E-Choupal - IT Initiative Empowers Indian Farmers

Last week, I talked about how technology made an incredible difference to agriculture in the form of the Green Revolution. Technology's impact here was very direct; for example, the introduction of certain strains of rice which would produce higher yields. But technology can also help farmers indirectly, and such is the case with E-Choupal in India.

E-Choupal, a for-profit effort by ITC Limited, has implemented internet kiosks in rural villages which provide farmers not only a resource for vital information (weather, current prices, farming techniques), but also a virtual marketplace, linking them with both buyers of their produce and sellers of seeds/fertilizers. E-Choupal is successful because it combats two big problems with the traditional Indian agricultural markets: information asymmetry (on pricing, weather, and farming practices) and a convoluted supply chain (often with up to six or seven intermediaries including many middlemen who take much of the profits).

Wikipedia actually has a pretty good summary on how E-Choupal works:

Each ITC Limited kiosk [with internet access] is run by a sanchalak—a trained farmer. The computer housed in a farmer’s house is linked to the Internet via phone lines or by a VSAT connection and serves an average of 600 farmers in 10 surrounding villages within about a 5 km radius. The sanchalak bears some operating cost but in return gets commissions for the e-transactions done through his E-Choupal.

Studies have shown that the use of E-Choupal has led to a rise in the incomes of both large and small farmers in India. Equally amazing is that the system is run without government aid or subsidy and is in fact profitable (ITC's net procurement costs fall by approximately 2.5%). Currently there are over 6,500 E-Choupal kiosks serving over 1 million farmers. ITC is expanding still, and plans to have 20,000 kiosks and service 25 million farmers by 2010.

Interestingly, ITC is also looking to take advantage of the E-Choupal network channel its built by introducing more content and business (Murphy, InfoWeek Article).

"We're seeing it as a universal network that connects rural India to the rest of the world," says S. Sivakumar, CEO of the ITC's agri-business division. Sivakumar sees opportunities for credit, health care, and education delivered through the network, though it hasn't figured out the business models for all those yet. This year, it hopes to offer for-fee vocational training, such as in basic computer skills, or in the services and retail industries. It's looking to set up microfinance programs so people buy training and pay it back once they get a job. ITC's also looking at whether e-choupals can support fresh produce sales. Today, it focuses on grains.

E-Choupal is one of the biggest examples of how India's burgeoning IT sector is helping the poor. Another great example I read about recently is Babajob, another example of poverty-inspired IT innovation. Babajob hopes to take the power of social networks and apply them to the low-skilled job market. Take a look at this NYTimes article for more details. Though it may be too early to judge whether Babajob is a success, it and companies like it illustrate that there are infinite ways that IT may be able to help the poor in a sustainable (and even profitable) manner.

** Additional links to check out to learn more about E-Choupal:
Quick Video on youtube
World Resources Institute Case Study
Indian Economy Blog

An Introductory Entry: The Green Revolution

These days, when one thinks of technology, one thinks of the internet, information systems, networks, inventions, biotech, and the future. That is why it is also easy to fall into the trap of thinking that the use of technology to alleviate poverty is something new, that all these 21st century innovations now enable the chance for significant progress in the uphill climb against poverty. Though it is undeniable that there are certain possibilities that have only come into existence in the last couple of years (which indeed, future blog entries are likely to harp on), it is also interesting to note that the use of technology as a force against poverty has taken place for hundreds of years. In my opinion, there is no better example of this than in the field of agricultural technology.

The Green Revolution, which had its beginnings in the mid 20th century but continues have implications in numerous developing countries around the world, is believed to have saved hundreds of millions of lives from starvation. The use of programs in agricultural research and infrastructural development led to an agricultural transformation in major food crops, increasing worldwide food production significantly. There is a great article by the International Food Policy Research institute which summarizes the history, work, and debated legacy of the Green Revolution, ultimately concluding that, despite negative environmental impacts and non-universal success in different regions,

... the Green Revolution was a major achievement for many developing countries and gave them an unprecedented level of national food security. It represented the successful adaptation and transfer of the same scientific revolution in agriculture that the industrial countries had already appropriated for themselves. The Green Revolution also lifted large numbers of poor people out of poverty and helped many nonpoor people avoid the poverty and hunger they would have experienced had the Green Revolution not occurred. The largest benefits to the poor were mostly indirect, in the form of lower food prices, increased migration opportunities, and greater employment in the rural nonfarm economy.

The Green Revolution also was groundbreaking to existing schools of economic thought on issues of population growth: classical economists David Ricardo (whose models are still used today) and Thomas Malthus had both assumed technology as unchanging and constant, leading to views that population growth would outpace food production, resulting in famine/boom cycles. The Revolution illustrated that the application of modern science and technology led to an output in which food production actually increased faster than world population growth. Such a result illustrated that the world population was not constrained by food production (as previously thought), and so, at least theoretically, it should be possible to end famine. This sentiment and its implications are well illustrated by Nobel peace prize winner Norman Borlaug ("father of the Green Revolution") in a lecture in Oslo in 2000:

"I now say that the world has the technology – either available or well advanced in the research pipeline – to feed on a sustainable basis a population of 10 billion people. The more pertinent question today is whether farmers and ranchers will be permitted to use this new technology? While the affluent nations can certainly afford to adopt ultra low-risk positions, and pay more for food produced by the so-called “organic” methods, the one billion chronically undernourished people of the low income, food-deficit nations cannot."

Welcome!

Surprisingly, I've always seemed to avoid blogs - not reading them, of course, but having my own. Like a lot of other 21-year olds, I'm definitely no stranger to online forms of communication and expression*; after all, I grew up on them. But I think I've always felt like writing journal entries online [an obviously outdated definition of blogging] for the world to read was a bit too personal. Then again, maybe I just needed an excuse.

So maybe its a good thing I'm taking this elective class where the professor has given a relatively simple course-long assignment: to blog about tech successfully. Now that I think about it, I'm sort of excited: I get to write, which really I don't do much of anymore, and I get to explore and comment on subjects that interest me.

But before I get any further, I guess I should introduce myself. So I'm Goldie, a senior at USC's undergraduate business school. I couldn't really decide what to major in so I ended up doing a little bit of Finance, a little bit of Information and Operations Management, and a bit of international economics (my minor). I was born here in Southern California, but grew up entirely in Asia - mostly in Taipei and Singapore.

Being from Asia, I pretty much knew right away that I wanted to blog about Asia. It was incredibly hard to decide on a topic because there are so many huge things/trends/issues right now all around Asia that interest me, and especially to do with technology - globalization, tech hubs, IT shifts, biotech funding, venture capitalists, agricultural tech, tech policy, infrastructure, and the list goes on forever.

In the end, I've decided on a topic which could potentially touch upon all the above issues; at the same time, however, it is a topic that on its own has various implications and is of interest to everyone. My blog is going to be about how technology affects poverty, and more specifically, how technological innovations are being used to alleviate poverty.

In the weeks to come, I hope to comment on both the success stories in this arena (for example, the story of EChoupal, a computer/internet system that has instigated rural transformation across India by giving farmers direct access to buyers and seed sellers, as well as information on farming techniques, leading to improved yields), and also talk about potential tech-related solutions to the current obstacles in the battle against poverty.

Along the way, I welcome any comments, questions, and definitely opinions. Feel free to throw any links my way when it comes to related articles or topics.

Thank you!



*aka ICQ, quickDot, msn, aim, circleup, linkedin, facebook, and of course, other people's myspaces.