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

Business model

Village Trader E-Choupal

Farme r

Ghani

Regulated Markets (Fair Market Price)

Producer Coop (Negotiated Price)

Commission Agent (hired by ITC)

ITC Commission

Cooperative Mill

Private Miller ITC

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

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

IS Can 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 Indias foremost private sector companies

Presences in ITC has a diversified presence tobacco 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 information II. Collaboration between parties Risk assessment

BUSINESS MODEL

Selecting And Training of Sanchalak Motivation qualities for their role I. Help their communities II. Profitable Business for themselves III. Getting Access to a functional computer 2. Co operating commission agent
1.

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 yearround

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 Information Architecture Application Architecture

Technical Architecture

TRAINING DATA GATHERED AND MANAGEED SUPPORT

APPLICATIO N

SERVERS

GOALS

CLIENTS

PLANNNG

RESOURCE OCCUPIED PERFORMA NCE MATRIX

NETWORK

PEOPLE

SYSTEM SOFTWARE

PROCESS

TECHNOLOGY REGARDING ISSUES HARDWARE

Computer hardware
Intel Celeron processor

Power
Solar battery

Connectivity
Dial up connection

UPS

V-SAT

printers

SOFTWARE

OS
Windows 98

Word processor
Ankur

Other
Sunera kal

Video clips

Boon to villages include: Children are using computers for schoolwork and games Operation and agricultural strategy by (sanchalaks) 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 lo The efficiency pressures imposed by e-Choupal has spurred industry consolidation.

Challenges

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

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

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