E chaupal

E chaupal concept and micenism

1. “ e- Choupal : Present by : SONDARVA YAGNESH M M.Sc. Agriculture ( Agril .Extension) Department of agricultural extension BACA, AAU ,ANAND

2. In India, there are 6,40,000 villages. Among the villages, Agriculture is main source of occupation. Despite the villagers produce huge amount of production, the market mechanism is unviable. The infrastructures in rural India-physical, social and institutional are not up to the level. Further Government intervention like trained Agricultural Extension Workers in each village to disseminate best farming practices, and open auction system for better discovery of farm produce were of great help in this back drop. But there institutions were more appropriate for the supply driven value chains in an era of food shortages, and are not able to facilitate a smooth transition to the demand driven value chains required to compete in the new globalizing economy. And the small farmer continues to live poverty. It is in this context e-Choupal creatively level ages information technology to set up a meta-market in favour of India’s small and poor farmers.

3. e- Choupal e- Choupal is an initiative of ITC Limited , a 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 tackles the challenges posed by Indian agriculture , characterized by fragmented farms, weak infrastructure and the involvement of intermediaries. The programme installs computers with Internet access in rural areas of India to offer farmers up-to-date marketing and agricultural information.

4. e- Choupals were started in 2000 from ITC's determination to capture more of the soybean crop, which it processes into oil (to sell in India) and into soy meal for export. ITC just started with just six e- Choupals in June 2000. e- Choupal can differ the chance to the poor farming to promote this sales at competitive price. In this context the present study concentrate e-Choupal and the development of a rural market using a set of information communication technology. e-Choupal delivers real-time information and customized knowledge to improve the farmer’s decision-making ability, thereby better aligning farm output to market demands; securing better quality, productivity and improved price discovery. The model helps in the process facilitating access to higher quality farm inputs at lower costs for the farmer. The e-Choupal initiative also creates a direct marketing channel, eliminating wasteful intermediation and multiple handling, thus reducing transaction costs and making logistics efficient. The e-Choupal project is already benefiting over 3.5 million farmers. The purpose of e-Choupal implementing is net working the village via internet & procuring agriculture product from farmer for export.  

5. Concept of e -Choupal

6. e- Choupal is a Hindi word which means “village meeting place”. Market is a meeting place where vendors and customers come together to do transactions. e- Choupal is a virtual market place where farmers can transact directly with a processor and can realize better price for their produce. e- Choupal has the advantages of the market but spans very large varieties of vendors and customers. Geographical distances do not restrict participation in the e- Choupal .

7. e-Choupal Now Next 5 Years States covered 9 15 Villages covered 40,000 1,00,000 No. of e-Choupals 6,000 20,000 Farmers empowered 3.5 million 10 million Scale- Geography & Size (Madhya Pradesh, Uttaranchal, Haryana, Karnataka, Maharashtra, Andhra Pradesh, Utter Pradesh, Rajasthan, Kerala) (Anonymous 2008)

8. There are 6,500 e- Choupals in operation in 40,000 villages in 10 states, affecting around 4 million farmers . ITC plans to scale up to 20,000 e- Choupals by 2012 covering 100,000 villages in 15 states, servicing 15 million farmers.

9. Scale Today

10. State Choupals Hubs Madhya Pradesh 1950 43 Uttar Pradesh 1850 42 Maharashtra 1200 22 Rajasthan 500 15 Karnataka 100 2 Andhra Pradesh 150 3 Karnataka 100 2 Kerala 50 1 Haryana 100 2 Choupals 6,000 132 Villages 40,000 Farmers 35,00,000 (Anonymous 2008)

11. e-Choupal Portals Name of Website Target Audience Language Operating State www.echoupal.com Wheat, rice, and pulses farmers Hindi Madhya Pradesh, Uttar Pradesh and Rajasthan www.aquachoupal.com Shrimp farmers Telegu Andhra Pradesh www.soyachoupal.com Soybean farmers Hindi, Marathi Madhya Pradesh, Uttar Pradesh, Rajasthan and Maharashtra www.plantersnet.com Coffee and other planters English and Kannada Karnataka

12. Objectives

13. Enhance farm productivity by bundling together & disseminating: The latest information on district level weather forecasts for short & medium terms. Good practices in farming (general as well as specific). Quality inputs (seed, herbicide, fertilizer, pesticides etc) in the village itself. Improve price realization for farm produce by making available: Live data on markets such as Location and Buyer-specific prices offered. International market prices of relevant agri-commodities. Historical & Up-to-date information on supply & demand. Expert opinions on expected future price movements. Minimize transaction costs in marketing farm produce by: More efficient Supply Chain & eliminating non-value adding activities Transparent pricing & weight management practices.

