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E-CHOUPAL -AN ITC INITIATIVE - RURAL TRANSFORMATION PROJECT

TABLE OF CONTENTS
BACKGROUND......................................................................................................................................... 2 VISION AND PLANNING BEHIND THE E-CHOUPALS ................................................................................. 2 RE-ENGINEER, NOT RECONSTRUCT ...................................................................................................... 2 ADDRESS THE WHOLE, NOT JUST ONE PART ........................................................................................ 3 AN IT-DRIVEN SOLUTION...................................................................................................................... 3 MODULARITY OF INVESTMENTS, IN SIZE AND SCOPE ........................................................................... 3 MANAGING BUREAUCRACY ................................................................................................................. 4 CONCEPTUALIZATION OF THE PROJECT .................................................................................................. 4 IDENTIFYING THE PROJECT GOALS ....................................................................................................... 5 THE BUSINESS MODEL ............................................................................................................................. 6 TECHNOLOGY .......................................................................................................................................... 8 CHARACTERISTICS OF THE OPERATING ENVIRONMENT ........................................................................ 8 RISK ASSESSMENT AND MITIGATION .................................................................................................... 10 KEY ELEMENTS OF EMPOWERMENT ..................................................................................................... 10 ISSUES AND LESSONS ............................................................................................................................ 11 CRITICAL SUCCESS FACTORS .................................................................................................................. 11 WINNERS AND LOSERS .......................................................................................................................... 12 CONCLUSION ......................................................................................................................................... 13

PREPARED BY
DR KESHAR SINGH MISS DEEPA SRINIVASAN MR ASOK BABU S

This caseanalyses the e-Choupal initiative for soy. shrimp. ITC has worked in Indian agriculture for decades. create more transparency for farmers. and shrimpaquaculture). it now generates US$150million in revenues annually. while different in detail. are an important oilseed crop that has been exempted from India s Small Scale Industries Act to allow for processing in large. NOT RECONSTRUCT The conventional view of transforming established business systems begins with the failures of thecurrent system and develops means to change it. efforts in other cropping systems (coffee. ITC is one of India s leading private companies. The agricultural system has traditionally been unfair to primaryproducers. and employs 66% of theworkforce. reflect the same general approach. ITC s translation of the tactical and strategic challenges it faced and its social commitmentinto a business model demonstrates a deep understanding of both agrarian systems and modernmanagement. and other croppingsystems in rural India has also created a highly profitable distribution and product design channel for thecompany an e-commerce platform that is also a low-cost fulfilment system focused on the needs ofrural India. Because of the Green Revolution. inefficient landholdings. Some of the guiding management principles are: RE-ENGINEER. Farmers have only an approximate idea of pricetrends and have to accept the price offered them at auctions on the day that they bring their grain to theMandi. The company has initiated an e-Choupal effort that places computers with Internet access in rural farming villages and these e-Choupals serve as both a social gathering place for exchange of information (choupal means gathering place in Hindi) and an e-commerce hub. Yet 90% of the soybeancrop is sold by farmers with small holdings to traders. As a result.government-mandated marketplace. modern facilities. Yet most Indian farmers haveremained quite poor. traders are well positioned to exploit both farmers and buyers through practices thatsustain system-wide inefficiencies. It s International Business Division was created in 1990 as an agricultural trading company.BACKGROUND Agriculture is vital to India. called a Mandi. ITC took a different approach by looking at thesuccesses of the current system and identifying what they could build on. tobacco. with annual revenues of US$2 billion. for example. Through itstobacco business. wheat. It produces 23% of GDP. VISION AND PLANNING BEHIND THE E-CHOUPALS Implementing and managing e-Choupals is a significant departure from commodities trading. wheat. Soybeans. ITC not only retained Page | 2 . India s agricultural productivity has improved to the pointthat it is both self-sufficient and a net exporter of a variety of food grains. who act as purchasing agents for buyers at a local. What beganas an effort to re-engineer the procurement process for soy. and improve their productivity and incomes. The causes include remnants of scarcity-era regulation and an agricultural systembased on small. from research to procurement todistribution. feeds a billion people. The e-Choupal system has also catalysed rural transformation that is helping to alleviate ruralisolation.

