e-Choupal
The ITC eChoupal Initiative
India’s agricultural sector in the 1990s can be characterized as fragmented with a fragile infrastructure. The mode of operation especially, soybean farming, has remained unchanged since their early ancestors. Along with unchanged practice, most of India’s farmers are illiterate and live in remote villages. The ITC’s e-Choupal tackles the challenges posed by Indian agriculture to identify how to improve the inefficient supply chain of agricultural goods. ITC is a multi divisional company and it had identified that their International Business Division (IBD) was lagging behind other divisions. That being said, ITC seems to possess a strong sense of strategic competiveness, which allowed them to identify that the soybean portion of their model, which was two-thirds of their agricultural exports, was their key to success. ITC was able to identify and spawn their initiative through a tradition, which all-rural farmers were already dependent of, a choupal. Through the eChoupal ITC is hoping to fix the current ineffective supply chain. ITC truly believed that with “greater knowledge of just what it was purchasing when procuring crops from rural farmers, value increased for both the company and the farmer.” This would allow them to have better control over the quality of the product it sourced. It would also allow knowledge sharing between themselves and the farmers and higher quality products would lead to more competitive pricing in the international market. Currently, farmers were losing 60-70% of potential crop value and the standards were on a much lower level compared to the global demand, which again negatively effects their pricing. To make matters worse there was the inclusion of a middleman, the CAs, and the mandis, which again reduced profit margins. Farmers lacked critical resources and knowledge, which resulted in poor qualities and practices. “On any given day, at least 1,000 farmers could be found trying to file into
India’s agricultural sector in the 1990s can be characterized as fragmented with a fragile infrastructure. The mode of operation especially, soybean farming, has remained unchanged since their early ancestors. Along with unchanged practice, most of India’s farmers are illiterate and live in remote villages. The ITC’s e-Choupal tackles the challenges posed by Indian agriculture to identify how to improve the inefficient supply chain of agricultural goods. ITC is a multi divisional company and it had identified that their International Business Division (IBD) was lagging behind other divisions. That being said, ITC seems to possess a strong sense of strategic competiveness, which allowed them to identify that the soybean portion of their model, which was two-thirds of their agricultural exports, was their key to success. ITC was able to identify and spawn their initiative through a tradition, which all-rural farmers were already dependent of, a choupal. Through the eChoupal ITC is hoping to fix the current ineffective supply chain. ITC truly believed that with “greater knowledge of just what it was purchasing when procuring crops from rural farmers, value increased for both the company and the farmer.” This would allow them to have better control over the quality of the product it sourced. It would also allow knowledge sharing between themselves and the farmers and higher quality products would lead to more competitive pricing in the international market. Currently, farmers were losing 60-70% of potential crop value and the standards were on a much lower level compared to the global demand, which again negatively effects their pricing. To make matters worse there was the inclusion of a middleman, the CAs, and the mandis, which again reduced profit margins. Farmers lacked critical resources and knowledge, which resulted in poor qualities and practices. “On any given day, at least 1,000 farmers could be found trying to file into