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FAI WORKSHOP ON IMPORTANCE OF ICTIN THE FERTILISER AND AGRICULTURE SECTORS

Sanjiv SharmaHead Agri-Inputs

ITC International Business Division

Date: 29th Aug, 2007

ROLE OF ICT IN RURAL COMMERCE AND

AGRICULTURAL EXTENSION.

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FLOW OF PRESENTATION

ICT Challenges & Prospects

INTRODUCTION ITC

ECHOUPAL

CHOUPAL SAAGAR

CHOUPAL PARDERSHAN KHET

CONCLUSION

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CHALLENGES ICT

1.INFRASTRUCTUREPOWER

-1 lac villages yet receive power

- existing ones receive for only a few hrs

BANDWIDTH

-100 kbps required to reduce any fatigue

MAINTAINANCE

-Adverse conditions

-Resource required for timely action

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2. DEMOGRAPHY

LANGUAGE

- Barely any input company has a vernacular website

USAGE SKILLS

- Excessive training required

3 .Business Viability

SUSTAINABILITY

- half hearted approachesSCALABILITY

- Should provide a substantial impact` for further adoption

CHALLENGES ICT

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AGRI EXTENSION & AGRI RESEARCH

INTERACTIVE MARKETING

AGRIFINANCE/INSURANCE

EMPLOYMENT

MARKET RESEARCH

PROSPECTS - ICT

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MOA = BUYING

M: Motivation

O: Opportunity

A: Ability

Focus on increasing ability required

PROSPECTS - ICT

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About ITC Ltd.

ITC is one of India's foremost private sector companies

Has a diversified presence in Cigarettes, Hotels, Paperboards &Specialty Papers, Packaging, Agri-Business, Packaged Foods &Confectionery, Branded Apparel, Greeting Cards and other FMCGproducts.

ITC's Agri-Business is one of India's largest exporters of agriculturalproducts.

ITC is one of the country's biggest foreign exchange earners (US $2 billion in the last decade).

E Choupal ICT based largest intervention in rural India

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Introduction

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VILLAGE

TOWN

Farmer

Mandi

Price Discovery@ Sell Transaction

Video

PRODUCT&

SERVICEPROVIDERS

MoneyLender

Financing

Market

Transaction

ExtensionCenter

Knowledge(Use)

Traditional TransactionsSell:

Buy:

Middleman

sunk costs, inconvenience,

other losses

high prices, spurious goods, information not timely

Information(Aggr)

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Web Portal in Local Languages

Internet Access in Villages

Best Practices in Farming

Q&A Facility for customising

Video Webcasting, Choupal Radio

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What is eChoupal ?

The echoupal Infrastructure

Tier 1: An ICT kiosk with Internet Access

In the house of a trained farmer Sanchalak

Within walking distance of target farmers

Additional investments in Solar Power & VSATs to overcome weak

infrastructure

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Maharashtra operationsTopology of eChoupal

UPS1

Battery1

Power Socket

UPS2

Battery2

Solar Panel 1

Solar Panel 2

Hughes Hub

Choupal Site

DW

Power Socket

eChoupal ComputerDMP Printer

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ECHOUPAL WEBSITE MARATHI PARICHARCHA

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ECHOUPAL WEBSITE MARATHI - SOYABEEN

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ECHOUPAL WEBSITE MARATHI EMAIL

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The eChoupal Services

Relevant & Real-time Information

Commodity prices, Local Weather, News

Customised Knowledge

Farm Management, Risk Management, Marketing Research

Direct Marketing Channel for Farm Produce

Lower Transaction Costs, Better Value through Traceability

Supply Chain for Farm Inputs

Screened for Quality, Demand Aggregation for Competitive

Prices & Efficient Logistics

What is eChoupal ?

Education

Financial services Life,General, Health & Crop Insurance

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How is eChoupal different?

1. Freedom of Information

Information & Knowledge is free of cost

No initial investment of the Sanchalak

Not subsidized- Govt does not pay , the shareholders look for a

competitive return.

