2. INDIAN TOBACCO COMPANY
Founded in 1910
Turnover - Rs 7.5 billion (US$162 million)
Market capitalization - US$4 billion
Annual revenues - US$2 billion
Its activities span tobacco and
cigarettes, paper and
packaging, paperboard, hotels and
tourism, information technology, and
agricultural exports.
For its agri-export division, ITC procures various
agricultural commodities such as
soybeans, coffee, and oil seeds.
4. CHALLENGES
Intermediaries – mandi
High procurement costs for ITC and in lost
profit opportunities for the farmers.
Long supply chain - very time-consuming
system, results in deterioration in the
quality of the products.
5. E-Choupal
June 2000
Investment – 40000 to 100000 rupees (1000 – 3000 $)
Cost Split
Training and commission to the Sanchalak
Largest internet based initiative - 1,300 choupals, linking 7,500
villages, and
serving almost 1 million farmers – MP, UP, AP, Karnataka
Info provided
crop prices
weather,
scientific farming practices
farmer peer groups
soil-testing services.
This online information is made available in Hindi.
How the system works? – Transportation cost reimbursed
6. Other Parties Involved
Meteorological departments
Fertilizer companies
Seed companies
Insurance companies
ITC, which exports US$140 million worth of
agricultural commodities, sourced US$15 million
worth of commodities from e-choupals in 2001. The
substantial quantity (120,000 metric tons of various
commodities) already procured through this
channel has resulted in overall savings of more
than US$1 million. These savings are shared
between ITC and the farmers. . Their savings have
been estimated at Rs 400 to Rs 500 (US$8 to US$10)
per ton of soybeans.
7.
8. Advantages
ITC’ssupply chain efficiency
Supply security
Farmers’ empowerment – lower
costs, better prices, less wastage
Brokers also taken into fold in the e-
choupal system
Effective in short term
9.
10. Challenges to E-Choupal
Training costs
Legal Issues -The Agricultural Produce
Marketing Committee Act (APMC Act), The
Essential Commodities Act,
Infrastructure
Content and regular updates
Unionization
Because of multiple variables that affect
productivity, a long-term assessment of the
system’s productivity and efficiency levels
needs to be undertaken
11. KEY TAKEAWAYS
Efficiency and transparency
Real time data – no time lag
Trusting and empowering your suppliers
Reduction in number of intermediaries – better profits
Mutual benefit to all
Information
Inclusion/participation
Accountability
Local organizational capability
12. REFERNCES
Figures Courtesy:
Support for this digital dividend “What works” case
study provided by: the microenterprise
development division of the United States Agency
for International Development (USAID), through the
seep network's practitioner learning program
