Y C Deveshwar

ITC has finalised an ambitious investment plan of nearly Rs 1,000 crore to power its aggressive IT initiative in agriculture marketing business. Over the next 5-7 years, the company plans to connect a sixth of India’s estimated six lakh villages in 14 states and bring them under its agriculture portal, e-choupal.

“Though it is difficult to quantify the actual investment that will be required, it takes about Rs 1-3 lakh to set up an e-choupal,” said Y C Deveshwar, chairman of ITC. The company currently spends around Rs 100 crore annually in areas of software, hardware and IT-enabled services.

Deveshwar projected e-choupal as the perfect example of the use of IT as a strategic tool for value creation and rural empowerment. “The initiative will help develop a trade marketing and distribution super highway for farm produce of the country and benefit lakhs of farmers who are currently at the mercy of the intermediaries,” he added.

The purpose of the e-choupal is to empower farmers with real time information on weather and prices so that they are prepared to face the ever-changing climate conditions and price fluctuations at the local mandis, he added.

ITC started with six e-choupals in 2000 and currently has 1,200 e-choupals linking 6,500 villages. In order to realise its dream, ITC would have to open four e-choupals every day over the next few years.

At present, ITC operates aqua-choupals in Andhra Pradesh, coffee-choupals in Karnataka, soya-choupals in Madhya Pradesh and wheat-choupals in Uttar Pradesh. It is also in talks with the West Bengal government to set up aqua choupals in that state.

The success of the e-choupal initiative has attracted the attention of Harvard Business School and Kellogg’s School of Management, with both taking it up as a case study in their curriculum. The World Bank has also approached ITC to render consultancy services in Africa based on a similar concept. “ITC has decided not to engage in such activities but instead wants to stay focused on the project in India,’ said Deveshwar.

A large number of companies have already evinced interest in using ITC’s network to penetrate the rural market. “One can distribute a wide variety of products through this network like, insurance, micro-credit, health services etc,” said Deveshwar.