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e-Choupal among the '10 biz ideas that changed India'
The Week - 31 Aug 2008

The August 31 2008 issue of The Week magazine features e-Choupal among the '10 biz ideas that changed India'.

The Article says:

Successfully building a farmer-centric ecosystem that is not government-owned and run and creating virtual markets in rural India

Entrepreneur: S. Sivakumar

Its aim is to ultimately become a universal platform for any kind of information-farming, social services, finance-that villagers would want access to. But like all transforming ideas, it was initially dismissed as 'unrealistic and impractical'. But S. Sivakumar, head, international business and agricultural division, ITC, was unfazed. He was convinced that as long as the process was simple and visibly useful and beneficial, the Indian farmer would learn to use IT to his advantage.

Sivakamar was proved right. Within a short while of being rolled out, the concept caught on.

Operating out of village internet kiosks managed by the farmers, called sanchalaks, the e-Choupal gave to the agricultural community convenient access in their local language to information on weather, market scenarios, scientific farm practices and risk management and facilitating the sale and purchase of farm inputs (with embedded knowledge on how to use optimally).

Appreciating the imperative of the much-abused middlemen in the Indian rural context, it makes use of their physical transmission capabilities like aggregation, logistics and bridge financing, while eliminating them from the chain of information flow and market signals.

But how did the idea germinate? It all started when Sivakumar emphasised to group chairman Y. C. Deveshwar that if the company wanted to grow in the agri business, it needed to pump in more money along the value chain. Deveshwar had initially suggested using models similar to that of Ebay and Amazon. But he finally fell in with Sivakumar's concept and the first e-Choupal became operational in June 2000.

Sivakumar admitted though that initially even he was not sure whether the project would be able to establish trust with the farmers.

But the problem was just in the mind. Having set aside two days for training six sanchalaks to begin with, they were taken by surprise when they completed the first phase of training in only three hours.

Said Sivakumar: "Unlike the typical urban methodology of starting with the basics, we started with the benefits of e-Choupal and how farmers could derive them." With input from the farmers, the choupal web portal became operational.

Since it was aimed at making markets more transparent and enhancing the bargaining power of farmers, it saw some resistance from traders. But by 2004, e-Choupal became firmly established through nearly 6,500 kiosks across nine states (MP, Haryana, Uttaranchal, Karnataka, Andhra Pradesh, UP, Maharashtra, Rajasthan and Kerala).

ITC aims to reach 15 states by 2010, covering 1,00,000 villages with 20,000 choupals. It also plans to expand its horizon of services: including fruits and vegetables in its portfolio of agricommodities, besides adding information on health services, vocational education and micro-financing.