Facilitate collaboration between the many parties required to fulfill the spectrum of farmer needs. delivery. Second. These efforts cannot competeagainst the trader s bundled offer. seed. As a result. It should be noted that ITC did not hesitate to install expensive IT infrastructure in places where mostpeople would be wary of visiting overnight. his intimate knowledge of the farmer and village dynamics allow him to accurately assess andmanage risk. rural banks have tried toprovide credit. not just the marketing channel. thus allowing thefarmer an empowered choice of where and when to sell his crop. Thisphilosophy has two benefits.pricing. EChoupal was seen asa medium of delivering critical market information independent of the Mandi. scalability. Functioning as a viable procurement alternative. ADDRESS THE WHOLE. musteventually address a range of needs.pesticides. notjust a part of the system. it recruits and engages members of the rural landscape therebymaking their expertise available to ITC while preventing their expertise from being shared with ITC scompetition. it avoids reinventing the wheel in areas where ITC would not be ableto add value through its presence. A good example of this in action is the role created for the commission agents. and cost. NOT JUST ONE PART The farmers various activities range from procuring inputs to selling produce. IN SIZE AND SCOPE Page | 3 . MODULARITY OF INVESTMENTS. or misuse has been reported among the almost 2. an IT-based solution was recognized as fundamental to optimizingeffectiveness. He is a centralized provider of cash. the trader enjoys two competitive benefits. AN IT-DRIVEN SOLUTION From the conception of the model. First. In the Mandisystem. this goal is related to the commitment to address the whole system. he reduces overall transaction costs by aggregating services. Information technology is 20% of all the effort of ITC s eChoupalbusiness model. Rural development efforts thus far have focused only on individual pieces rather than what theentire community needs. the villagetrader services the spectrum of farmers needs.theefficient providers within the mandi system but also created roles for some inefficient providers. and sales happen simultaneously. Second. The linked transactionsreduce the farmers overall cost in the short term. misappropriation. but is considered the most crucial 20%. thus binding the farmer to an agent. The two goals envisioned for IT are: Delivery of real-time information independent of the transaction. but create a cycle of exploitative dependency in thelong-term.000 e-Choupals. Currently. It is a manifestation of the integrity of rural value systemsthat not a single case of theft. and Mandishave tried to create a better marketing channel. First. and also the only marketing channel. fertilizer. Cooperatives have tried to provide agricultural inputs. therefore. Asa communication mechanism.

prices. But their totalelimination from the value chain would not be prudent for any business model as theymakeup for weak infrastructure. as ITC s competition was also subject to the tax. they are able to extract abnormal profits forthemselves than the value they are adding. ITC was looking for abusiness model that is customer centric but uses existing infrastructure. This incremental control of investment levels along withthe clarity of revenue streams and the social import were critical in getting board approval for theinitiative. and deliver critical value in each leg at very low cost.ITC managed its investments modularly along the scope and scale axes in what it terms rollout-fixit scaleup and pilot-critical mass-saturation. yet mustdisintermediate them from the flow of information and market signals. ITC therefore chose to continue paying the tax rather than risking the relationships withthe government and the Mandis. Answer to thisquestion was found in virtual vertical integration in the value chain. Page | 4 . Apart from this. Since ITC would not be using the Mandiinfrastructure for its procurement. CONCEPTUALIZATION OF THE PROJECT ITC-IBD s top executives had a major brainstorming session. ITC convinced the government that e-Choupals would operate according to the spirit of the Actand thus e-Choupal procurement was in line with its goals. the government offered to waive the mandi tax on the produce procured through the e-Choupal. they faced a fundamental regulatory obstacle. MANAGING BUREAUCRACY When the e-Choupals were conceived. Questions likethe following were pondered upon: What s the best corporate business model for rural India? Does it require a new breed of leaders? What are the challenges that these leaders are facing? Will they have to work within new organizational structures? The answers pointed towards an electronic market with low transaction cost. and would have to incur its own costs with the eChoupalinfrastructure. However. under whose aegis mandis were established. ITC recognized that the tax was a major source of revenue for the government andlocal Mandisand. And many times. There arenumerous intermediaries in the value chain of the commodity business as shown in the Figure 1.But their aggregate cost makes the chain uncompetitive. by blockinginformation flow and market signals. prohibits procurements outside themandi. The Agricultural Produce Marketing Act. Creative use of information technology through e-Choupal have strengthened the basicbusiness by enabling reduction of costs in the supply chain and deliver superior products/services to the customers like real time information on monsoon. A more effective business model must beable to leverage the physical transmission capabilities of these intermediaries. IT also gave the opportunity to build a unique model of ruraldistribution on the same platform. the tax itself was not making ITCuncompetitive. better farmingpractices while it has facilitated the interaction between company and village community.

