E Chaupal (Pratik Negi)

Presentation

On

E- choupal ( Profitable Rural transformation)

BY-• Pratik K.S Negi• Tanmoy Nandi• Tejas Parathe• Chintan Sadiwala

What its all about

• Agriculture is vital to India

• produces 23% of GDP, feeds a billion people, and employs 66% of the Workforce

• Farmers still suffering

• Unfair agricultural system

• Mandi system

• ITC initiative

• Bring in the E-commerce technology to help the agriculture system

Farmer

Regulated Markets (Fair Market Price)

Private Miller

Commission Agent (hired by ITC)

Village Trader

Ghani

Producer Coop (Negotiated Price)

Cooperative Mill

E-Choupal

ITC

ITC

C

om

mis

sion

Business model

The system --1

• Less capital

• ITC make significant investments to create and maintain its own IT network in rural India

• Computer in farmers place, linked to the Internet via phone lines or, increasingly, by a VSAT connection

• US$3,000 and US$6,000 to set up and about US$100 per year to maintain the system

• Sanchalak ( incurring cost and serve the entire community)

• Price determination,ordering of agricultural needs

• ITC crop procurement directly. Higher price to crops

The system --2

more accurate weighing,

faster processing time, and prompt payment,

access to a wide range of information,

including accurate market price knowledge, and market trends

The total benefit to farmers includes

Lower prices for inputs and other goods, higher yields sense of empowerment

Commission fee reduction in mandis

ITC product innovation plus gains in logistics, marketing tactics

Farmer Benefits

Overall rural development

total yield profit and opening of alternate option

Multi Uses of Internet

The total benefit to farmers includes

Lower prices for inputs and other goods, higher yields sense of empowerment

Commission fee reduction in mandis

ITC product innovation plus gains in logistics, marketing tactics

Router

Comm. Tower

Server at a Telecentre

ModemHospital

High School

WiFi

Dial-up

Ethernet

Hub

Primary School

WiFi

FD

Fire Department

Internet

To ISP

USE of technology

Is it a Profitable Rural transformation

Issues 1. transport 2. electric Power 3.Information and Infrastructure 4. lacking in modern resources

Companies restraining to enter the rural market

? ISCan the modern methodology and technology be deployed in rural India profitably

Issues with agriculture in india

• Agriculture 23% of the GDP, feeds a billion people and employs 66% of the workforce

• Non-optimal farming practices and capricious weather patterns

• corrupt and inefficient systems

• unprofessional business environment made the sector unattractive to modern companies and blocked their influence in rationalizing the market

• Green revolution and by 1970 we became exporter for the agricultural yield

• still most Indian farmers are very poor as a result of land redistribution policies

• Thus a remedy was required for the revamp of the same.ANSWER WAS ---- ITC initiative E--CHOUPAL

ITC group is one of India’s foremost private sector companies

Presences inITC has a diversified presencetobacco hotels, paperboards, specialty papers, packaging, agri-business, branded apparel, packaged foods and other fast moving consumer goods

ITC's International Business Division (IBD) agri-trading company aiming to “offer the world the best of India's produce.”

Because

agricultural commodity trading business was small compared to international players

Started with the CSR and shareholder value creation with social development

The oil seed complex

VISION AND PLANNING

• Re- engineer not reconstruct• Address the whole, not just one part• IT- Driven solution

I. Delivery of real time informationII. Collaboration between parties

Risk assessment

BUSINESS MODEL

1. Selecting And Training of SanchalakMotivation qualities for their role

I. Help their communitiesII. Profitable Business for themselves

III. Getting Access to a functional computer

2. Co operating commission agent

E CHOUPAL SUPPLY CHAIN

Pricing

Inbound logistic

Inspection and grading

Weighing and payment

Hub logistics

ATTRIBUTE OF ITC

Maintains commercial volumes by sequencing procurement and sales year-round

SCALING THE MODEL

Crop specific intervention

Low-Cost Last Mile.

Intelligent First-Mile

CREDIT AND INSURANCE

Capturing Credit History Transaction and Administration Costs Non-cash loans for farm inputs Loans to sanchalaks. Sanchalak recommended loans Insurance and Risk Management

Services

PROCESS REGARDING ISSUES

Organization Architecture

TRAINING

SUPPORT

PLANNNG

PEOPLE

PROCESS

TECHNOLOGY REGARDING ISSUES

HARDWARE

Power

Solar battery

UPS

SOFTWARE

OS

Windows 98

Boon to villages include:

Children are using computers for schoolwork and games

Operation and agricultural strategy by (sanchalak’s)

World wide exposure to villager for agricultural benefit

Pro- youngsters (entertainment factor)

Flaws with the system

Commission agents – reduction in there share

Labour from mandis – lost jobs (but will be reemployed by ITC)

Farmers purcahses near mandis reduced

Mandi TAX – now paid to mandis nearest to procurement center thus resulting in loss

The efficiency pressures imposed by e-Choupal has spurred industry consolidation.

Challenges

o Radical shifts in computing access could fundamentally alter community-based models

o Number and power of the sanchalaks

o The scope of the e-Choupal operation

o Speed of expansion create real threats to execution management.

o Competitive environment ( need and demand and expectation increased)

o Access to the system

o Leveraging the poor and females with same rule book

Future Strategy

Thank you

Valuation and grading the output

Traceability in supply chain & food safety and quality control

multiple buyers and sellers execute a range of transactions (not ITC will be sole in charge)

rural marketing and distribution strategy with organization of people, processes, and partners

vision of eventually sourcing IT-enabled services from rural India

Telemedicine, eco-tourism, traditional medicine, and traditional crafts are some of the services that can be sourced from rural India