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Sluggish reforms hit e-choupal expansion: ITC
The Hindu Business Line - 21 Nov 2011

ITC, which has started e-choupal model to link farmers with markets, seems to have put a temporary halt to expansion of the model for the moment due to sluggish market reforms.

"We have stopped expanding e-choupals to other villages. But we have deepening penetration in more commodities that included financial services," Mr S. Sivakumar, Chief Executive Officer of ITC Agri-Business division, said.

He was talking to reporters on the sidelines of Food 360 Degrees conference organised by Federation of Indian Chamber of Commerce and Industry (FICCI) here on Monday.

The Essential Commodities Act, too, is proving to be a hurdle for companies engaged in agricultural commodities business.

The regulation might have served its purpose earlier, but it needed to be reformed keeping in mind the changing needs.

Uncertainty in movement of commodities in and out of the purview of this Act put off entrepreneurs.

They were withdrawing to other activity as they were not able to cope with situation, Mr Sivakumar said.

Food industry needed constant flow of stocks to maintain a steady flow of final product.

If keeping stocks was considered hoarding that would hurt the industry. If you didn't pile up necessary stocks, the produce was sold out when you needed it, he observed.

Food inflation

Mr Sivakumar saw softening of food prices in the near term as kharif output was expected to flow in.

"But it is still a concern in the long term. Economy is growing at 7-8 per cent but agricultural productivity is growing only at 2-3 per cent. Consumption is raising but the production is not going up proportionately," he said.

Choupal Fresh

On Choupal Fresh expansion, he said the company was piloting pop-up store model in Hyderabad to tap retail opportunities near residential complexes and colonies. "Generally, we test for two seasons. We expect the pilot to be over by mid 2012. We will then review it and take a decision on expansion," he said.

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