fertilizer.Initial goals were following: Helps enhance farm productivity by y y y Disseminating latest information on district level weather forecasts forshort & medium terms Best practices in farming (generic as well as specific) Supply of quality inputs (seed. herbicide. pesticides etc.) inthe village itself Helps improve price realization for farm produce by y y y y Making available live data on markets viz. So on the one hand more profits and larger share ofcommodity exports were ensured for the company and on the other hand farmersrealized better prices for their produce and improved the productivity of their farms.FIGURE 1 E-CHOUPAL VALUE CHAIN IDENTIFYING THE PROJECT GOALS The project was initiated with the objective of achieving a win-win situation for bothfarmers and the company. Location / Buyer wise pricesoffered International market prices of relevant agri-commodities Historical & Up-to-date information on supply & demand Expert opinion on expected future price movements Helps minimize transaction costs in marketing farm produce by y y Buying output at the farmers doorstep Through transparent pricing & weight management practices Page | 5 .

A local farmer acting as a sanchalak (coordinator) runs the village e-Choupal. ITC expects to leverage the profit-making power of the small-scale entrepreneur. ITC has plans to saturate the sector in which it works with e-Choupals. including risk-taking ability and the willingness to trysomething new. The sanchalak is selected to provide this vital component in ITC s system. into the system as the provider of logistical support. The company expects each e-Choupal to serve about 10 villageswithin a five kilometre radius. Andhra Pradesh. Today its network reaches more than a million farmers in nearly 11. irrespective of thestrength of the contract. the Indian farmer has been betrayed by individuals and institutions. the one inKhasrod services about 500-700 farmers in 10 villages. and shrimp. such that a farmer has to travel nomore than five kilometres to reach one. Karnataka. Successful sanchalaksusually have a number of common characteristics. ITC projectsthe role as a public office: hence the title sanchalak. and a public oath-taking ceremony where thesanchalak takes an oath to serve the farming community through the e-Choupal. The average usage is about 600 farmers per e-Choupal in the soy cropping area. is the sanchalak. ITC need not invest in building and securing a physical infrastructure such as a kiosk for housing thee-Choupal computer.000villages through 2.000farmers in 10 villages. a profitable business for themselves. E-Choupals serve both as a social gatheringplace for exchange of information (choupal means traditional village gathering place in Hindi) and an ecommercehub. The critical element of the e-Choupal system. Of the e-Choupals in Madhya Pradesh. Sanchalaks indicate three equally-weighted motivations for assuming their role: a means to help theircommunity. another e-Choupal in Dahod services 5. and a means of getting access to a functional computer. Trust is the mostvaluable commodity in rural India.THE BUSINESS MODEL The model is centered on a network of e-Choupals. ITC channels virtually all its communication through thelocal sanchalak.000 e-Choupals in four states (Madhya Pradesh. and the key to managing the geographical and culturalbreadth of ITC s network. No transaction will happen without trust. and the network is expanding rapidly. and UttarPradesh). for this would compromise the trust that theycommand.with fewer in wheat. Page | 6 . ITC also incorporate a local commission agent. The sanchalaks receive a commission for every transaction processed through the e-Choupal and alsobenefit from increased social status that accompanies the position a significant advantage in rural Indianlife. Recruiting a local farmer from the community for this role serves several purposes: For generations. information centres equipped with a computerconnected to the Internet.known as the samyojak (collaborator). The sanchalak is trained in computer operation and can act as a familiar and approachable humaninterface for the often illiterate farmers and other villagers. To help ensure that sanchalaks serve their communities and not just themselves. ITC insists that sanchalaks should not give up farming. located in rural farming villages. coffee. ambition. and thecomputer usually is located in the sanchalak s home. and the aspiration of earning additional income through the e-Choupal.

