PRESENTATION

BUSINESS
ENVIRONMENT

By: Prabhat Kumar

 CSR

e -Choupal
VAS IN ICT IN
AGRICULTU RURAL
RE AREA
OPPORTUNITY
 72% of India lives in its villages
 After USA maximum area of arable land.
 Rich & Diverse Agro-climatic Zones
 60% of workforce related to Agriculture
 Agriculture accounts for 24% of GDP
 Therefore, Low Rural per capita incomes
 Large domestic consumption base
 Nearly 200 Million people live at the margin
 The State of Indian
Farming
 Small Landholdings
 Low literacy , Low Income
 Over dependence on Rain
 Weak Infrastructure : Physical , Social
 Underserved on supply side
 Monopoly channel on demand side
 Over dependence on intermediaries, lack of
information.
 Low productivity – Low risk taking ability – Low
share of consumer spend
 Low Risk Appetite

Low Margins Caught in a vicious Low Investment

cycle of
underdevelopment
Low Value Addition Low Productivity

Weak Market
Orientation
Value Chain-Conventional
system
Agri Input Retailer
Input
Cos
Stockist

Seed Kaccha
Fertilizers

Broker
Chemicals
Trader
Practices

Processor
Adat

Farmer
Pakka
Dept of Agri VLW

Govt
Univ.
Met Dep
MSP
Insurance
Practices
Adat
Weather

Money Lender
IDEA GENERATION
 The idea of creating and leveraging an
electronic market place came from the
brainstorming session done by senior
executives of ITC-IBD(international business
division)
 Unleash the power of the small-scale
entrepreneur
 Quality of agricultural produce
 BOP Market
 Unrestrained supply of grains for export
Project Goals
 Enhance farm productivity
 Disseminating latest information on district level weather
forecasts for short & medium terms
 Best practices in farming (generic as well as specific)
 Supply of quality inputs (seed, herbicide, fertilizer,
pesticides etc) in the village itself
 Improve price realization for farm produce
 Minimize transaction costs in marketing farm produce
 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
 Buying output at the farmers’ doorstep Through transparent pricing
& weight management practices
 Eliminate wasteful and parasitic intermediation
 The Business Model

The idea – To saturate a particular sector with e-choupals

where one choupal would serve 10 villages within a 5 km
radius.

The village e -choupal is housed in the Sanchalak/ Co-

ordinator’s house.

The sanchalak is central to the business model. Such a role

helps ITC by:
i. Providing trust among the farmers on behalf of the
community
ii. Removing the need of a physical infrastructure such as
the kiosk
iii. As a communication channel between the illiterate
farmers and ITC
 Kaccha

Agri Input Retailer

Input
Cos
Stockist
Seed
Fertilizers

Broker
Chemicals
Trader
Practices
Adat

Processor
Farmer Choupal
Dept of Agri VLW

Govt
Univ.
Met Dep
MSP Sanchalak
Insurance
Practices
Weather

Money Lender
 The Mandi Chain
Rs per MT

Trolley Freight to Mandi = 100

Filling & Weighing Labour = 70
Farmer Incurs
Labour Khadi Karai = 50 270
Handling Loss = 50

Commission to Agent = 100

Cost of Gunny Bags (net) = 75
Processor Labour (Stitching, Loading) = 35
505
Incurs Labour at Factory (Unload) = 35
Freight to Factory = 250
Transit Losses = 10

Total Chain 775 V V2

 The eChoupal Chain
Rs per MT

Trolley Freight to Mandi = 100

Filling & Weighing Labour = 70
Farmer Incurs
Labour Khadi Karai = 50 270
Handling Loss = 50

Sanchalak = 50
Commission to Agent = 100
Processor Cost of Gunny Bags (net) = 75
505
Incurs Labour (Stitching, Loading) = 35
Labour at Factory (Unload) = 35 185
Freight to Factory 135 = 250
Transit Losses = 10
775
Total Chain 185
Technology used in the E-
choupal
 Power constraints- Sporadic availability of power
(unreliable) and substandard quality of power
 UPS backup. Now solar battery chargers are used
 Telecom Infrastructure: Usually poor infrastructure. As
of now rural telecommunications infrastructure is designed
to carry voice traffic only. Transmission speed being slow-
restricts internet access
 Initial solutions to this constraint was to help C-DOT
improve their RNS kits to allow for increased transfer up
to 40 kbps from the earlier 12 kbps (Dial-Up connection)
 Dial-Up to V SAT
 Applications : The Web site www.soyachoupal.com

 Weather Typically 24- to 72-hour weather forecasts are

available along with an advisory. Weather data is
obtained from Indian Meteorological Department
 Pricing: The e-Choupal Web site displays both the ITC procurement rate and
the local mandi rates. ITC’s next day rates are published every evening. The
prices are displayed prominently on the top of the Web page on a scrolling
ticker.
 News For the soyachoupal Web site, relevant news is presented from various
sources. In addition to agriculture related news, this section also includes
entertainment, sports, and local news.
 Best practices: Best farming practices are documented by crop. Here again,
the information presented is action-based. For instance, this section not only
highlights what kind of fertilizers to use but also how and when to use them
 Q & A: This feature enables two-way communication. Here a farmer can post
any agriculture related question he needs answered.
Critical success factors
 Comprehensive knowledge of rural
markets
 Designing a Win-Win transaction model
 Leveraging the logistics channels
 Selection of Sanchalak
 Evolving an appropriate user interface
 Bottom-up model for entrepreneurship
 The ITC eChoupal Scale

 Farmers- 4 million
 States – 10 (Madhya Pradesh, Haryana, Uttarakhand,
Karnataka, Andhra Pradesh, Uttar Pradesh, Rajasthan,
Maharashtra, Kerela and Tamil Nadu)
 Villages- 40,000
 Kiosks- 6500
 Crops - soyabean, coffee, wheat, rice, pulses, shrimp.
Challenges
 Ban on purchase of wheat & rice
 Entry of competitors like TATA, M&M,
IIFCO
 Seasonal variations
 Shift of young people in villages near
cities from agriculture
 Rural FMCG Market
 Unorganized fruits & Vegetable market
New initiative
 Rural jobs and employability
I. Rozgarduniya.com
II. Skills training business
 Agri Services
I. Nokia life tools
II. Personalized agri services( 2 way
information flow by mobile technology)
New initiative
 Rural Market
I. Choupal saagar/ Haats

II. Forward interaction with horticulture

farmers

III. Export of processed food and fruits.

IV. Market for FMCG products.

In Conclusion

 Agriculture – a source of livelihood for

millions of small farmers

 Rural wealth creation in agriculture

through securing empowerment,
collaboration and competition

 ITC eChoupal - a transformational

initiative for sustainable development of
society