2. Freedom of Transaction

Farmers are free to sell their produce anywhere

3. Entrepreneurship

No salary paid to Sanchalaks a commission based model

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eChoupal : Choupals & Hubs

Choupal

Within walking distance of a farmer

Hub

Within Tractor-able distance of a farmer

40 Choupals in a hub

Choupal

Choupal

Choupal

Choupal

Choupal

Choupal

Choupal Choupal

Choupal Choupal

Choupal

HUBHUBPlanned to graduate to a Rural SuperstorePlanned to graduate to a Rural Superstore

IT Infrastructure

Catchment

Village

CatchmentVillage

CatchmentVillage

CatchmentVillage

Catchment

Village

Catchment

Village

CatchmentVillage

CatchmentVillage

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TOWN

Mandi

Samyojak

Choupal Saagar

VILLAGE

Farmer

Sanchalak

Transactions

Transactions through ITC eChoupalSell:

Buy:

Information(e.g., PriceDiscovery)

Video

Knowledge(Customized)

PAN-INDIAN

PRODUCT&

SERVICEPROVIDERS

Price discovery @ village, choice, efficiency

Information + Customized Knowledge @ village, high quality,competitive prices, superior service

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. .

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An On Field Tutorial For 1 Million Farmers

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No single window assistance

Poor monitoring

Reactive

Lack of risk management

Unavailability of quality inputs

Lack of Usage capability

GAPS IN FARM EXTENSION

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THE AGRIEXTENSION FRAMEWORK :CPK

Dissemination ofInformation

Infrastructure:Echoupal(6500 internetkiosks in 7states)

-Best farm practices-Weather information-Query resolution-Email

Training and Visit method:Choupal Pradarshan Khet

Ensuring adoption

- Front line demonstrations-Seed multiplication-Yield improvement: 10%-Adoption of Innovative and moderntechniques

-Risk mitigation: Weather insurance

Practical &Realtime Extension

Objective

DeliveryMechanism

MeasurableOutcome

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Choupal Pradarshan Khet (CPK)

A Holistic, Integrated farm extension program aimedtowards yield improvement of focus crops.

Holistic: Seed to Seed.

Integrated: Involvement of all stake holders .

Farm extension: Blend of Group & T&V method.

Yield improvement: Through better & proven Agronomy.

Focus crops: Strategic interests of the nation.

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VALUE PROVIDED BY CPK -06 AND LEARNINGS

ENABLER

Quality tangible input : SEED.

CHALLENGE

Monitoring ,Data Capturing and Compilation in time.

Adoption

State Crop No of CPK Highest

Yield(Q

Mean

Yiled(Qtl)

Inc Yield(Qtl) INCREMENTAL

COST

INCREMENTAL

BENEFIT

IBCR

1 acr e each CPK CON CPK CON Mean FOR CPK (I NR) FROM CPK ( INR)

Maharashtra Soybean 1700 14 13 7.9 6.9 1 443 1228 2.8

Madhya Pradesh Soybean 3000 13 10.5 6.6 5.3 1.3 754 1637 2.2

Rajasthan Soybean 800 11 8 6.4 3.9 2.5 740 3144 4.2

Uttar Pradesh Rice 2000 41.3 30 26.9 18.5 8.4 676 5594 8.3

Total 7500

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CPK FY07

6000060000RABI

4000040000KHARIF

100000100000VOLUMEACRESPLOTSCPK

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Current Scope of Extension Activities

1. 95 districts in 4 states (MP, UP, MR, Raj)

2. Soybeans, Wheat, Paddy, Maize, Pulses

3. Started extending to vegetables in AP, Punjab andMaharashtra

4. Soil testing & balanced fertilization, foundation seed& seed treatment, new practices (e.g. zero tillage),water management, weed management, IPM, PHM

5. Impact 06 -07: Typical yield improvements 14% to29% in 15,000 Choupal Pradarshan Khets

6. 2007-08 Plan: 100,000 CPKs

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Communication

-Hand bills

-Website

-Choupal Radio

Registration

- Registration Fee- Registration data

Training-Pre sowing

- Best Practice Book

- Co presentations

Field visit

- Monitoring

- Data Collection

- Recommendation

Farmer meets

- Crop demo- Testimonials

The Process.

OutputMeasurement

- Data Collection

Information dissemination &Content Development Training district level

Training at village levelOrganizing Demonstrations

Organizing DemonstrationsFarmer School

Data validation, refinement&adoption

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Need Gap for Extension

No single window assistance

Poor monitoring

Reactive

Lack of risk management

Unavailability of quality inputs

Lack of Usage capability

Approach

Selective

Focus crops

Participative

Building farmers stake-Paid service

Cluster

Choupal

FarmersITC Channel Partners

Value

Incremental Yield

Risk mitigation

Quality Input @ right price

Traceability

Scaling up Farm input

Seed to Seed linkage

End User Interface

Data base

Incremental Sales

CPK VALUE PROPOSITION

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Public Input Cos

BEEJ NIGAM

RCFL

KRIBCHO

Private Input companies

BAYER CROPSCIENCE

PRO AGRO

MONSANTO

Panel of scientists & ITC

team

-content management

-project plan

Farmer groups

Govt officials

DMs

DDAs

Extension workers

ADOs

ITCs echoupalPlatform

(Monitoring and Assesment,Data capturing & analysis)

