intermediaries. The programme installs computers with Internet access in rural areas of India to offer farmers up-to-date marketing and agricultural information.ਸ਼
Effects of e-Choupal
ITC Limited has provided 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. Online access enables farmers to obtain information on mandi prices, and good farming practices, and to place orders for agricultural inputs like seeds and fertilizers. This helps farmers improve the quality of their products, and helps in obtaining a better price.
ITC Limited kiosk with Internet access is run by a sanchalak — a trained farmer. The computer is housed in the sanchalak's house and is linked to the Internet via phone lines or by a VSAT connection. Each installation 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 a service fee for the e-transactions done through his e-Choupal. The warehouse hub is managed by the same traditional middle-men, now called samyojaks, but with no exploitative power due to the reorganisation. These middlemen make up for the lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and transportation.
Since the introduction of e-Choupal services, farmers have seen a rise in their income levels because of a rise in yields, improvement in quality of output, and a fall in transaction costs. Even small farmers have gained from the initiative. Farmers can get real-time information despite their physical distance from the mandis. The system saves procurement costs for ITC Limited. The farmers do not pay for the information and knowledge they get from e-Choupals; the principle is to inform, empower and compete. e-market place for spot transactions and support services to futures exchange
There are 6,100 e-Choupals in operation in 40,000 villages in 10 states, affecting around 4 million farmers.
- Bhatia, Tej K. 2007. Advertising and marketing in rural India. Delhi: Macmillan India
- Chapter 11 of this book deals with the economic and developmental impact of e-Choupal.
- Goyal, Aparajita. 2010. Information, Direct Access to Farmers, and Rural Market Performance in Central India. American Economic Journal: Applied Economics, Vol. 2, No. 3, pages 22–45.