e Choupal and the Mandi system

Barikhera,Madhya Pradesh: The Yatra team came across an e choupal for the first in 46 days of the march so far. E choupal an ITC initiative, claim to confer the power of expert knowledge on even the smallest individual farmer. Thus enhancing his competitiveness in the global market.ITC started this in year 2000.It had covered 9 states, 38,500 villages and claimed to have empowered 4 million farmers with 6500 e-Choupal installations. It entered the market with the aim of transforming the Indian farmer into a progressive knowledge-seeking citizen. Enriching the farmer with knowledge; elevating him to a new order of empowerment by delivering real-time information and customized knowledge to improve the farmer's decision-making ability, thereby better aligning farm output to market demands; securing better quality, productivity and improved price discovery. The model helps aggregate demand in the nature of a virtual producers' co-operative, in the process facilitating access to higher quality farm inputs at lower costs for the farmer. The e-Choupal initiative also projected itself as a direct marketing channel, eliminating wasteful intermediation and multiple handling, thus reducing transaction costs and making logistics efficient.

But the situation is not like that .ITC claims of minimum profit and maximum benefit for the farmers but on the contrary absolutely false. Yatris got an entirely different picture of the whole thing. It is absolutely a corporate business strategy and was introduced as a profit making initiative but with a difference. It targeted the farmers. E choupals provided a place for the farmers to sell their produce .ITC offered a better price and paid the transportation cost also. But it’s a changed picture now. The transportation cost is bore by the farmer and the produce has to undergo a standard test and the price is fixed on the basis of the quality .This way the farmer does not find any significant difference between the regular mandi or the choupals.In both the cases the farmer has no say on the price of the produce . Choupals also offer farmers other products like fertilizers; a seed and so on. The company in this way has made a big market for its own products and is taking away farmer’s money in a way!

It also provides farmers with the smart cards, which allows it to enjoy the discount on the products sold by ITC .It is thus very clear that company rightly focused on the biggest consumer market –Rural area. We should not forget that maximum amount of urban products find market in the rural areas and the commodities include biscuits, salt, recharge cards, tea and so on. The Sanchalak –the farmer in whose house the computer is placed is also forced to keep company’s products in the rural market shop. Due to this the rural market is flooded with urban products. The money is not retained in the rural area but goes out .In the survey conducted by the Yatris it was observed that rural areas have the resources that can be used to produce local products that can easily replace the urban products.

The e-Choupal project claims to have benefited over 3.5 million farmers. But important point is that it has targeted mainly marginally rich farmers , the small and marginal farmers are not at all a part of it.

Another important fact is that ITC was in the business of soy products from 1990s.It started the e choupal targeting soybean ,cotton, shrimps etc.They kind of replaced the middle man and thought of buying the produce directly from the farmer thereby removing the share of the middle man. The gradation of the produce allowed them to get profit in this step as well.All the products that it makes is sold in the international market.The farmers however do not know what company does with the produce ,how much profit company earns after every product. The condition of the farmer is still same because the profit due to the primary and the secondary production still lies with the bigger players.