The document discusses ITC's e-Choupal initiative, which aims to empower rural Indian farmers through internet kiosks located in village gathering places. The kiosks, run by trained local farmers, give other farmers access to market prices, farming best practices, and the ability to purchase supplies and sell crops directly to ITC. This cuts out intermediaries and allows farmers to get better prices. The initiative has expanded across India, offering additional services. It has helped farmers but also benefits ITC's procurement processes. The e-Choupal model is continually developed with new versions to deepen its impact and services for farmers.

1. Mohanpur, Nadia, West Bengal – 741252
Department of Agricultural Economics
Project Report On
ITC’s e-Choupal
“A Platform Strategy for Rural Transformation”
Under the supervision of Submitted By:
Sanjib Mukhopadhay Nabanita Adhikari
B.Sc (Ag.), 7th
Semester, 4th
module

2. E-CHOUPAL: ITC’S RURAL NETWORKING PROJECT
In Hindi a Choupal is a village gathering
place. The e-Choupal initiative—whereby
a Choupal is equipped with a computer and
Internet connectivity—is the brainchild of
a large agricultural processing company in
India, the Indian Tobacco Company (ITC).
The initiative was conceived to tackle the
challenges posed by certain features of
Indian agriculture, such as fragmented
farms, a weak infrastructure, and the
involvement of numerous intermediaries.
Although the primary objective of the
project was to bring efficiency to ITC’s
procurement process, an important
byproduct is the increased empowerment of rural farmers where e-Choupal have been
established. The e-Choupal initiative directly links the rural farmers with the company for the
procurement of agriculture and aquaculture products, such as soybeans, coffee, and prawns.
Traditionally, these commodities were procured by such companies as ITC from mandis (major
agricultural marketing centers in rural areas of India), and a long chain of intermediaries was
involved in buying the produce from farmers and moving it to the mandis. Through e-Choupal,
these farmers can directly negotiate the sale of their produce with ITC. The PCs and Internet
access at these centers
enable the farmers to
obtain information on
mandi prices and
good farming
practices, and to place
orders for agricultural
inputs, such as seeds
and fertilizers. This
access to information
helps farmers in
improving the quality
of produce and
obtaining better
prices. Elected from
the village itself, a
literate farmer acts as
the interface between
the illiterate farmers
and the computer. The
e-Choupal model has
been effective in the
short term. However, because of multiple variables that affect productivity, a long-term
assessment of the system’s productivity and efficiency levels needs to be undertaken.

3. Why e-Choupal:
Rural India is a difficult business location. Transport, electric power, and information
infrastructure are inadequate. Business practices are underdeveloped or outdated. Lack of access
to modern resources has resulted in an under-trained workforce. Rural society is structured
around subsistence and is unprepared for modern products and services. These constraints, along
with many others, have dissuaded most companies from taking on the challenge of rural
commerce. Yet such an engagement can serve a dual agenda: bridging rural isolation and the
resulting disparities of education and economic opportunity, while at the same time creating a
potentially large profit opportunity for the organization willing to tackle the inefficiencies. The
key question is how modern resources and methods can be practically deployed to profitably
overcome rural constraints.
 Small Landholdings
 Low literacy , Low Income
 Weak Infrastructure : Physical , Social
 Underserved on supply side
 Over dependence on intermediaries
 Low productivity – Low share of consumer spend
 They do not have bargaining power
 They do not have access to real time information
 They cannot get customized knowledge advise

4. E-CHOUPAL: what is it?
 It is a unique web based initiative of ITC-ABD
 Offers the farmers all the information ,products
& services to enhance farm productivity
 Improve farm gate prices,
 Cut transaction costs
 Access to farmers about latest local and global
information on weather, scientific farming
practice as well as market prices at the village
itself
 Enabled with web portal –in regional languages
 Facilitate supply of high quality farm inputs as well as purchases of commodities at
farmers door step.
How is it useful to farmers?
 A local farmer acting as a coordinator or
'Sanchalak' runs this amenity ,e-choupal
 He receives a small commission from farmers
who wish to use this facility.
 Farmers use the computer to access daily closing
prices of local mandis, international prices as well
as details about new farming techniques.
 The computer at the e-Choupal may also be
utilized for ordering seed, fertilizers and other
products from ITC or its partners at discounted
prices.
 During the harvest season, ITC proposes to buy the crop directly from farmers at the
previous day's closing price.
 Each e-Choupal costs between US$3,000 and US$6,000 to set up and around US$100
annually for maintenance. They usually serve an average of 600 farmers within a five km
radius.

5. How does it work?
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 centers enable the farmers
to obtain information on mandi prices,
good farming practices and place orders
for agricultural inputs like seeds and
fertilizers.
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.