14. PEOPLE & ORGANIZATIONS

15. These are Lead farmers “identified from within each village and trained to act as intermediaries between the communities and ITC. Registered Sanchalaks have full access to the e-Choupal portal. Sanchalaks are usually of median wealth and status in their communities, able to read and write, and they can find time to service the e-Choupal. Sanchalaks undergo training on basic computer usage, the functions of the e-Choupal Web site, basic business skills , as well as quality inspection of crops, at the ITC plant nearest their village . A great deal of this training is also centered on getting the sanchalaks comfortable with the equipment. Sanchalak

16. Co-operating commission agents. The samyojaks handle ITC‘s local commissions and act as middlemen between ITC and the sanchalaks , managing warehouse hubs, that each cover 40 e-Choupals . Samyojaks play an especially important role in facilitating the cargo procurement process and also give some inputs into village and Sanchalak selection when a new e-Choupal is set up. Samyojak

17. Each e-Choupal costs between Rs 1,50,000 to 3,00,000 to set up and about 5,000 Rs per year to maintain . Costs Source: www. echoupal.com

18. ICT Kiosk with Internet Access Warehousing Hub/Store In the house of one trained farmer- the Sanchalak Within walking distance of target farmers Managed by the subsequent middleman- the Samyojak Within tractorable distance of target farmers The e-Choupal Infrastructure

19. Benefits of e -Chaupal

20. Benefits of e-Choupal to farmers : Enhancing farm productivity through bundling knowledge with deliveries of farm inputs . Increasing farm gate price realization through bundling information with cropping & output marketing decisions and through unbundling produce delivery, cash flow and pricing .

21. Benefits of e-Choupal to ITC: Cutting down the net cost of procurement, despite offering better prices to the farmers by eliminating non-value-adding costs in the value chain. Creating new business opportunities Offering identity preserved & traceable products to customers.

22. System Specification The IT infrastructure can be comprehensively understood in the three layers outlined in table: Organization Architecture Training and support Application Architecture Applications , goals and resources Technical Architecture Servers, Network and System Software

23. Technical Architecture

24. Technical Equipment Hardware Power Solar battery charger and UPS Connectivity Dial-up : Dial-up modem VSAT: VSAT modem and antennae Computer Hardware PC and printer Software Operating System Windows 98 Word processor Ankur (Hindi word processor)

25. Power Connectivity

26. Application Architecture

27. Features of the e-Choupal web site

28. Pricing The e-Choupal Web site displays both the ITC procurement rate and the local mandi rates. News From the e-Choupal Web site, relevant news is presented from various sources. Best Practices Best farming practices are documented by crop. Here again, the information presented is action-based. Q & A This feature enables two-way communication. Here a farmer can post any agriculture related question he needs answered. Feature Description and Operational Goals Weather Users can select their district of interest by clicking on the appropriate region of a map. Typically 24 to 72 hour weather forecasts are available along with an advisory.

29. News Dainik jagran, Web Dunia Market Prices Sanchalak followed other market prices. He used this information and helped other farmers decide when to sell. Entertainment Rent CDs to watch movies on the computer, Music downloads from the Internet Sports Cricket related news Education Students use the Internet to check their exam results and grades online Communication E-mail, the sanchalaks have e-mail accounts on Yahoo Chat Some sanchalaks use chat rooms to chat with other sanchalaks and ITC managers General interests / Other Information about cell phones Other features of the e-Choupal

30. Organization Architecture

31. Training the sanchalaks to use a computer effectively is deemed vital to the success of e-Choupal. The majority of this training is centered around getting the sanchalaks comfortable with the equipment. Training is fundamental, basic equipment training, word processing, web browsing and important of the devices as UPS and battery back up. Training

32. System Support ITC has about 15 engineers who provide field infrastructure support to the e- Choupals . They average about one or two calls a day. Each e-Choupal is visited about twice a month for infrastructure support. The support cost is estimated at Rs. 300 per visit. Source: www. echoupal.com

33. Farmer Trader P R O C E S S O R B R O K E R Dept. of Agri . VLW Govt . univ Met . dept . MSP insurance Practices weather input cos. Seed Fertilizer practices S T O K I S T Input retailer Kaccha Adat (unregistered dealer) Money lender Pakka Adat Conventional value chain

34. E-chaupal (Sanchalak) Farmer Interm ediaries P R O C E S S O R Dept. Of Agri. VLW Govt . Univ Met . Dept MSP. insurance Practices weather Input cos. Seed Fertilizer practices S T O C K I S T Input retailer e -Chaupal business model

