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The ITC E-Choupal Initiative

The document summarizes ITC's e-Choupal initiative, which aims to improve supply chain efficiency and provide better prices to farmers. Key changes include establishing farmer internet kiosks called e-Choupals, removing middlemen, providing price information directly to farmers, and organizing collection and payment at local procurement hubs. This has benefitted farmers through lower costs, higher prices for quality crops, and access to market information. It has benefitted ITC through more secure supply chains and procurement costs. The conclusion recommends ITC owning the kiosks to make the model more sustainable long-term.

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Raksha Shetty
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64 views

The ITC E-Choupal Initiative

The document summarizes ITC's e-Choupal initiative, which aims to improve supply chain efficiency and provide better prices to farmers. Key changes include establishing farmer internet kiosks called e-Choupals, removing middlemen, providing price information directly to farmers, and organizing collection and payment at local procurement hubs. This has benefitted farmers through lower costs, higher prices for quality crops, and access to market information. It has benefitted ITC through more secure supply chains and procurement costs. The conclusion recommends ITC owning the kiosks to make the model more sustainable long-term.

Uploaded by

Raksha Shetty
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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The ITC e-Choupal Initiative

ITC: An Overview
 Incorporated on August 24, 1910 under the name of
'Imperial Tobacco Company
 One of the 8 Indian Companies to feature in ‘Forbes A-
list’ for 2004
 Diversified conglomerate with interests ranging from
Tobacco to Hospitality
 Farm linkages in 14 states covering Soya, Wheat, Marine
products, Coffee etc.
1. Objectives of ITC’s e Choupal initiative
Make IBD globally competitive on par with the other
subdivisions
Develop a supply chain and improve its efficiency
Get better deal for ITC and farmers
Obtain better quality produce
Build trust and obtain long-term partnership with farmers.
Future objectives
Scalablity
Use of ITC hub for selling other products to the rural
community
Agro –Extention services( crop insurance, crop credit
Use e-Choupal website for advertising
2 ) Changes bought in the Supply Chain :

Existing Supply Chain


Changed Supply chain
Pricing

Previous day’s closing price used as benchmark price


for next day
Mandi prices communicated to sanchalak through e-
Choupal portal
Sanchalak inspects the sample, assesses quality and
gives farmer a conditional quote and a note
(name/village/quality tests/approx. quantity/conditional
price), if farmer decides to sell to ITC
Inbound Logistics

Farmer proceeds to the nearest ITC procurement hub


with the note
Some procurement hubs are ITC factories, others are
purely warehouse operations
ITC’s aim is to have a processing centre within 30-40 km
radius of its farmers
Inspection and Grading

At the ITC procurement hub, laboratory tests are


conducted on a sample of farmer’s produce
To change farmer’s attitude and appreciating produce
quality, ITC is developing lab tests to reward farmers
with reward points for better quality supply
Weighing and Payment

Farmer’s produce is weighed on electronic weighbridge


He is then given full cash payment
Freight expenses are reimbursed
Appropriate documentation at each stage and farmer is
given a copy of that
Samyojaks handle cash operations
Hub Logistics

Farmer transports his produce to the nearest processing


centre or storage hub
ITC incurs the transportation cost
The farmer bears the risk of transportation until produce
is delivered and the sale is completed
Technological support

Nodal platform catering to commodity blending,


agricultural trading, e-choupal &rural distribution
24,000 personalized business function points
110,000+ pre-built business function points
Integrated Business Systems for Direct Agriculture
Procurement, Rural Distribution, e-Choupal
Management, Exports, Insurance, Aqua Processing &
Commodity blending
Support for 8 local languages
Value to Stake-Holders
Farmer Community
 Access to information
– Empowered decisions
– Improved agriculture
 Economic benefits through lower transaction costs and
process efficiencies
 Served with dignity
 Knowledge bundled sale of goods and services
 Co-opted in product design
 Hope for a brighter future
ITC
 Lower procurement costs
 Direct interaction with farmers - Control on quality & supply
security
 Low cost distribution channel
 Access to market intelligence

• Commission Agents
 Gain access to global markets through ITC and commission to
compensate some of the loss revenue
3. Conclusion
To make this model more sustainable ITC should own
the kiosks and appoint sanchalaks as manager to
monitor the activities . This will help ITC to overcome
the future threats of inefficient services due to
personal problems of kiosks owner and will have
ownership rights on the kiosks.

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