6. The Status of Execution
 Launched in June 2000,
 'e-Choupal', has already become the largest
initiative among all Internet-based
interventions in rural India.
 e-Choupal' services today growing to a range
of crops - soyabean, coffee, wheat, rice,
pulses, shrimp
 across ten states (Madhya Pradesh, Haryana,
Uttarakhand, Karnataka, Andhra Pradesh,
Uttar Pradesh, Rajasthan, Maharashtra,
Kerela and Tamil Nadu).
A digital transformation
ITC began the silent e-volution of rural India with soya
growers in the villages of Madhya Pradesh. For the first
time, the stereotype image of the farmer on his bullock cart
made way for the e-farmer, browsing the e-Choupal
website. Farmers now log on to the site through Internet
kiosks in their villages to order high quality agri-inputs, get
information on best farming practices, prevailing market
prices for their crops at home and abroad and the weather
forecast –all in the local language. In the very first full
season of e-Choupal operations in Madhya Pradesh, soya
farmers sold nearly 50,000 tons of their produce through the
e-Choupal Internet platform, which has more than doubled
since then. The result marks the beginning of a transparent
and cost-effective marketing channel. Bringing prosperity to the farmers' doorstep.

7. Linking farmers to remunerative markets
Farmers grow wheat across several agro-climatic zones,
producing grains of varying grades. Though these grades had the
potential to meet diverse consumer preferences, the benefit never
trickled down to the farmers, because all varieties were
aggregated as one average quality in the mandis. Enter ITC's e-
Choupal intervention. The e-Choupal site is now helping the
farmers discover th e best price for their quality at the village
itself. The site also provides farmers with specialised knowledge
for customising their produce to the right consumer segments.
The new storage and handling system preserves the identity of different varieties right through
the 'farm-gate to dinner-plate' supply chain. Encouraging the farmers to raise their quality
standards
and attract
higher
prices.
(ITC's mobile vans take the message of e-Choupal to new villages.
Thereafter, virtual helpdesks enable the farmer to find solutions to his
problems through online interactions. ITC has set up VSAT links to
overcome connectivity problems)
Managing risks through technology
What’s and ifs in the aqua farmers' life posed daunting odds. They were haunted by the
nightmare of contaminated soil, wrong levels of salinity
in the water or the killer White Spot virus, any of which
could wipe out an entire shrimp crop, until the e-Choupal
site provided them the support and the know-how to cope
with and manage such risks. Information equips farmers

8. with comprehensive know-how to keep abreast of food safety norms to compete in the
international market. Information includes parameters for antibiotic usage, hygienic washing,
sanitized dressing and air-tight packing. All these factors help to neutralize the risks involved in
aqua farming. Making it economically much more attractive, benefiting hundreds of aqua
farmers.
1 2 &3 Version of e-choupal :1 2 &3 Version of e-choupal :
Version 1:Version 1:
 The StartThe Start IDEA:IDEA: To give power of scale to small farmers by aggregating them as sellersTo give power of scale to small farmers by aggregating them as sellers
(of produce) and as buyers (of farm inputs)(of produce) and as buyers (of farm inputs)
 FARMERS’ GAIN:FARMERS’ GAIN: They get bargain and choice - the two key virtues of competitionThey get bargain and choice - the two key virtues of competition
 ITC’S GAIN:ITC’S GAIN: Access to inputs for its agri business; offer the use of network to otherAccess to inputs for its agri business; offer the use of network to other
companies.companies.
Version 2.0Version 2.0
 The Scale-upThe Scale-up REACH: millions of farmersREACH: millions of farmers
 OFFERING: Network now offered five services:OFFERING: Network now offered five services:
••Information: weather, price, etc.Information: weather, price, etc.
• Knowledge: farming methods, soil testing, etc.• Knowledge: farming methods, soil testing, etc.
• Purchase: Seed, fertilizer, etc• Purchase: Seed, fertilizer, etc
• Sales: Farmers sell crops to ITC centre• Sales: Farmers sell crops to ITC centre
• Other: Cattle care, water harvesting, women employment etc• Other: Cattle care, water harvesting, women employment etc
Version 3.0
 The Deepening NEW BUSINESSES: Add two
new anchor businesses:
 1) Rural jobs and employability and
 2) Personalized agri services. Plus strengthen
existing commodity sourcing
 MORE INTERACTION: Through Choupal
Saagars and Haats and via mobile phones
 NEW TECHNOLOGY: Use of especially enabled
mobile phones, in addition to PCs, for two-way
interaction with farmers; use of analytics; new
partners
 The latest version also provides employment
opportunities to rural youths and has helped fill
1,200 job openings from 52 companies.

9. But Version 3 has gone beyond just helping rural India to reduce its pressure on land.
 Under the new version, ITC plans to address the sustainability angle of the Indian
agricultural sector by promoting the practice of green farming.
 "The company is now pushing farmers to adopt organic farming as well as reducing of
greenhouse gas emissions,
AWARDS TO ITC:E-CHOUPAL:
 The Development Gateway Award:2005
ITC is the first Indian company and the second in the world to win this prestigious
award.

10.  The 'Golden Peacock Global Award for Corporate Social Responsibility (CSR) in
Emerging Economies: 2005’.
 United Nations Industrial Development Organization (UNIDO)Award: 2008
 The Ashoka - Changemakers ‘Health For All’ Award :2006
 Innovation for India Award: 2006
 The Corporate Social Responsibility Award :2004 from The Energy and Resources
Institute(TERI)