IT for Change Case Study e-Choupal â An Initiative of ITC

IT for Change Case Study 

e-Choupal – An Initiative of ITC 

This case study is part of a research project that sought to analyse how different telecentre models approach 

development on the ground, proceeding to elaborate a typology based on the cornerstones of participation 

and equity. To conduct this assessment, four telecentre projects were examined: the Gujarat government’s 

E-gram project, the corporate-led venture by ITC called e-Choupal, the private enterprise model of Drishtee, 

and the community-owned telecentres of the M.S. Swaminathan Research Foundation (MSSRF). Two main 

criteria were used in selecting the case studies – the diversity of ownership models, and the requirement of 

a sufficient scale of the intervention. In addition to the field research conducted in 2008 using qualitative 

methods, the research also built on secondary sources. 

A review of the literature in the field of Information and Communication Technology for Development (ICTD) 

showed that while telecentres are viewed as contributing positively to development in general, they are largely 

not really seen as a space for catalysing transformative social change. Instead, there remains in the notion 

of telecentres for development a perpetuation of market-led approaches, wherein telecentres are viewed 

as a strategic means for expanding markets in rural areas, especially for corporates. In this approach, poor 

communities are repositioned as an opportunity for business, with ICTs as the most effective way of connecting 

them to the global market system. This espouses a version of inclusion that instumentalises disadvantaged 

sections, overlooking the potential of telecentres to serve as a tool for equitable and participatory development. 

Such subjugation of local development and the local community to the neo-liberal ideology can be seen as the 

‘Walmartisation’ or ‘marketisation’ of development (Gurstein, 2007:6). 1 

A critical question for telecentre related policies and programmes therefore examines how ICTs can trigger 

structural-institutional changes that promote overall human development, going beyond exclusive market 

frameworks. Based on a critical analysis of findings from the field, the research attempted to examine two 

hypotheses. The first relates to the need for the communitisation of ICTD, as is a strong move towards 

communisation in other areas of development, like health, livelihoods, education, etc. Second, the development 

of an ICT governance regime favouring an open, inclusive and participatory socio-technical architecture. The 

latter seeks to empower the peripheries, acting against the strong tendency towards centralisation of power 

of the unregulated use of ICTs. 

The following analysis of the e-Choupal project of ITC will be situated within this larger debate. 2 

IT for Change 

2008 

I. Background 

and approach to 

development 

E-Choupal is an initiative of the 

International Business Division 

(IBD) of one of India’s leading 

private companies, ITC Ltd. 

Beginning in 2000, ITC set up a 

network of ICT kiosks around 

the country, called e-Choupal (an 

open meeting place in a village). 

According to Sachin Sahay, 

General Manager at IBD, the aim 

was to ‘build an intelligent first 

mile and a low cost last mile 

for agricultural products and 

services’. ICTs are the primary 

means of operationalising this 

vision. Every e-Choupal centre 

is equipped with a computer, 

Internet connectivity through 

satellite technology and solar 

power. In addition, it provides 

access to a web portal with 

current agriculture commodity 

prices at the village level 

for produce transactions. 

Additionally, e-Choupal supports 

best practices in farming 

through training sessions, 

provides information on weather 

conditions, and supplies quality 

agricultural inputs like seeds and 

fertilisers. E-choupal centres 

form part of IBD’s re-engineered

IT for Change Case Study, e-Choupal – An Initiative of ITC 

sourcing network, assuring 

supply for the company while 

cutting costs through improving 

the efficiency of the procurement 

value chain, which also results 

in better margins for the farmer. 

Apart from buying agricultural 

produce, other services, 

including informational services, 

are provided with the help of this 

ICT backbone. 

With an overall vision to improve 

the quality of life in rural 

India through a market-led 

business model, the e-Choupal 

programme aims to enhance the 

returns on agriculture through 

the dual strategy of ICT-led 

improvements in production and 

procurement efficiencies. This 

is expected to in turn trigger a 

virtuous cycle of higher incomes, 

enlarged capacity for farmer risk 

management, larger investments 

and higher output quality. 

A strong focus on increasing 

rural incomes through ICTled 

procurement is positioned 

as a way to unleash the latent 

demand for industrial and retail 

goods for fuelling the continued 

growth of the Indian economy. 

The economic development 

perspective lends weight for 

the creation of an ecology of 

strategic rural markets, where 

products and services are 

especially targeted towards 

improving agricultural valuechains. 

Additionally, fast moving 

consumer goods (FMCGs), 

banking and insurance services 

are routed through the ITC 

channel, while quality retail 

products are provided at 

affordable prices with an accent 

on brand building. Through 

e-Choupal, procurement hubs 

and Choupal Sagars (a kind of 

rural supermarket), information 

and products in urban centres 

are made available at the rural 

level, thus reducing travel and 

time investments for rural 

populations. E-Choupal therefore 

seeks to leverage ICTs to 

integrate rural areas into large 

corporate markets, and thus 

hopes to improve earnings as 

well as both the quantity and 

quality of consumption in rural 

areas. 

