presentationscmitce-choupalfinal1-121204200035-phpapp02[1].pptx

7/29/2019 presentationscmitce-choupalfinal1-121204200035-phpapp02[1].pptx

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Group 16 1DOW RESTRICTED - For internal

use only


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India is second most populated country in the world.

Agriculture is the backbone of Indian economy. It contributes around 26% of the total GDP.

Agriculture provides livelihood to about 65% of the labour force

and accounts for 8.56% of India's exports.

The fragmented farms are constraining the risk taking ability. Large arable land, Rich & diverse agroclimatic zones

Heavily dependent on Monsoon

Strong institutional base in R&D

Large domestic consumption base

Poor extension work at farm levelNumerous intermediaries

Weak infrastructure & inconsistent quality

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Hindi word meaning- Village meeting

Virtualmarket place where farmers can transact directly with a

processor and can realize better price for their produce developed by

ITC agri-business division

Brainchild of S Sivakumar

Promoted by Y.C.Deveshwar, Chairman, ITC

Launched in June 2000

Largest Internet-based initiative in rural India

Benefits 4million farmers in 40000 villages

Target Area so far 38,000 villages, 6500 kiosks, 9 states

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Why it became a success?

Only initiative that attempted to combine Services and an

Effective Business Model successfully

Designed to address the issues such as:

1. Fragmented farms

2. Weak institutions

3. Involvement of intermediaries

4. Information Asymmetry

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Farmer

Agri-InputCompanies

Dealer/

StockiestRetailer

Agril University,Met Dept,

Insurance Co.

VLW (of Dept of

Agriculture)

Money

Lender

Pakka Adtiya

(Registered Dealer)

Kaccha Adtiya

(Un-Registered Dealer)

Trader

Broker

Processor

ITC-IBD

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The Tactical

Imperative

Capture of Intra-dayPrice shifts

Seasonal priceInflation

Daily price inflation

ITCs distance fromFarmer

The Strategic

Imperative

Horizontal spread

Vertical presence

Risk management

The Social

Imperative

Farmers profit

InformationAsymmetry

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To enhance farm productivity by

Disseminating latest information on district level weather forecasts

for short & medium terms

Best practices in farming

Supply of quality inputs (seed, herbicide, fertilizer, pesticides etc)

in the village itself

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To improve price realization for farm produce by

Making available live data on markets viz. Location / Buyer

wise prices offered.

International market prices of relevant agri-commodities.

Historical & Up-to-date information on supply & demand.

Expert opinion on expected future price movements.

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Helps minimize transaction costs in marketing farm produce by

Buying output directly from the farmers

Through transparent pricing & weight management practices

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ITC accumulates information regarding weather, modern

farming practices, and market prices from sources like

Meteorological Department, Agri-universities, mandis

(regional market) etc., and uploads all information on to e-

Choupal web site.

It is an interlocking network of partnerships (ITC + Met Dept

+ Universities + Input COs + Samyojaks, the erstwhile

Commission Agents) bringing the best-inclass information,knowledge and inputs.

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Customer centric

Used for many commodities & multiple transaction

Easily scalable

Uses local talent & local people & develops local leaders Extended to local as well as global procurers

Nurtures local entrepreneurs.

Uses all the existing institutions & legal frameworks

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o Crop-specific interventiono Low-cost last mile

Ties with ITCs larger goal of transforming the e-Choupalnetwork into a distribution superhighway

o Intelligent first mileTransforming farmers from being consumers to participantsin the process of product design


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o Social impact with increase in ITCs mileage: Social impact of e-Choupals ranges from short-term provision of internet access tothe long-term development of rural India as a competitivesupplier or buyer of a range of goods and services

o Reengineer, not reconstructKeeping efficient providers while creating roles for someinefficient providers from the existing system

o Address the whole, not just a partCreated an alternative to village trader services by addressingthe entire gamut of needs by creating access to agricultureextension services

o Selection & maintaining credibility of Sanchalaks


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ITC communicates with Sanchalaks through the e-choupalportal

Price benchmark made wrt mandis closing price

Sanchalak inspects produce for quality, make appropriatedeductions to benchmark price and generates a note for the

farmer This note is produced to the nearest ITC procurement hub

Farmer bears the risk of transportation for the producedelivered that is reimbursed by ITC

Inspection& Grading

Weighing& Pricing

InboundLogistics

Weighing& Payment

HubLogistics


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Better information Access to price at several

nearby outletsBetter use of time Access to price choice

prior to visiting mandi

Transportation cost ITC compensates itssellers

Transportation duration ITC no more than fewhours in the entireprocess

Weighing accuracy ITC electronic scales are

accurate and impartialGranularity of weighing Single weighing concept

eliminates the risk ofpilfering

Professionalism anddignity

Dignity accorded tofarmers by a professionalprocess

Betterprice

Lowerlogistic

cost

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Disintermediation saving Commission paid to agentsreplaced for only a half percent ofcommission to the Sanchalak

Freight cost Only half the cost paid to farmersas compared with agents initially

Risk management Long term supplier relationshipwith its farmers. The information

yielded allows ITC to better planfuture operations

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Non familiarity with internet usage for firsttime users

ITC also had to surmount regulatory barriers. The Agricultural

Produce Marketing Committee Act (APMC Act) prohibits the

purchase of specified commodities (including several that ITCdeals in) from any source other than government-designated

mandis. ITC had to convince political systems of state

government

Rural India faces the problems of infrastructure bottlenecks

such as outdated telephone exchanges, frequent electricity

outage, and unreliable Internet connectivity.

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Commission agents- even after compensating for lost income,they had lower income after the e-Choupal

Mandi laborers- severely impacted. ITCs long term vision to

employ them in the hubs

Bazaars near the mandi-farmers diverted to shops near the ITC

hubs, diversion of revenue

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It is a low cost/multi business model operated by thefarmer representative.

E-choupal has been one of the best ICT application platforms

that has been scaled replicated and sustained

The Sanchalaks are selected carefully and they have been ableto induce the feeling of involvement

E-choupal has provided economic benefits even for the

small farmers. Every beneficiary gets benefit and the equitable

benefits make the adoption very rapid

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