1.

e-Choupal is an initiative of Indian Tobacco Corporation (ITC) Limited (a large Multi Business Conglomerate in India) to link directly with rural farmers for procurement of agricultural/aquaculture produce. 2. It is basically a virtual market place where farmers can do the transaction, facilitated by an internet linked computer, directly with a purchaser and can realize better price for their produce. In a better picture, it is a distributed transaction platform that brings together sellers, buyers along with information and service providers. 3. The service is provided through a web portal [www.e-Choupal.com] in different languages, offering farmers information, products and services they need to enhance farm productivity, improve farm-gate price realizations and cut transaction costs. Farmers can access latest local and global information on weather, scientific farming practices as well as market price at the village itself. 4. Traditionally agricultural commodities were procured in mandi (major Agricultural marketing centers in rural areas), where the brokers/middlemen used to make most of the profit. These middlemen used unscientific and sometimes outright unfair means to judge the quality of the product to set the price. Difference in price for good quality and inferior quality was less and hence there was no incentive for the farmers to invest and produce good quality output. With eChoupal, the farmers have a choice and the exploitative power of the brokers/middleman is neutralized. 5. Launched in June 2000, e-Choupal has already become the largest private sector initiative among all Internet-based interventions in rural India. e-Choupal services today reach out to more than 40 lakh farmers in over 40,000 villages across 8 states [M.P., Karnataka, A.P., Maharashtra, Rajasthan, Uttarakhand and Tamil Nadu]. It has future plans to cover 100,000 villages or one sixth of rural India, within a decade. 6. ITC has established computers and Internet access in rural areas across several agricultural important regions of the country, where the farmers can directly negotiate the sale of their produce with ITC. Each e-Choupal is run by a sanchalak (facilitator) who is a trained farmer or a youth of the village and serves an average of 600 farmers in the surrounding ten villages within about a 5 km radius. 7. Due to the e-Choupal services, farmers have seen a rise in their income levels because of rise in yields, improvement in quality of output and a fall in transaction costs. Even small farmers have gained from the initiative. Produce quality and volumes have risen. Prices of farm inputs have declined and quality of input has risen. 8. While the farmers benefit through enhanced farm productivity and higher farm gate price, ITC benefits from the lower net cost of procurement having eliminated costs in the supply chain that do not add value.

1. Introduction to ITC Ltd. Indian Tobacco Corporation (ITC) Limited is one of India's foremost private sector companies with a market capitalisation of over US $ 33 billion and a turnover of US $ 7 billion. It is one of the country's biggest foreign exchange earners (US $ 3.2 billion in the last decade). ITC is rated among the World's Best Big Companies, Asia's 'Fab 50' and the World's Most Reputable Companies by Forbes magazine, among India's Most Respected Companies by Business World and among India's Most Valuable Companies by Business Today. While ITC is an outstanding market leader in its traditional businesses of Cigarettes, Hotels, Paperboards, Packaging and Agri-Exports, it is rapidly gaining market share even in its nascent businesses of Packaged Foods & Confectionery, Branded Apparel, Personal Care and Stationery. ITC's Agri-Business is one of India's largest exporters of agricultural products. The Company's 'eChoupal' initiative is enabling Indian agriculture significantly enhance its competitiveness by empowering Indian farmers through the power of the Internet. This transformational strategy, which has already become the subject matter of a case study at Harvard Business School, is expected to progressively create for ITC a huge rural distribution infrastructure, significantly enhancing the Company's marketing reach.

2. ITC e-Choupal ITC's Agri Business Division has conceived e-Choupal as a more efficient supply chain aimed at delivering value to its customers around the world on a sustainable basis. The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterised by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, among others. It is basically a virtual market place where farmers can do the transaction, facilitated by an internet linked computer, directly with a purchaser and can realize better price for their produce. The service is provided through a web portal [www.e-Choupal.com] in different languages, offering farmers information, products and services they need to enhance farm productivity, improve farm-gate price realizations and cut transaction costs.

3. Scenario of Indian agriculture and condition of farmers. In India Maximum of landholders are fall under the category of Small farmers, so they are not able to meet out the increasing input cost and not able to introduce any new technological machineries in their farms. Farmers' access to markets is hampered by poor roads, rudimentary market infrastructure, excessive regulation and middlemen intervention in selling the products is very big problem in marketing the products. Hence the Indian farmers need easily accessible and highly structured markets without middleman interventions.