II. Implementation 

model and actors 

The e-Choupal model is 

positioned as an alternative 

to traditional modes of 

procurement where farmers 

travel to the government market 

(or mandi) to sell their produce. 

ITC provides infrastructure and 

connectivity at the e-Choupal 

centres, each of which services 

4-5 villages. At the centre, 

farmers can access a web portal 

with current market rates from 

a wide range of procurement 

centres, including mandis and 

ITC procurement hubs. An ITC 

procurement hub is set up for 

every 20-30 km radius, servicing 

about 30-40 centres. Farmers 

use the services of the sanchalak 

(the centre operator) to find 

the price their produce can 

fetch at different places, via the 

computer. Using this information, 

they are ‘empowered’ to make an 

informed decision on when and 

at which procurement centre to 

sell their produce for maximum 

profit. Through information 

accessed at the e-Choupal, 

farmers can choose to travel to 

the ITC hub to sell their produce 

at rates that are fixed with a 

flooring for any given day but 

which may increase because 

of the company’s policy of no 

ceilings on rates. The sanchalak 

gets a fixed commission set 

by ITC for every transaction 

from his village that is realised 

through the ITC procurement 

hub. The establishment of 

the procurement hub has 

enabled the company to cease 

procurement activities at 

government mandis. 

ITC also initiated the Choupal 

Pradarshan Kheth (Choupal 

Demonstration Field) programme 

to improve yields with a 

demonstration plot of land for 

every village cluster. Accepted 

best practices have been put 

into practice along with high 

quality fertilisers and seeds, and 

comparisons made with yields 

from control plots to encourage 

farmers to switch to improved 

farming inputs and methods. 

This programme is one aspect of 

ITC’s commitment to improved 

agricultural yield, and is 

supplemented by the provision of 

high quality seeds and fertilisers, 

both at the e-Choupal and at 

the ITC rural retail centre, the 

Choupal Sagar (CS). 

CS provides the third spoke 

in ITC’s procurement and 

productivity improvement 

strategy along with e-Choupal 

and the procurement hub. 

Modelled as a one-stop retail 

supermarket experience for 

rural customers, it is set up 

in locations that lie within 30 

kilometres of any e-Choupal 

village. It thus doubles up 

as a hub with an electronic 

weighbridge for produce, fuel 

pumps, and a sale point for heavy 

2


duty consumer goods and FMCGs. 

Additionally, the CS conducts 

training sessions for agriculture 

related practices and has tie-ups 

with private hospitals to provide 

check-ups at a nominal fee. CSs 

are beginning to branch into 

banking, insurance and pharmacy 

related services, and are 

conceptualised as a part of ITC’s 

strategy to build a collaborative 

‘Pan-Indian Network of 

Companies’ that service the 

untapped rural markets through 

the single ITC channel. 

E-Choupal centres are managed 

by a sanchalak selected from the 

village. ITC stipulates farmers 

with mid-sized (about 25 acres) 

land holdings for sanchalak 

selection, and insist that they have 

a proven record of community 

involvement. Actual selection 

is managed by ITC through 

consultations with the panchayat, 3 

and is formalised through a 

public oath-taking ceremony. ITC 

conducts initial computer literacy 

training for the sanchalak and 

organises free long-term technical 

support. In addition to their work 

on the computer, sanchalaks are 

encouraged to stock and sell 

FMCGs provided by ITC and are 

trained in basic marketing and 

accounting skills. 

An upsanchalak serves as a link 

between the e-Choupal village 

and surrounding villages. The 

upsanchalak communicates daily 

prices received from the sanchalak 

to farmers in his village. This 

further reduces the time spent 

on finding agricultural prices by 

farmers in non-e-Choupal villages. 

The sanchalaks and upsanchalaks 

negotiate a sharing of the ITC 

commission amongst themselves. 

In addition, ITC has engaged 

salaried employees, sanyojaks, 

who along with a small staff 

manage the hub where farmers 

come to sell their produce. 

ICTs enable effective control by 

the company of all processes 

in the procurement chain, right 

from price setting and daily 

procurement volumes, to the 

monitoring of payments to 

farmers, and commissions and 

target setting for sanchalaks 

and hubs. These decisions are 

taken after careful analysis 

keeping the overall profitability 

of ITC in consideration. The 

front-end of the whole system is 

the e-Choupal centre, where the 

whole village can be introduced 

into the ITC procurement and 

retail channel. 

In this process, ITC more or 

less monopolises agricultural 

procurement in the areas that 

it operates in. Increasingly, it 

also monopolises channels of 

agriculture related information 

and products, as well as the 

rural market for many other 

services and products, from 

insurance to bakery products. 

This reflects their business vision 

as a company. To what extent this 

business approach correlates 

with their rural development 

goals is a question for analysis 

and independent judgement. 

Development impact 

– Is a complete 

corporate-community 

win-win possible? 

