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IT for Change Case Study

e-Choupal – An Initiative of ITC


IT for Change
2008
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

I. Background According to Sachin Sahay, access to a web portal with


and approach to General Manager at IBD, the aim current agriculture commodity
was to ‘build an intelligent first prices at the village level
development
mile and a low cost last mile for produce transactions.
E-Choupal is an initiative of the for agricultural products and Additionally, e-Choupal supports
International Business Division services’. ICTs are the primary best practices in farming
(IBD) of one of India’s leading means of operationalising this through training sessions,
private companies, ITC Ltd. vision. Every e-Choupal centre provides information on weather
Beginning in 2000, ITC set up a is equipped with a computer, conditions, and supplies quality
network of ICT kiosks around Internet connectivity through agricultural inputs like seeds and
the country, called e-Choupal (an satellite technology and solar fertilisers. E-choupal centres
open meeting place in a village). power. In addition, it provides form part of IBD’s re-engineered
IT for Change Case Study, e-Choupal – An Initiative of ITC

sourcing network, assuring and Choupal Sagars (a kind of flooring for any given day but
supply for the company while rural supermarket), information which may increase because
cutting costs through improving and products in urban centres of the company’s policy of no
the efficiency of the procurement are made available at the rural ceilings on rates. The sanchalak
value chain, which also results level, thus reducing travel and gets a fixed commission set
in better margins for the farmer. time investments for rural by ITC for every transaction
Apart from buying agricultural populations. E-Choupal therefore from his village that is realised
produce, other services, seeks to leverage ICTs to through the ITC procurement
including informational services, integrate rural areas into large hub. The establishment of
are provided with the help of this corporate markets, and thus the procurement hub has
ICT backbone. hopes to improve earnings as enabled the company to cease
well as both the quantity and procurement activities at
With an overall vision to improve
quality of consumption in rural government mandis.
the quality of life in rural
India through a market-led areas.
ITC also initiated the Choupal
business model, the e-Choupal II. Implementation Pradarshan Kheth (Choupal
programme aims to enhance the model and actors Demonstration Field) programme
returns on agriculture through to improve yields with a
the dual strategy of ICT-led The e-Choupal model is
demonstration plot of land for
improvements in production and positioned as an alternative
every village cluster. Accepted
procurement efficiencies. This to traditional modes of
best practices have been put
is expected to in turn trigger a procurement where farmers
into practice along with high
virtuous cycle of higher incomes, travel to the government market
quality fertilisers and seeds, and
enlarged capacity for farmer risk (or mandi) to sell their produce.
comparisons made with yields
management, larger investments ITC provides infrastructure and
from control plots to encourage
and higher output quality. connectivity at the e-Choupal
farmers to switch to improved
centres, each of which services
farming inputs and methods.
A strong focus on increasing 4-5 villages. At the centre,
This programme is one aspect of
rural incomes through ICT- farmers can access a web portal
ITC’s commitment to improved
led procurement is positioned with current market rates from
agricultural yield, and is
as a way to unleash the latent a wide range of procurement
supplemented by the provision of
demand for industrial and retail centres, including mandis and
high quality seeds and fertilisers,
goods for fuelling the continued ITC procurement hubs. An ITC
both at the e-Choupal and at
growth of the Indian economy. procurement hub is set up for
the ITC rural retail centre, the
The economic development every 20-30 km radius, servicing
Choupal Sagar (CS).
perspective lends weight for about 30-40 centres. Farmers
the creation of an ecology of use the services of the sanchalak CS provides the third spoke
strategic rural markets, where (the centre operator) to find in ITC’s procurement and
products and services are the price their produce can productivity improvement
especially targeted towards fetch at different places, via the strategy along with e-Choupal
improving agricultural value- computer. Using this information, and the procurement hub.
chains. Additionally, fast moving they are ‘empowered’ to make an Modelled as a one-stop retail
consumer goods (FMCGs), informed decision on when and supermarket experience for
banking and insurance services at which procurement centre to rural customers, it is set up
are routed through the ITC sell their produce for maximum in locations that lie within 30
channel, while quality retail profit. Through information kilometres of any e-Choupal
products are provided at accessed at the e-Choupal, village. It thus doubles up
affordable prices with an accent farmers can choose to travel to as a hub with an electronic
on brand building. Through the ITC hub to sell their produce weighbridge for produce, fuel
e-Choupal, procurement hubs at rates that are fixed with a pumps, and a sale point for heavy

