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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