October 2005

Development Gateway Award 2005

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The Development Gateway Award recognises the most exemplary contribution in the field of Information and Communication Technologies (ICT) for development during the last ten years. This award helps in understanding the ICT's role in development and recognise leaders in the field. The award's focus is on ICT's impact on social and economic development. The degree of the success, scale and replicability, sustainability, transparency, and the importance of the contribution to a development priority, such as poverty reduction are considered for the selection of the winner.

e-Choupal, a programme of ITC Ltd. of India, has been chosen as the winner of the Development Gateway Award 2005 from a group of 135 nominees The $100,000 award recognises e-Choupal's impact in enabling millions of farmers in India to improve their livelihoods with access to information on growing and marketing their products. The award was presented at the Development Gateway Forum 2005 on September 16 in Beijing to ITC Chairman Y. C. Deveshwar. The award, previously known as the Petersberg Prize, was presented by Frannie Laautier, vice-president of the World Bank Institute in the presence of Austin Hu, Deputy Chief of Mission in Beijing for the World Bank, and Alan J. Rossi, CEO, Development Gateway Foundation. Last year, Grameen Bank-Village Phone won the award for helping women entrepreneurs start small businesses providing wireless phone service in rural areas of Bangladesh.

ITC e-Choupal today reaches out to and empowers over 3.5 million farmers over 31,000 villages by enabling them to readily access crop-specific, customised and comprehensive information in their own language. Vernacular websites relating to each agricultural crop that ITC deals in, created by the company, provide real-time information to even the smallest marginal farmers on the prevailing Indian and international prices and price trends for their crop, expert knowledge on best farming practices, and micro-level weather forecast.

ITC e-Choupal has already received several national and international awards as a unique transformation model for rural India. ITC's initiative has earlier won the inaugural 'World Business Award' instituted in support of the United Nations' Millennium Development Goals. ITC e-Choupal also won the Wharton-Infosys 'Enterprise Business Transformation Award 2004' for the Asia-Pacific region. The curriculum of the Harvard Business School now includes a case study on the ITC e-Choupal movement and how it is enabling a paradigm shift in Indian agriculture. The ITC e-Choupal strategy also forms part of management guru C.K.Prahlad's latest book, 'The Fortune at the Bottom of the Pyramid'.

ITC e-Choupal has also recently commenced a pilot project for providing rural health services through its network of Internet kiosks in partnership with one of the leading private health service providers. There is also a plan to launch educational services through the network in the coming months and the award money of $100,000 will supplement the programme. Receiving the award, Chairman Y. C. Deveshwar said, “By delivering essential healthcare and educational information, we can extend the benefits of e-Choupal more deeply into the fabric of communities across India”.

Over the next decade, the ITC e-Choupal network aims to cover over 100,000 Indian villages, representing 1/6th of rural India, and create more than 10 million e-Farmers. Thanking Development Gateway for the award, Deveshwar said, “By recognising programmes like ours, the Development Gateway Foundation is spurring on the use of information technologies in communities worldwide, to build grassroots capacities and enhance the quality of life.”

For more details, visit: www.developmentgateway.org/award
www.echoupal.com






S Siva Kumar
Chief Executive-Agri Businesses
ITC Limited
sivakumar.s@itc.co.in


What was the background of developing the ITC e-Choupal concept?

e-Choupal was conceived as a more efficient supply chain to source agricultural commodities for our export business. Efficiency was achieved through direct interface with the farmer and by leveraging the capabilities of traditional intermediaries. Soon, we realised that the same infrastructure can connect villages efficiently with rest of the world, into or out of villages. Now e-Choupal is universal platform for rural India.

Was there any model followed to establish this project?
No. It is uniquely architected to suit the conditions of rural India. However, for different components of the model, we do benchmark with different global best players. For agri commodity sourcing, we benchmark with Cargill, for distribution with ITC, for retailing with Walmart, for exchange with eBay, for customer intelligence with Capital One and for farmer empowerment with Amul.  

