After helping ITC cut costs, now e-Choupal model set for an upgrade

S Sivakumar, a young manager, came up with a proposal of Rs 50 lakh and placed it before then ITC chairman, Y C Deveshwar, to set up e-Choupals, a model that leveraged internet power to empower small and marginal farmers.

But after much deliberation and realising the potential, a much bigger Rs 10-crore budget was approved, and the e-Choupal was born.

Over the past 20 years it has not only become a showcase project and an important part of ITC's agri-sourcing infrastructure, but also translated into higher incomes for farmers. Depending on who and where, the e-Choupal model has resulted in higher farmer incomes, anywhere between 70 per cent and 300 per cent; for ITC, superior market intelligence for commodity sourcing has resulted in 5 per cent lower costs. But these are the outcomes till 2016.

The model, which has traversed a long road of evolution, right from reorganising agri supply chains to a platform for a reverse flow of goods and services, to the creation of an ecosystem that benefits farmers and rural consumers, is set to get a fillip in its latest, Version 4.0, with technological advancement and the government’s agri reforms.

The e-Choupal 4.0, which primarily uses mobile phones and digital technology, started multiple pilots in 2019. The latest version in the present format focuses on strengthening agricultural entrepreneurship and agri-tech start-ups through agri services aggregator models, thereby empowering the farmers in multi-dimensional ways with modern technology and knowhow, crop advisory, assessing crop stress, weather forecasts, and so on, which is being translated into higher incomes for farmers, said Sivakumar, who is now the group head, agri and IT business, ITC.

Under e-Choupal 4.0, personalising services will be sharpened and driven by data analytics. “It will be a plug and play platform for agri tech start-ups,” explained Sivakumar.

As ITC broadens its reach and scope of operations, the agricultural reforms will give it a leg-up. On the one hand, exemption from the Essential Commodities Act (ECA) will remove the risk from scaling volumes, while additionally, not having to pay mandi cess for directly sourced volumes will improve the financial viability of investment.

Launched in June 2000 with just six installations, the number of e-Choupals grew quickly initially. By April 2003, there were about 1,900 of them, linking 11,000 villages and serving over 1.2 million farmers; by 2007, the number grew to 6,500. At one point, around six choupals were being opened a day. 

But around 2007-08, the progress hit the buffers due to export bans, subsidies, stock controls, the prohibition of futures, and slow amendment to the Agriculture Produce Marketing Committee (APMC) Act. The focus then shifted to expanding the scope of services.

Sivakumar said, under the current model, the parameter for attaining scale had shifted to the number of villages and farmers being added vis-à-vis addition in physical formats of e-Choupals. With smart phone and tablet penetration, the need to have physical infra in the form of village internet kiosks, has kind of waned. 

e-Choupal 4.0 aspires to reach out to 10 million farmers by 2030. With agri-reforms, advancement in technologies, and the boost for demand-driven agriculture, this is likely to be achieved well ahead of the target year, Sivakumar said.

The e-Choupal ecosystem has so far reached out to 4 million farmers.

Sivakumar added the recent government reforms in agricultural marketing and amendments to the Essential Commodities Act would facilitate increased corporate engagement in agriculture. 

ITC has been strengthening the buying of wheat and other grains through direct procurement, which will be further ramped up. The other area that will get a fillip as a result of the recently announced agri reforms is horticulture.

ITC is also planning to create fruit and vegetable clusters, said Sivakumar. The company has been procuring fresh fruit directly from farmers for its B Natural brand of juices. It also procures fresh vegetables for its Farmland brand of fresh vegetables and fruits.