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e-Choupal version 3.0 - Business Today - Business News

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e-Choupal version 3.0

E. Kumar Sharma Edition: November 1, 2009

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When you run Corporate India's largest, most ambitious and most celebrated rural initiative, you better know the following: 1) That adversities could crop up unexpectedly. 2) That some adversities can be turned into opportunities. 3) And that every little opportunity has to be made most of. It was so with ITC, the company behind the e-Choupal initiative that had reached four million farmers in six states in six years till 2006. At one point, the company was opening 5-6 e-Choupals a day and had a target of reaching 100 million farmers. That hit a roadblock of sorts in 2006-07. The very basis of the e-Choupal's core business-commodity sourcing from farmers directly-was endangered with the government clamping down on companies trading with farmers directly. The trigger for the government reaction was the spike in wholesale price inflation, which rose close to double-digit figures in case of some commodities in 2006-07. Though the impact varied from state to state, the larger foreboding was loud and clear: The acts of government taken in the national interest could hobble e-Choupal's anchor business, even if temporarily. What does the company do then? Roll out plans for Version 3 of e-Choupal that will add at least two more anchor businesses to start with and deepen the engagement with individual farmers way beyond what was being done in Version 1 and 2. "The idea is to discover new anchor businesses and try and insulate the e-Choupal model from the risks of reversal in government's agri reforms," says S. Sivakumar, Chief Executive, Agri-Business, ITC, and the man who scripted the e-Choupal model of business. Technologically, it would mean adding mobile phones to the existing channels of Net-based computers and Choupal
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1, 2, 3 of e-Choupal Version 1.0 The Start IDEA: To give power of scale to small farmers by aggregating them as sellers (of produce) and as buyers (of farm inputs) FARMERS' GAIN: They get bargain and choice - the two key virtues of competition ITC'S GAIN: Access to inputs for its agri business; offer the use of network to other companies Version 2.0 The Scale-up REACH: By 2006, 40,000 villages covering 4 million farmers OFFERING: Network now offered five services: Information: weather, price, etc. Knowledge: farming methods, soil testing, etc. Purchase: Seed, fertiliser...to insurance Sales: Farmers sell crops to ITC centres Other: Cattle care, water harvesting, women employment etc

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e-Choupal version 3.0 - Business Today - Business News

harvesting, women employment etc Saagars, the one-stop shops catering to all the needs of the rural community. As the company scoped around for new opportunities, it found many-some emerging from the adversities that have got it rethinking. These opportunities not only make transition to Version 3 possible, but also help modify the existing strengths of Version 1 & 2 (see box above). It's spotting of these opportunities and turning them into current and future businesses that has become a case study in persevering with rural India. Opportunity:Farmers willing to invest more Response: Offer them services they really need, and are willing to pay for Though the average farm productivity is still low in India, the last 10 years have seen an unprecedented rise in farmers' income. This has been driven by a record increase in the price of agricultural produce (government's minimum support prices for food grains alone have risen by 30-90 per cent in two years) and a good run with monsoons-this year's deficiency notwithstanding.
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Version 3.0 The Deepening NEW BUSINESSES: Add two new anchor businesses: 1) Rural jobs and employability and 2) Personalised agri services. Plus strengthen existing commodity sourcing MORE INTERACTION: Through Choupal Saagars and Haats and via mobile phones NEW TECHNOLOGY: Use of especially enabled mobile phones, in addition to PCs, for two-way interaction with farmers; use of analytics; new partners

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Surplus with liquidity, SBI may lower rates businesstoday.intoday.in State Bank of India (SBI), the country's largest bank by assets, may lower its lending rates on consumer loans later in the month."I am not ruling it out. It could happen in the next two or three weeks,"

A very nice overall view a new era of grand backward/forward integration presented in this article.A whole new dimension of an unprecendented and truely motivated movement to bring true value to Indian rural Supply chain. Not only ITC's version 3 will bring prosperity at the bottom of pyramid but also might act as check on the double digit inflation. What might be lagging in this article may be go green initiatives.
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