E choupal

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ITC E-choupal case

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E choupal

  1. 1. ITC E-ChoupalGroup 2
  2. 2. INDIAN TOBACCO COMPANY Founded in 1910 Turnover - Rs 7.5 billion (US$162 million) Market capitalization - US$4 billion Annual revenues - US$2 billion Its activities span tobacco and cigarettes, paper and packaging, paperboard, hotels and tourism, information technology, and agricultural exports. For its agri-export division, ITC procures various agricultural commodities such as soybeans, coffee, and oil seeds.
  3. 3. Farmer Supply Chain LengthKacha Adat Illiterate Farmer Pakka Adat LiterateTrader @ Mandi Farmer - Computer Sales Broker ITC ITC
  4. 4. CHALLENGES  Intermediaries – mandi  High procurement costs for ITC and in lost profit opportunities for the farmers.  Long supply chain - very time-consuming system, results in deterioration in the quality of the products.
  5. 5. E-Choupal June 2000 Investment – 40000 to 100000 rupees (1000 – 3000 $) Cost Split Training and commission to the Sanchalak Largest internet based initiative - 1,300 choupals, linking 7,500 villages, and serving almost 1 million farmers – MP, UP, AP, Karnataka Info provided crop prices weather, scientific farming practices farmer peer groups soil-testing services. This online information is made available in Hindi. How the system works? – Transportation cost reimbursed
  6. 6. Other Parties Involved  Meteorological departments  Fertilizer companies  Seed companies  Insurance companies  ITC, which exports US$140 million worth of agricultural commodities, sourced US$15 million worth of commodities from e-choupals in 2001. The substantial quantity (120,000 metric tons of various commodities) already procured through this channel has resulted in overall savings of more than US$1 million. These savings are shared between ITC and the farmers. . Their savings have been estimated at Rs 400 to Rs 500 (US$8 to US$10) per ton of soybeans.
  7. 7. Advantages ITC’ssupply chain efficiency Supply security Farmers’ empowerment – lower costs, better prices, less wastage Brokers also taken into fold in the e- choupal system Effective in short term
  8. 8. Challenges to E-Choupal  Training costs  Legal Issues -The Agricultural Produce Marketing Committee Act (APMC Act), The Essential Commodities Act,  Infrastructure  Content and regular updates  Unionization  Because of multiple variables that affect productivity, a long-term assessment of the system’s productivity and efficiency levels needs to be undertaken
  9. 9. KEY TAKEAWAYS  Efficiency and transparency  Real time data – no time lag  Trusting and empowering your suppliers  Reduction in number of intermediaries – better profits  Mutual benefit to all  Information  Inclusion/participation  Accountability  Local organizational capability
  10. 10. REFERNCESFigures Courtesy:Support for this digital dividend “What works” casestudy provided by: the microenterprisedevelopment division of the United States Agencyfor International Development (USAID), through theseep networks practitioner learning program

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