35. Transaction Costs in Mandi Chain Soybeans Example Farmer Incurs Trolley Freight to Mandi = 120 Labour = 50 Kacchha Adat = 150 Handling Loss = 50 Rs per MT 370 Processor Incurs Commission to Agent = 100 Cost of Gunny Bags (net) = 75 Freight to Factory = 120 Handling at Mandi = 40 335 Total Chain 705

36. Transaction costs in e-Choupal chain Soybeans Example Farmer Incurs Trolley Freight to ITC Hub = 120 Labour = 50 Kacchha Adat = 150 Handling Loss = 50 Rs per MT 370 Processor Incurs Commission to Sanchalak = 100 Cost of Gunny Bags (net) = 75 Freight to Factory = 120 Storage & Handling at Hub = 40 335 Total Chain 705 120 50 Cash Disbursement Costs = 50 240 360 Source: www. echoupal.com

37. Inspection & Grading e-Choupal Supply Chain Pricing Weighing & Payment Hub Logistics

38. Business Principles of e-Choupal All information and knowledge is available free of cost through e-Choupal This makes it easy for the customer (farmer) to be an active participant The farmer is not obligated to transact with e-Choupal The farmer will transact only if he sees value (good price, correct weighment , full payment ) Sanchalak make money only if there is a transaction If the farmer does not see value, Sanchalak pushes e-Choupal to improve .

39. Who Pays for the Services? Not the farmer Information & Knowledge are free of cost Transactions only if the farmer chooses at free will Not subsidized ITC shareholder looks for a competitive return, like all shareholders do No Government money involved

40. ITC has continued to build new infrastructure by supplementing the farmgate presence of e-Choupal with new physical infrastructure rural marketing hubs called Choupal Sagar. Choupal Sagars positioned within tractorable distance of 30 e-Choupal centers and their user communities. The first rural mall (choupal sagar ), was inaugurated in August 2004 at Sehore M.P..

41. An Integrated Complex With… Grain Warehouse Weigh Bridge Dispensary Parking Fuel Station Training Centre Food Court Hypermarket Future Expansion (Cold Storage / Silos) Total Land Area: Five Acres

42. First rural mall in Sihor, Madhya Pradesh

43. Success Factors of e-Choupal Some of the elements that helped the e-choupal to work successfully are discussed below: Comprehensive knowledge of rural markets Designing a Win-Win transaction model Selection of Sanchalak Evolving an appropriate user interface Bottom-up model for entrepreneurship

44. Before ITC introduced us to e-Choupal, we were restricted to selling our produce in the local mandi. We had to go through middlemen and prices were low. ITC trained me to manage the Internet kiosk and I became the e-Choupal Sanchalak in my village. Today we are a community of e-farmers with access to daily prices of a variety of crops in India and abroad this helps us to get the best price. We can also find out about many other important things weather forecasts, the latest farming techniques, crop insurance, etc. e-Choupal has not only changed the quality of our lives, but our entire outlook. Soya Farmer & e-Choupal Sanchalak Dahod Village, Raisen District , Madhya Pradesh. ABHISHEK JAIN

45. Happy Farmer with Better Quality Produce Land: 12 acre Tomato Yields: Increased from 10-15 ton/acre to 25-30 tons/acre Saved 40 percent on fertilizer and pesticide costs Saved 10 % on commissions, etc. paid to mandi traders through direct selling to ITC Bhupal Reddy (ITC lead ,Hyderabad)

46. CONCLUSION

47. e-Choupal is an excellent agricultural product selling mechanism. This can provide marketing facilities to the farmers of surrounding area. However the problems encountered while setting up and managing these ‘e-Choupal’ are primarily of infrastructural inadequacies, including power supply, telecom connectivity and bandwidth, apart from the challenge of imparting skill to the first time internet users in remote and inaccessible areas of rural India. The enthusiastic response from farmers has encouraged ITC to plan for extension of the e-Choupal initiative. e-Choupal is a suitable market accessory that spurs economic activity and raises incomes of millions of household farmers leading to very large scale development. On the same path Government can extend the efforts to establish the marketing facilities through APMC to the farmers for getting more return from their Produces.

48. e-Choupal model using government and private corporation should be brought under single umbrella. Separate e-Choupal wing may be started by ministry of agriculture. e-Choupal rural marketing model should accommodate all agricultural commodities for selling in the market. Government may offer training programs to the farmers to access the e-Choupal information technology. Government should monitor the corporations and may provide infrastructure facilities such as power supply, telecom connectivity to computers etc. to the corporations. Government should introduce this kind of unique models with the corporations exclusively for poor farmer. e-Choupal system should be extended nook and corners of the Indian village.

49. THANK YOU