Post on 30-Oct-2014
transcript
ITCs E-Choupal Transforming lives of farmersPooja Choudhary Priyanka Kejriwal
AgendaMandi System Mandi Distribution System Mandi Operation Process Limitations of Mandi System
E-Choupal
E-Choupal System Benefit for ITC and farmers Technology Characteristics E-Choupal Services
Scope
Choupal saagar Efficiency and Sustainable solution Vision Challenges
Mandi Distribution SystemFarmer Village trader Ghani
Wholesaler
Regulated markets/ Mandis Trader (Pukka adatiya)
Producer Co-ops
Commission Agents (Kachha Adatiya)
Private oil miller
Cooperative Mill
Mandi Operation process
Inbound Logistics
Display and inspection
Auction
Bagging and Weighing
Payment
Outbound logistics
Limitations of Mandi SystemSystem Crop quality subject to weather conditions as crop is displayed in open weather No proper way of monitoring crop quality Fluctuating prices favoring the buyer Prices set locally and reliably tracked and reported nationally No incentive for improving quality to farmers thus lowers quality Multiple handling points requires produced to be bagged increasing loading time by 4-5 times
Farmers Bear the cost of transportation ,stay, bagging and weighing Loss of 1-2 kgs per quintal as weighers under-weigh Never receive the full purchase price Farmer has to make several return trips to receive entire amount costing them time and money
ITC Agents control of market leads to distortions of price and quality Agents inflate prices to trading companies Agents mix superior and inferior quality produce together Agents are aware of intra-day prices and take advantage of that Officially agents margin : 1% , ITC estimates it to be upto 3%
ITC e-ChoupalStarted in 2000 Target: 6500 kiosks, 10 states,40000 villages Designed to address issues like Fragmented farms Weak institutions Involvement of intermediaries Information asymmetry
Transactions through ITC e-Choupal
e-Choupal SystemWeighing and Payment Sample is taken for laboratory tests Bonus Points in case of better quality
Pricing Previous days Mandi Closing Price Price Communicated through Sanchalak Commission agents at mandi enter daily mandi prices
Inspection and Grading Farmer brings a sample of produce to e-Choupal Sanchalak inspects the product, performs the quality check and quotes the price
Hub Logistics Farmer collects payment and get reimbursed for transport Samyojaks handle hub logistics, transport, bagging etc, 0.5% commission
Model Choupal Nagar
Whats in it for the farmer? Real time information despite Distances Increased yields Improved Quality Better price Reduction in Transaction costs Faster Transaction Electronic weighing scales More Transparent and reliable system
Whats in it for ITC? Better supply chain for ITCs Food & Agri Businesses in terms of Costs, Quality Intermediary cost reduced from 2.5% to 0.5% Payment for transport cost reduced by half Long term relationship with farmers Supply Security Plan future operations based on information from Sanchalaks and Samyojaks
Transaction Cost - Mandi
Transaction cost - Choupal
e-Choupal Services Relevant & Real-time Information Commodity prices, Local Weather, News
Customised Knowledge Farm Management, Risk Management
Direct Marketing Channel for Farm Produce Lower Transaction Costs
Supply Chain for Farm Inputs Screened for Quality
Education Basic training to Sanchalaks
Financial services Life, General, Health & Crop Insurance Easy to capture credit history, lower transaction costs
ITC Choupal SaagarMade-to-design agri-business hubs ITC agri-sourcing centre Shopping centre Facilitation centre 24 Choupal Saagar hubs are already in operation in 3 states, to grow to 100 by 2010.
Sustainable solutionsWhat are the solutions? Knowledge transfer Co-operative application of technology Mobilization and optimization of local resources
How is it being implemented? Develop water and forest resources: Soil fertility Adopt soil and water management practices Superior farming methods: Farm yields
Efficiency of e-Choupal networkCrop Specific Intervention Inefficiencies in supply chain Magnitude and timing of e-Choupal Low cost last mile Penetrations into areas having population < 5000
Intelligent first mile Avenue to see farmers ideas Farmers suggesting products and servicesBi-directional demand and supply of goods and services Build a close relationship with farmers Data mining and data warehousing: consumer behavior
Growth of e-Choupal
ITC e-Choupal Scale
e-Choupal States covered Villages covered No. of e-Choupals Farmers e-empowered
Now 10 40,000 6,500 4.9 million
Challenges faced by e-choupal Check the authenticity of information As power and numbers of sanchalaks increase, there is a threat of unionization The scope of operation: the diversity of activities required of every operative and the speed of expansion Increased expectations of the farmers
Future StrategyStrategy Wave 2 (Post- Pilot) Wave 3 (Post Pilot) Value proposition Identity preservation ITCs intervention Food type Grade of grain determines its end use Perishable food products Food safety Example Procurement Wheat (UP)
Traceability
Production level
Shrimp
Wave 4 (Pilot)
Creating institutions
Market place for multiple buyers and sellers Knowledge of business, customer and prior experience
Markets have reached high degree Coffee of efficiency Value added products to rural India
Wave 5 (Conceptual)
Rural marketing and distribution strategy
Wave 6 (Conceptual)
Sourcing IT enabled services from rural India
Eco-tourism Traditional Crafts, medicine
Thank You