Friday, January 02, 2004

E-choupals: Indian farmers on the Net

One of the promises of the Simputer and other computers for the poor has been the ability to access market information, so that the farmers can decide better when and where to buy and sell. Some people with no experience of farming or poverty, and with a great lack of imagination, doubt that this is of any consequence. I hope the doubters will read this article from the New York Times and understand that the impact of access to market information for farmers is becoming as important as we said it would.

This story is not only about soybeans, as the headline suggests, but also coffee, tea, cotton, shrimp, and many other products. Sixty companies have already taken part in a pilot project to sell services and goods, from insurance to seeds to motorbikes to biscuits, through ITC. Eventually the company expects to sell everything from microcredit to tractors via e-choupals.

Indian Soybean Farmers Join the Global Village
January 1, 2004

The story describes a farmer with a middle-school education who gets on a computer to check soybean prices on the Chicago Board of Trade Web site. Prices in India generally follow Chicago by several days, so this is quite valuable information, which has allowed him to multiply his income by ten times or more, from about $300 in 2002 to that much a month since the program started in 2003. He earns on increased commissions from local farmers' transactions, so his increased income comes from increasing their incomes.

The computer is provided by ICT-IBD through its e-choupal program. Choupal means "village square" in Hindi. The program increases company profits as well, allowing it to expand across the countryside. This is in sharp contrast with earlier NGO programs that could not be replicated due to dependence on donations rather than economic growth.

As described in the article, this is an excellent program. ICT-IBD is credited by some with doing as much as anybody to break down the Digital Divide. There are now 1,700 e-chopals in Madhya Pradesh, and 3,000 total in India. They are serving 18,000 villages, reaching up to 1.8 million farmers.

Unfortunately, ITC is placing its systems with high-caste villagers, in order to gain respect for the program. I believe that this is a long-term strategic error. Even in the short term, it restricts ITC's market share, and it also reinforce the caste system. If they were available only to low-caste villagers, the blow to the caste system would be severe, and ITC would end up with more customers. I base this notion on the experience of the Sarvodaya Shramadana Movement in Sri Lanka, which started among outcastes and has successfully broken down many caste barriers.

The story also says that 72% of India's population of 1.2 billion or so live in its 600,000 villages, which implies an average size of about 2,000 people. This is consistent with the estimate that about 4 billion people worldwide live in about 2 million villages, but it sounds implausible to me. I get the impression that really small villages are systematically undercounted everywhere. That doesn't affect the importance of ITC-IBD, though. Still, if anybody knows anything factual about how villages are counted, I would be glad of the information.

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