The Need: around 60-70% of India's working population is involved in agriculture, but many farmers are trapped in a cycle of poverty because they do not have the necessary support to make a decent living.
The Solution: an accessible online platform that shifts power from middlemen to the farmers through access to up to date information on market trends and technology.
What makes it even smarter? Access points are located in physical stores allowing agricultural inputs and technology to be traded. Includes an advisory and knowledge exchange function to help farmer's manage risks.
The Result: win-win: higher profits for farmers; lower procurement and targeted sales for ITC
With businesses in the fast moving consumer goods, agribusiness, packaging, and hotels sectors, Indian conglomerate ITC has a good understanding of the nation’s agriculture system. The group has identified that agricultural production in India faces a number of challenges, including “fragmented farms, weak infrastructure and the involvement of numerous intermediaries”.
As a result, despite abundant natural resources, Indian farmers are often trapped in a cycle of low risk taking ability, low investment and low margins, impacting individual prosperity and the performance of the sector more widely.
Helping farmers make better decisions
To address this, ITC launched e-Choupal, an accessible online platform that empowers farmers through access to information. The programme seeks to increase their economic and competitive capacity and support wider agricultural communities.
ITC refer to e-Choupal as a ‘click & mortar’ service, as the network is accessed at internet kiosks that also double up as physical stores. These locations are coordinated by a sanchalak, a farmer who is trained to use ITC’s agricultural website.
Upon accessing e-Choupal, Indian farmers have an unprecedented volume and range of resources at their fingertips. For example, up-to-date market information, including demand data, which can help address the mismatch of supply and demand that often forces farmers to discard parts of their produce.
Pricing information positions farmers to exploit trends and time their sales to get the best price. By building farmers’ understanding of the market, e-Choupal reduces the need for the intermediaries who traditionally control the trading process. E-Choupal also includes weather forecasting, and a knowledge exchange feature which enables farmers to share advice on managing risks like soil contamination or salinity. Trading is supported with farm inputs and outputs available to purchase.
- Set up in 2000 by Kolkata (West Bengal) based conglomerate ITC
- Provides computers and internet access in agricultural regions so farmers can obtain technical and market information
- Recipient of numerous honors including UNIDO and Stockholm Challenge Award
- Currently 6500 e-Choupal kiosks in 40, 000 villages affecting four million farmers
- Since the introduction of e-Choupal, farmer income levels and yields have increased; and transaction costs have fallen.
Increased profits all round
Farmers are already reporting the benefits from using e-Choupal. Data on acreage and yield between 2000 - 2012, shows that profits of farmers accessing the e-Choupal platform almost tripled. Soya farmers learned how to apply scientific farming practices to reduce seed use from 40-45 kg per acre to 30-35. In 2015, four million farmers used the service via 6,500 e-Choupal access points spread over 40,000 villages in 11 states. There are direct advantages for ITC too. By eliminating superfluous steps in the supply chain, the company lower its net procurement costs, despite offering better prices to farmers.
Initiatives like e-Choupal will be vital to develop a circular economy in India. The Ellen MacArthur Foundation’s 2016 report estimated that applying circular economy principles to the Indian food system could create annual benefits of ₹3.9 lakh crore (USD 61 billion) in 2050; reduce emissions, water usage, and environmental degradation; and play a vital role in securing the long-term food supply. The study specifically highlights ‘digitally enabled asset- and knowledge-sharing solutions’ and ‘digitised food supply chains’ as two opportunities to increase circularity in the Indian food system. These are areas in which e-Choupal is already having a significant impact.
The circular economy gives purpose to the digital transformation. By using the internet to put sophisticated data in the hands of farmers, ITC helps small and medium size businesses increase profits through better decision-making to optimise the use and distribution of time and resources.
For longform case study: HBR review