E-choupals to gross most: ITC

ITC's agri-business group, which runs the e-choupal business, accounted for a revenue of Rs 734 crore on gross sales of Rs 5,611 crore in the six months ended September 2003. Cigarette sales generated Rs 4,575 crore in the same period, but gross sales included the high taxes on cigarettes.

Deveshwar also charted out the expansion of the choupal network. In the next 5-7 years, ITC will have 20,000 choupals. Since each choupal covers around five villages, the company will have access to 100,000 villages. Each choupal currently serves 500-600 farmers.

The company is reportedly adding 5-6 choupals a day. At present, there are 2,600-odd choupals reaching out to more than 1.5 million farmers in close to 13,000 villages in Madhya Pradesh, Uttar Pradesh, Maharashtra, Karnataka and Andhra Pradesh.

Deveshwar explained that the revenue estimated from choupals in the coming years was not unfounded, given the importance of the rural economy. He said at present the propensity to spend was low among villagers because surplus income was low. However, the choupal network would boost farmers' income and increase their propensity to spend, he said, adding that this would have a multiplier effect on the economy.

Deveshwar went on to say that choupals would also solve Hindustan Lever Chairman M S Banga's problem of topline growth. Banga was also a speaker at the session.

The e-choupal initiative strives to transform an Indian farmer into a knowledge-seeking netizen. He will have access to information, which will help him to make the right choice about farm inputs. For ITC, it is the most cost-effective route for sourcing select commodities. It also enables sale of products and services to farmers.

Farmers can log on to the e-choupal website to order farm inputs, get information about best farming practices, know the prevailing market prices of their crops at home and abroad, and the weather forecast""all in the local language. There are four e-choupal websites covering soya, coffee, aqua and wheat.

Further, the e-choupal initiative has created a direct marketing channel, eliminating wasteful intermediation and multiple handling, and thereby reducing transaction costs and making logistics efficient. It has linked farmers to consumers in the local and global markets through ITC's farmgate sourcing and capabilities in branding, trade marketing and distribution.

The choupal effect

By 2010, e-choupals will pip income from sale of cigarettes, which accounted for 80% of ITC's revenue in the last financial year

The agri-business group, which runs the e-choupal business, accounted for a revenue of Rs 734 cr on gross sales of Rs 5,611 cr in the six months ended September 2003