e Choupal 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.
Traditionally, these commodities were procured in "mandis" (major agricultural marketing centres in rural areas of India), where the middleman used to make most of the profit. These middlemen used unscientific and sometimes outright unfair[citation needed] 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 neutralised.
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 centres 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 reorganised role. Indeed these middlemen make up for the lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and transportantion.
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 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. At the same time ITC Limited also has extracted value in four steps to make the model sustainable and scaleable:
1.elimination of non-value added activities
2.differentiated product through identity preserved supply chains
3.value added products traceable to farm practices
4.e-market place for spot transactions and support services to futures exchange[citation needed]
One of the factors leading to eChoupal's success is ITC's managerial expertise in executing complex projects and managing costs. ITC Limited adopted a flexible project management approach called "roll out, fix it, and scale up" to deal with uncertainties in a pioneering model.[citation needed]
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.
For more information see my link http://www.scribd.com/doc/24936333/echoupal-case-study
Traditionally, these commodities were procured in "mandis" (major agricultural marketing centres in rural areas of India), where the middleman used to make most of the profit. These middlemen used unscientific and sometimes outright unfair[citation needed] 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 neutralised.
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 centres 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 reorganised role. Indeed these middlemen make up for the lack of infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and transportantion.
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 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. At the same time ITC Limited also has extracted value in four steps to make the model sustainable and scaleable:
1.elimination of non-value added activities
2.differentiated product through identity preserved supply chains
3.value added products traceable to farm practices
4.e-market place for spot transactions and support services to futures exchange[citation needed]
One of the factors leading to eChoupal's success is ITC's managerial expertise in executing complex projects and managing costs. ITC Limited adopted a flexible project management approach called "roll out, fix it, and scale up" to deal with uncertainties in a pioneering model.[citation needed]
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.
For more information see my link http://www.scribd.com/doc/24936333/echoupal-case-study
