Itc Echoupal Initiative
The ITC eChoupal Initiative
Wednesday, January 23, 2013
Background: Soybeans and their derivatives constituted two-thirds of ITC’s agricultural business. ITC had an integrated presence throughout the entire value chain, from procurement to export. Farmers had traditionally relied on choupals, an informal assembly, as their only source of agricultural knowledge and sold soybeans at the closest market, or mandi, to traders employed by ITC. Despite success of soybean products in domestic and international market, ITC’s input and output sides of the agricultural supply chain in India were still far from efficient mainly due to fragmented farms, weak infrastructure and the involvement of numerous intermediaries.
Key Issues and Important Perspectives: Farmers and processors were both in an unproductive cycle. Farmers did not have access to key inputs such as quality seed or herbicides and were losing over 60% of their crops potential value. Then middlemen clogged the supply chain and were often unfair with their payment to farmers. ITC really wanted to find a way they could contribute and secure the competitiveness of the entire value chain. Farmers were risk averse and did not invest much in their crops, resulting in a much lower value crop then possible. Furthermore, farmers were wary of experimenting with new methods so it was hard to find new sources of value and a way to break the unproductive cycle.
Breaking the cycle and contributing value: ITC knew that to reduce costs in the supply chain they would have to break the long tradition of farmers selling at the mandis, then traders selling to ITC. They knew that the choupal was very useful to farmers, yet extremely limited because it was merely verbal communication without the support of telecommunication or electricity. In an attempt to add value to the supply chain, ITC began to introduce the eChoupal system.
The eChoupal system provided value to farmers by offering them free, up-to-date marketing and
Wednesday, January 23, 2013
Background: Soybeans and their derivatives constituted two-thirds of ITC’s agricultural business. ITC had an integrated presence throughout the entire value chain, from procurement to export. Farmers had traditionally relied on choupals, an informal assembly, as their only source of agricultural knowledge and sold soybeans at the closest market, or mandi, to traders employed by ITC. Despite success of soybean products in domestic and international market, ITC’s input and output sides of the agricultural supply chain in India were still far from efficient mainly due to fragmented farms, weak infrastructure and the involvement of numerous intermediaries.
Key Issues and Important Perspectives: Farmers and processors were both in an unproductive cycle. Farmers did not have access to key inputs such as quality seed or herbicides and were losing over 60% of their crops potential value. Then middlemen clogged the supply chain and were often unfair with their payment to farmers. ITC really wanted to find a way they could contribute and secure the competitiveness of the entire value chain. Farmers were risk averse and did not invest much in their crops, resulting in a much lower value crop then possible. Furthermore, farmers were wary of experimenting with new methods so it was hard to find new sources of value and a way to break the unproductive cycle.
Breaking the cycle and contributing value: ITC knew that to reduce costs in the supply chain they would have to break the long tradition of farmers selling at the mandis, then traders selling to ITC. They knew that the choupal was very useful to farmers, yet extremely limited because it was merely verbal communication without the support of telecommunication or electricity. In an attempt to add value to the supply chain, ITC began to introduce the eChoupal system.
The eChoupal system provided value to farmers by offering them free, up-to-date marketing and