ITC’s eChoupals

NYTimes writes about ITC’s eChoupal project and how it is helping Indian farmers link globally:

E-choupal allows the farmers to check both futures prices across the globe and local prices before going to market. It gives them access to local weather conditions, soil-testing techniques and other expert knowledge that will increase their productivity.

Nonprofit organizations have tried similar initiatives but none have achieved anywhere near the scale that e-choupals have. There are now 1,700 in this state, Madhya Pradesh, and 3,000 total in India. They are serving 18,000 villages, reaching up to 1.8 million farmers.

As a result, say those who have studied the concept, the company behind e-choupals, ITC Ltd., has done as much as anyone to bridge India’s vast digital divide: most of its one billion people have no access to the technology developed by some of their fellow Indians, whether in Bangalore or Silicon Valley.

E-choupals may offer a model for all developing countries.

“It is a new form of liberation,” C. K. Prahalad, who led a case study on e-choupals for the University of Michigan Business School, said of the transparency and access to information they give farmers.

More than two-thirds of India’s people still depend on agriculture for their livelihoods. With little chance of the huge manufacturing boom that has employed many rural poor in China, the challenge is to increase farmers’ productivity.

Even more tantalizing, ITC now has the means to reach into some of India’s 600,000 villages, where 72 percent of the people live and where the greatest potential markets lie. Most businesses never venture to an area with fewer than 5,000 people, said ITC’s chairman, Y. C. Deveshwar.

Eventually the company expects to sell everything from microcredit to tractors via e-choupals and hopes to use them to become the Wal-Mart of India, Mr. Deveshwar told shareholders this year.

“We are laying infrastructure in a sense,” Mr. Deveshwar said. Sixty companies have already taken part in a pilot project to sell services and goods, from insurance to seeds to motorbikes to biscuits, through ITC.

E-choupals also provide information that will increase farmers’ productivity and income. An Indian soybean farmer is one-third as productive as an American one, said David Upton, co-author of a case study of e-choupals for Harvard Business School.

Raising farmer incomes was an important goal. S. Shivakumar, 43, the head of the company’s international business division and the originator of e-choupals, said he had long been frustrated by how a lack of opportunity limited the ambitions and achievements of Indian farmers.

“This has been a clear commercial initiative with social good in mind,” he said.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.