Participating farmers

Private Output company

ITC

Newspapers

HINDU

LOCAL EDDITIONS

FUNDS

Communication & Publicity

Participation &endorsement

QualityInputs

Need Gapanalysis

QualityInputs

Market awareness

Ripple effect-villagemeetings

Package ofpractices

Weather Insurance

AISCL

Risk mitigation

STAKE HOLDERS

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THE GENESIS OF A BRILLIANTCONCEPT

CPK

WE FORSEE

KPC

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Data base of Registered Farmers

Identificatory Section: Name, contact details, Crop,etc

Classificatory section:

Age : Probability of Adoption, Change element

Education : Progressive nature

Land holding: Depicts financial status

Informatory section:

Tractor: Y/N, Brand , Age

Kissan Credit Card: Y/N, Bank Name

Input usage : Adoption rate , Brands etc

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S_STATE_ID MADHYA PRADESH

S_HUB_ID [050001]Choupal SaagarY/N (All)

S_ACRE_NIRRI (All)

S_ACRE_IRRI (All)

S_FARM_EDU (All)

S_FARM_AGE (All)

S_FARM_SEX (All)

S_TRAC_BRND (All)

S_TRAC_MODL (All)

S_KIS_CRET_CARDNum (All)

S_BANK_ACC_NO (All)

S_BANK_NAME (All)

S_KHASAR_NO (All)S_BANK_LOC (All)

Data

Count of S_REG_NO Count of S_FARM_PHON

Total

DATA CAPTURING

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KPC

CPK

RURAL MKTRESEARCH

SECONDARY

INFORMATION

INTERNAL USER GROUPS

TRADING

RETAIL

RURALDISTRIBUTION

FINANCIALSERVICES

HORTICULTURE

USERS BECOME A PART OF IT AND RUN IT

EXTERNAL USER GROUPS

EDUCATION

HEALTH

INFORMATIONDISSEMINATION

OTHER GOVT PROG

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Our Vision for CPK

To build a robust Public Private Model for Farmextension that will create a KnowledgeManagement Center for ITC and other externalagencies to transform the rural landscape of India.

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Whats in it for the farmer?

Bottom line for the farmer

Increased yieldsIncreased yields

Improved QualityImproved Quality

Reduction in Transaction costsReduction in Transaction costs

Power of Scale to the Small Farmer

Customized Knowledge despite Heterogeneity

Real time information despite Distances

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Whats in it for ITC?

Better supply chain for ITCs Food & Agri Businesses

Costs, Quality, Traceability

Access to the Underserved Rural Markets

Through a Virtuous Cycle created by Larger Incomes, andfounded on Trust that is built

New ITES Business Opportunities

Health, Education, Entertainment

Shareholder Value through Serving Society Also, the infrastructure serves as a reliable delivery mechanism for

resource development initiatives (e.g. water,animal management)

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The eChoupal Value Proposition Low Cost Last Mile

Distribution at Low cost Wide reach in Rural India

High Credibility Increased product penetration

Right prices to consumers

Continuous visibility/ availability

Intelligent First Mile: Sharply Targeted Consumers

Product endorsement

Education on product usage and benefits

Brand building at low cost

Superior understanding of rural consumers

Footfall to Business

One stop shop at a tractor-able distance High Quality of Products and Services

Right Prices

Shopping environment

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Wheat

Soybean

Soybean

& Wheat

Coffee

Aqua

Wheat

Soybean

Soybean

& Wheat

Coffee

Aqua

Scale Today and Vision

Tomorrow

Kiosks: 6,500

Villages: 31,000

Farmers: 3.5 million

Year 2005:

Kiosks: 20,000

Villages: 100,000

Farmers: 10 million

Year 2010:

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Alliances:

UP Seed & TDC

NFL

Khaitan

International Panacea Limited

RCFL

Advanta

Farm Inputs

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Maxima

Durables/ Vehicles:

12

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Alliances:FMCG9

Gillete/ Kodak/ ACC/ Tata Steel/ Duraline.

Godrej Saralee

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THANK YOU