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1 2012

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Creating procurement efficiencies in agribusiness in India

Tewari A., Ghosh P., Sangwan S.

Management and Production Engineering Review

2012

Vol. 3, No. 3

63-70

e-Choupal is an initiative of Indian Tobacco Company (ITC) Limited which came into existence in the year 2000 with an objective to link rural farmers via the Internet to procure agricultural products. Traditionally, agricultural commodities were procured in mandis, major agricultural marketing centers in rural areas, where the middleman make most of the profit. These middlemen used unscientific and unfair means to judge the quality and set the price of the product and therefore there has been less incentive for the farmers to invest and produce good quality output. With the formation of e-Choupal, the farmers were given a choice to sell their products freely diminishing the influence of the middlemen. This initiative also addressed issues like fragmented farms, weak institutions, and information asymmetry amongst farmers.This paper examines and evaluates the business model of ITC e-Choupal and studies the acceptance of this business by the farmers.