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ITC E-Choupal

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'e-Choupal' also unshackles the potential ofIndian farmer who has been trapped in avicious cycle of low risk taking ability >

low investment > low productivity > weakmarket orientation > low value addition >low margin > low risk taking ability. Thismade him and Indian agribusiness sectorglobally uncompetitive, despite rich &abundant natural resources.Such a market-led business model canenhance the competitiveness of Indianagriculture and trigger a virtuous cycle ofhigher productivity, higher incomes,enlarged capacity for farmer riskmanagement, larger investments andhigher quality and productivity.Further, a growth in rural incomes willalso unleash the latent demand forindustrial goods so necessary for thecontinued growth of the Indian economy.This will create another virtuous cyclepropelling the economy into a higher

growth trajectory.

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The Model in Action: Appreciating the imperative of intermediaries in the Indian context, 'e-Choupal' leverages

Information Technology to virtually cluster all the value chain participants, delivering the samebenefits as vertical integration does in mature agricultural economies like the USA.

'e-Choupal' makes use of the physical transmission capabilities of current intermediaries -aggregation, logistics, counter-party risk and bridge financing -while disintermediating themfrom the chain of information flow and market signals.

With a judicious blend of click & mortar capabilities, village internet kiosks managed by farmers -called sanchalaks - themselves, enable the agricultural community access ready information intheir local language on the weather & market prices, disseminate knowledge on scientific farmpractices & risk management, facilitate the sale of farm inputs (now with embedded knowledge)and purchase farm produce from the farmers' doorsteps (decision making is now information-based).

Real-time information and customised knowledge provided by 'e-Choupal' enhance the ability offarmers to take decisions and align their farm output with market demand and secure quality &

productivity. The aggregation of the demand for farm inputs from individual farmers gives themaccess to high quality inputs from established and reputed manufacturers at fair prices. As adirect marketing channel, virtually linked to the 'mandi' system for price discovery, 'e-Choupal'eliminates wasteful intermediation and multiple handling. Thereby it significantly reducestransaction costs.

'e-Choupal' ensures world-class quality in delivering all these goods & services through severalproduct / service specific partnerships with the leaders in the respective fields, in addition toITC's own expertise.

While the farmers benefit through enhanced farm productivity and higher farm gate prices, ITC

benefits from the lower net cost of procurement (despite offering better prices to the farmer)having eliminated costs in the supply chain that do not add value.

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Middlemen

Uneducated farmers

Write some others also

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There are presently 6,500 e-Choupals inoperation. ITC Limited plans to scale up to20,000 e-Choupals by 2012 covering 100,000

villages in 15 states, servicing 15 millionfarmers.

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elimination of non value added activities

differentiated product through identitypreserved supply chains

value added products traceable to farmpractices

e-market place for spot transactions and

support services to futures exchange

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