e-choupal in India
The current agri-business operating environment in India follows the Agriculture Produce Marketing Committee (APMC) Act of 1960. This act designates that agri-companies can only buy agricultural produce from assigned markets and privately from registered commission agents. This was the only channel available between the farmers and processors in India. Other constraints that affect e-Choupal are rural isolation, lack of physical infrastructure, death of qualified human capital, access to telecommunications, power supply, low literacy rates, providing the digital infrastructure to accommodate increasing service offerings, and building the capacity of the human infrastructure. ITC was able to overcome the APMC Act by convincing political and bureaucratic leaders that the Act would be better served by e-Choupals to benefit the farmers. To overcome the rest of the challenges, ITC built a hub-and-spoke system of e-Choupal internet kiosks (built in villages) and processing centres (the market for farmers and each served 40 choupals) to create a direct channel between itself and the farmers. ITC developed their own infrastructure to provide internet access and bought VSAT equipment, power backup units, and telephone connections. To accommodate increasing service offerings ITC provided digital media in local languages, standardized web-forms, and provided increased accessibility. Digital content and virtual training sessions provided on the e-Choupal network helped literacy, healthcare services and credit facilities through e-Choupal helped reduce the death of qualified human capital, and training kiosk managers so they are well versed in the services offered by ITC helps build the capacity of the human infrastructure.
The goals that ITC is trying to accomplish are to mitigate the constraints of the agrarian supply chain, reduce poverty, reduce rural isolation, promote education, promote gender equality, promote economic growth, and improve the health of citizens. The Top Ranked Objective for ITC would be improving the quality of life in rural India because it is a combination of all the goals that ITC is trying to accomplish. This TRO also helps ITC in its “Citizen First” mission where country must come before corporation. A major strength of ITC is its e-Choupal network. E-Choupal helps accomplish all the goals of ITC from mitigating the constraints of the agrarian supply chain to promoting education to improving the health of citizens. E-Choupal is also a small weakness that creates more competition in the agriculture industry and displaces the trader commune in India. The political and bureaucratic leaders that allowed e-Choupal to overcome the barriers of the APMC Act are an opportunity that helps achieve the objectives. The willingness that the people have to take advantage of the services provided by the e-Choupal network is an outside factor that helps achieve the objectives. Threats that will hinder the achievement of the objectives are the government, traders lobbying against e-Choupal, rural isolation in general, and the capacity of kiosk managers. ITC’s e-Choupal network has given them a competitive edge over any other incumbent marketplaces. E-Choupal establishes a direct channel between the farmer and ITC, takes out the middlemen (commission agents) along with several inefficiencies, helps get farmers more money for their produce in less time, helped farmers adopt modern agricultural practices by offering incentives, safeguards farmers’ interests by rewarding them for their product quality, provided info and knowledge of the price of the produce, provided weather forecasts, and latest technological trends in farming. Outside of the agri-business aspect, e-Choupals also provided some social benefits. They promoted education with digital content and virtual training sessions for children to improve their scholastic ability. They promoted gender equality by providing information for the economic empowerment of women. They promoted healthcare by providing inexpensive and accessible quality health services. Choupal processing centres added retail outfits so villagers could shop at their hypermarket. ITC also used the e-Choupal network to disperse credit facilities and insurance policies.
The Agriculture Produce Marketing Committee (APMC) Act of 1960 is the current agri-business operating environment in India. This act designates the only channel available between the farmers and processors in India. Along with rural isolation in general, the Act is a major constraint that affects e-Choupal. To overcome the challenges, ITC built a hub-and-spoke system of e-Choupal internet kiosks and processing centers to create a direct channel between itself and the farmers, taking out the middlemen along with several inefficiencies. The Top Ranked Objective for ITC would be improving the quality of life in rural India because it is a combination of all the goals that ITC is trying to accomplish. E-Choupal provides agri-business services, educational services, gender equality services, medical services, retail services, credit services, and insurance services. It is possible to achieve the goals given the strengths, weaknesses, opportunities, and threats of ITC and its e-Choupal network.
References
http://compassioninpolitics.wordpress.com/2009/01/31/e-choupal-case-study-from-india-information-technology-and-social-enterprise/