How long will a monopoly 

sustain consumer advantage 

Even if one were to go by the 

logic that markets themselves 

can ensure development, it 

would not stand to market logic 

that a corporate amassing 

a monopoly, as is ITC’s 

business model, could sustain 

the interests of consumers 

for long. Moreover, ITC’s 

business model extends 

to monopolising channels 

of information. It provides 

market prices in different 

mandis, procures the produce, 

offers information about best 

agriculture practices and 

provides agricultural inputs, 

like seeds and fertilisers. 

Simple economic logic tells us 

that the apparent consumer 

benefits accrued when a 

monopoly is being established 

is short lived. In addition, 

such an approach staves off 

alternative avenues, such as 

freelance government mandi 

based procurement agents who 

are folding up their business in 

areas where ITC operates. It 

is highly questionable whether 

these monopolies, and the 

totalising potential that ICTs 

contain, can be beneficial for 

the community. 

Is the market enough to serve 

a community’s development 

priorities and interests? 

The e-Choupal system is built 

around the needs and interests 

of rich farmers, with some 

spin-off benefits for those with 

some degree of purchasing 

power. There is no proof that 

the trickle-down benefit of 

an improved local agriculture 

economy will reach the weaker 

sections of the community. 

On the other hand, increased 

reliance on commercial crops 

can decrease local food security, 

3


both through reduced availability 

and increased prices. Increased 

re-orientation (and dependence) 

of the local economy on the 

e-Choupal system can have 

problematic mid to long term 

results, which needs to be 

carefully assessed, and not left 

to the involved corporate. This 

is crucial because the local 

community has neither any role 

nor much leverage to influence 

the emerging dominant system. 

With monopolistic control over 

an entire local agricultural 

ecology, e-Choupal represents 

a development model where 

a transnational corporation 

deploys a captive, unregulated 

ICT network that locks in 

a large number of farmers, 

crowding out the small and 

marginal land-holding farmers. 

It thus promotes corporate 

dependency of local agriculture 

and monoculturisation of agroproduction 

systems – issues that 

are in fact intrinsic to the choice 

of development model. 

Threat to public and 

community based systems 

The e-Choupal system not only 

serves as a monopoly agriculture 

produce procurement channel, 

but also a source of agriculture 

and development information, 

agriculture extension services, 

and increasingly, community 

information for upstream actors. 

It thus threatens to overwhelm 

public and community-based 

systems that traditionally 

undertook many of these 

activities. In fact, it is a real 

concern that, citing the presence 

of e-Choupal kind of corporate 

systems, many governments will 

begin to withdraw their presence 

in these areas. Consequently, 

this raises a number of equity 

and social justice based issues. 

There are some early indications 

that this may already be taking 

place. There is no leverage 

that the local community and 

local self-governance systems 

have over the e-Choupal 

system, and during interviews, 

most e-Choupal actors spoke 

rather dismissively about such 

governance systems. 

While ICTs can and should 

be used to improve market 

efficiency in rural areas, it 

must be done in a manner that 

promotes competitive markets 

that valorise local enterprise and 

other local economic resources, 

rather than monopolistic 

corporate-dependent markets. 

At the same time, ICTs should 

also be used to strengthen rural 

activities that are best done by 

the public sector, rather than 

being employed to justify its 

withdrawal. Furthermore, ICT 

enabled empowerment of the 

local community will enable 

both their active and equal 

participation in the market 

as well as governance and 

development related activities. 

Telecentre models should 

address this imperative centrally 

through an engaged involvement 

of communities in running 

telecentres. 

Endnotes 

1 Gurstein M. (2008), ‘Towards a Critical Theory of Telecentres: In the 

Context of Community Informatics ‘, IT for Change: Bengaluru 

2 This case study is part of a broader research undertaking funded by 

the Social Science Research Council (SSRC), an independent nonprofit 

organisation based in New York. The study was commissioned 

under the Collaborative Grants in Media and Communications: 

Necessary Knowledge for Democratic Public Sphere programme of 

SSRC 

3 Panchayat is an administrative unit of the government at the village 

level 

Credits 

Coordination : Chloé Zollman 

Design 

: Varun Dhanda, Krupa Thimmaiah 

Research report : Roshni Neggehalli, Deepa Shankaran 

Research coordination : Parminder Jeet Singh, Anita Gurumurthy 

Editor 

: Parminder Jeet Singh, Deepika Khatri 

Editorial support : Krittika Vishwanath 

Printed by 

: National Printing Press, Bengaluru 

IT for Change is an India-based NGO working 

on information society theory and practice 

from the standpoint of equity and social justice. 

Through our research, advocacy and field 

projects, we seek to challenge approaches that 

fail to address the structural exclusions in the 

emerging information society. We also propose 

alternative models that are participatory 

and equitable. Our work spans a range of 

development arenas - gender, education, 

community media and governance. IT for 

Change is in Special Consultative Status with 

the Economic and Social Council of the United 

Nations. 

A detailed version of this case study can be requested from communications@ITforChange.net. 

Creative Common License: Attribution-NonCommercial-ShareAlike 3.0 

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IT for Change Case Study e-Choupal â An Initiative of ITC

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