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E-Choupal

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e-Choupal is an initiative of ITC Limited, a large multi business conglomerate in India, to link
directly with rural farmers via the Internet for procurement of agricultural and aquaculture
products like soybeans, wheat, coffee, and prawns. e-Choupal 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. The programme
involves the installation of computers with Internet access in rural areas of India to offer farmers
up-to-date marketing and agricultural information.

[edit] Problems addressed


Traditionally, 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. The difference in price between good quality and inferior quality was
little, and therefore there was no incentive for the farmers to invest and produce good quality
output. With e-Choupal, the farmers have a choice and the exploitative power of the middleman
is neutralised.

[edit] Effects of e-Choupal


ITC Limited has now provided 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. This online access enables farmers to obtain information on mandi
prices, and good farming practices, and to place orders for agricultural inputs like seeds and
fertilizers. This helps farmers improve the quality of their products, and helps in obtaining a
better price. Each ITC Limited kiosk having Internet access is run by a sanchalak — a trained
farmer. The computer is housed in the sanchalak's house and is linked to the Internet via phone
lines or by a VSAT connection. Each installation 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 a service fee for the e-transactions done through his e-Choupal. The warehouse
hub is managed by the same traditional middle-men, now called samyojaks, but with no
exploitative power due to the reorganisation. Indeed these middlemen make up for the lack of
infrastructure and fulfill critical jobs like cash disbursement, quantity aggregation and
transportantion.

Since the introduction of e-Choupal services, farmers have seen a rise in their income levels
because of a 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 farmers do not pay for the information and knowledge
they get from e-Choupals; the principle is to inform, empower and compete. At the same time
ITC Limited has obtained benefits from the programme:

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]

There are presently 6,500 e-Choupals in operation. ITC Limited plans to scale up to 20,000 e-
Choupals by 2012 covering 100,000 villages in 15 states, servicing 15 million farmers.[citation needed]

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