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

duty consumer goods and FMCGs. In addition, ITC has engaged can ensure development, it
Additionally, the CS conducts salaried employees, sanyojaks, would not stand to market logic
training sessions for agriculture who along with a small staff that a corporate amassing
related practices and has tie-ups manage the hub where farmers a monopoly, as is ITC’s
with private hospitals to provide come to sell their produce. business model, could sustain
check-ups at a nominal fee. CSs the interests of consumers
ICTs enable effective control by
are beginning to branch into for long. Moreover, ITC’s
the company of all processes
banking, insurance and pharmacy business model extends
in the procurement chain, right
related services, and are to monopolising channels
from price setting and daily
conceptualised as a part of ITC’s of information. It provides
procurement volumes, to the
strategy to build a collaborative market prices in different
monitoring of payments to
‘Pan-Indian Network of mandis, procures the produce,
farmers, and commissions and
Companies’ that service the offers information about best
target setting for sanchalaks
untapped rural markets through agriculture practices and
and hubs. These decisions are
the single ITC channel. provides agricultural inputs,
taken after careful analysis
like seeds and fertilisers.
E-Choupal centres are managed keeping the overall profitability
Simple economic logic tells us
by a sanchalak selected from the of ITC in consideration. The
that the apparent consumer
village. ITC stipulates farmers front-end of the whole system is
benefits accrued when a
with mid-sized (about 25 acres) the e-Choupal centre, where the
monopoly is being established
land holdings for sanchalak whole village can be introduced
is short lived. In addition,
selection, and insist that they have into the ITC procurement and
such an approach staves off
a proven record of community retail channel.
alternative avenues, such as
involvement. Actual selection
In this process, ITC more or freelance government mandi
is managed by ITC through
less monopolises agricultural based procurement agents who
consultations with the panchayat,3
procurement in the areas that are folding up their business in
and is formalised through a
it operates in. Increasingly, it areas where ITC operates. It
public oath-taking ceremony. ITC
also monopolises channels of is highly questionable whether
conducts initial computer literacy
agriculture related information these monopolies, and the
training for the sanchalak and
and products, as well as the totalising potential that ICTs
organises free long-term technical
rural market for many other contain, can be beneficial for
support. In addition to their work
services and products, from the community.
on the computer, sanchalaks are
encouraged to stock and sell insurance to bakery products. Is the market enough to serve
FMCGs provided by ITC and are This reflects their business vision a community’s development
trained in basic marketing and as a company. To what extent this priorities and interests?
accounting skills. business approach correlates
with their rural development The e-Choupal system is built
An upsanchalak serves as a link around the needs and interests
goals is a question for analysis
between the e-Choupal village of rich farmers, with some
and independent judgement.
and surrounding villages. The spin-off benefits for those with
upsanchalak communicates daily Development impact some degree of purchasing
prices received from the sanchalak – Is a complete power. There is no proof that
to farmers in his village. This corporate-community the trickle-down benefit of
further reduces the time spent win-win possible? an improved local agriculture
on finding agricultural prices by economy will reach the weaker
farmers in non-e-Choupal villages. How long will a monopoly sections of the community.
The sanchalaks and upsanchalaks sustain consumer advantage On the other hand, increased
negotiate a sharing of the ITC Even if one were to go by the reliance on commercial crops
commission amongst themselves. logic that markets themselves can decrease local food security,

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

both through reduced availability Threat to public and most e-Choupal actors spoke
and increased prices. Increased community based systems rather dismissively about such
re-orientation (and dependence) governance systems.
The e-Choupal system not only
of the local economy on the While ICTs can and should
serves as a monopoly agriculture
e-Choupal system can have produce procurement channel, be used to improve market
problematic mid to long term but also a source of agriculture efficiency in rural areas, it
results, which needs to be and development information, must be done in a manner that
carefully assessed, and not left agriculture extension services, promotes competitive markets
to the involved corporate. This and increasingly, community that valorise local enterprise and
is crucial because the local information for upstream actors. other local economic resources,
community has neither any role It thus threatens to overwhelm rather than monopolistic
nor much leverage to influence public and community-based corporate-dependent markets.
the emerging dominant system. systems that traditionally At the same time, ICTs should
With monopolistic control over undertook many of these also be used to strengthen rural
an entire local agricultural activities. In fact, it is a real activities that are best done by
ecology, e-Choupal represents concern that, citing the presence the public sector, rather than
a development model where of e-Choupal kind of corporate being employed to justify its
a transnational corporation systems, many governments will withdrawal. Furthermore, ICT
deploys a captive, unregulated begin to withdraw their presence enabled empowerment of the
ICT network that locks in in these areas. Consequently, local community will enable
a large number of farmers, this raises a number of equity both their active and equal
crowding out the small and and social justice based issues. participation in the market
marginal land-holding farmers. There are some early indications as well as governance and
It thus promotes corporate that this may already be taking development related activities.
dependency of local agriculture place. There is no leverage Telecentre models should
and monoculturisation of agro- that the local community and address this imperative centrally
production systems – issues that local self-governance systems through an engaged involvement
are in fact intrinsic to the choice have over the e-Choupal of communities in running
of development model. system, and during interviews, 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 IT for Change is an India-based NGO working
the Social Science Research Council (SSRC), an independent non-
on information society theory and practice
profit organisation based in New York. The study was commissioned
from the standpoint of equity and social justice.
under the Collaborative Grants in Media and Communications:
Through our research, advocacy and field
Necessary Knowledge for Democratic Public Sphere programme of
SSRC projects, we seek to challenge approaches that
fail to address the structural exclusions in the
3 Panchayat is an administrative unit of the government at the village
level emerging information society. We also propose
alternative models that are participatory
Credits
and equitable. Our work spans a range of
Coordination : Chloé Zollman
development arenas - gender, education,
Design : Varun Dhanda, Krupa Thimmaiah
community media and governance. IT for
Research report : Roshni Neggehalli, Deepa Shankaran
Change is in Special Consultative Status with
Research coordination : Parminder Jeet Singh, Anita Gurumurthy the Economic and Social Council of the United
Editor : Parminder Jeet Singh, Deepika Khatri Nations.
Editorial support : Krittika Vishwanath
Printed by : National Printing Press, Bengaluru

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


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