How did ITC popularise the concept of e-Choupal in a developing country like India?
The concept is designed to suit a developing country like India. We neither charge the farmer for information delivered through the platform, nor do we compel them to transact with us after he accesses such information. We gain by capturing the latent value in the broken value chains of a developing economy. So it is bound to be popular naturally.

What are the major socio-economic changes brought by e-Choupal in the area concerned?
The changes are more economic at this time. When the farmers sell to ITC, their transaction costs are much lower than the mandi system. Farmers have more choices to sell their produce, and they can exercise the same empowered by the information available on the e-Choupal portal. This helped improve their bargaining power even when they sell to other channels. The best farming practices knowledge disseminated through e-Choupal, together with access to scientists' panel set up by ITC, the crop yields are increasing too. On the whole, farmers estimate their incremental incomes due to e-Choupal anywhere between 20 and 50%.

e-Choupal has brought about several social changes too. Since we insisted on one kiosk only in a village whereas the farmers prefer at least two, each managed by a Sanchalak from different caste/religion. So, within a season the villages have overcome caste/religion barriers to access economic benefits. Children of Sanchalaks learn computers rapidly, bridging the digital divide. The education initiave through e-Choupal will extend to other children too. Most important social change that e-Choupal brought about, I believe, is the dignity of choice to the rural people.

Has any initiative been taken yet by ITC to replicate e-Choupal in any other developing country?
No, at this time we are focusing on rolling out the initiative across India. There is a long way to go before we cover India itself. Indeed, several governments as well as multilateral agencies such as World Bank, International Finance Corporation (IFC), CARE, ADB etc. have been keen on supporting replication of e-Choupal in other developing countries in South and South East Asia and Africa. Because of our focus on India, we had to regret. But we did offer to assist any such initiative elsewhere through knowledge sharing, if some organisation comes forward to anchor.  

What are the key success factors of e-Choupal?
ITC's corporate philosophy to create shareholder value through serving society helps make a strategic choice like e-Choupal which have prolonged period of investment with an equally long gestation. ITC's deep insights into agricultural value chains and socio-cultural dynamics of rural India helped design this innovative business model. Then, the ITC businesses such as foods and agri exports offered anchor support through large volume off-take of farm produce from e-Choupals.

What constraints and challenges have been faced by the e-Choupal project?
Weak infrastructure in rural India has been our biggest challenge. We had to make large investments to overcome the shortage of power and telecom bandwidth. Every state we were moving into had to first reform the Agricultural Produce Marketing Committee Act (APMC Act) before we could transact the first grain.

Can public-private partnership play major role in successful implementation of such kind of project?
Certainly. In e-Choupal itself, partnerships with the Public Research System to access the agricultural knowledge generated by them and with the Public Weather Monitoring System to access the weather information have played a major role.

Which organisational supports have played major role in e-Choupal to achieve high success?
In addition to the partnerships, support of both central government and all the State governments, where we are operating, has been critical. Particularly the Ministries of Agriculture are supporting by piloting the APMC reform process. As e-Choupal model itself is collaborative by design, support of all partner companies contributed substantially to the success of e-Choupal.


Can you share with us any unique experience associated with this project?
Right in the beginning, when we had kept two days aside to train the first lot of Sanchalaks in Internet usage, they learnt all of that in two hours and said “What next?” Last month, our Sanchalaks successfully conducted annual 'Sammelans' (meetings) at more than a hundred locations with a level of ownership that demonstrated that e-Choupal is truly a 'Kisanonka hithme, Kisanonka Apna' (Benefitting the farmers, farmer's own) organisation. 

How do you feel after winning the Development Gateway award?
Many people have a biased opinion that only Governments, NGOs and multilateral aid agencies are the custodians of public good in this world, and that the motives of private sector is to be always viewed with suspicion. Development Gateway Award to ITC e-Choupal is a wider public recognition of our conviction that private sector too can play a critical role in achieving Millennium Development Goals and making this world a better place for all.

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