Selecting and training the sanchalaks is just the first step. hislong-term interest lay in cooperating with an international company. ITC employs a variety of motivation techniques toencourage sales. handling of mandi paperwork for ITC procurement. Most do not have retail experience and maylack motivation to actively promote ITC products.Sanchalaks are usually of median wealth and status in their communities. and who is seen as acceptable in the villages and might thus make a good sanchalak. by providing information and market signals on trading transactions to the eChoupalsystem. Nonetheless. One technique is to hold a ceremony where sanchalaks are presented with their annualcommission checks and public announcements of earnings are made. ITC uses agents as providers of essential services. and supports market transactions on line. Second. The zeal toperform sometimes leads to territorial disputes. Forthe sale of products through e-Choupal. and arepart of an extended family large enough so that they can find time to service the e-Choupal. for electricity and phone-line charges. why do agents agree to cooperate with ITC? First. as well as quality inspection of crops. the company offers significantcommissions for samyojak services. In effect. the latter of which are gradually declining as ITCreplaces phone-based Internet connections with a VSAT system. not as principals in a tradingtransaction. ITC isstrongly committed to involving samyojaks in the on-going operation of the e-Choupal system. another agent will gain the promised e-Choupal revenues. One samyojak reported thathe saw globalization as an irresistible trend. able to read and write. lower transaction costs) to the farmer right at his doorstep Page | 7 . but ITC does not interfere in their resolution because itencourages sanchalaks to better serve their customer-base. what their financialsituation is. and although he saw loss of revenue in the short-term. and as licensedprincipals for the retail transactions of the e-Choupal. It transmits Information (weather. what kind of families they have. role is played by the samyojaks. Since the e-Choupal system by-passes the agent-controlled mandis and has considerably reducedcommission income. Finally. prices. the company has made it clearthat they will continue to buy produce through the mandis. or cooperating commission agents. It transfers Knowledge (farm management.the functions of the e-Choupal Web site. but still important. A secondary. news). Samyojaks earn income from ITC by providing logistical services that substitute for the lack of ruralinfrastructure. the agents are fragmented and fear that if they do not agreeto work with ITC. the sanchalaks receive product training directly from themanufacturer with ITC involving itself only in product design and facilitation. They play an especially important role in the initial stages of setting up the eChoupals. between US$60 and US$160 per year. bagging and labour inremote ITC procurement hubs. They receive education on basic computer usage.because they know which farmers grow soya. their rolerequires considerable entrepreneurial initiative and entails some operational costs. basic business skills. Stories how sanchalaks spent pastcommissions serve to demonstrate the income potential and spurs non-performers to work. E-Choupal is an ICT platform that facilitates flow of information and knowledge. allowingthem revenue streams through providing services such as management of cash. risk management) It facilitates sales of Farm Inputs (screened for quality) and It offers the choice of an alternative Output-marketing channel (convenience. Sanchalaks undergo training at the nearest ITC plant.

ITC plans to install specially designed UPS units that remain effective between90V and 300V. TECHNOLOGY CHARACTERISTICS OF THE OPERATING ENVIRONMENT Understanding the constraints imposed by the physical and social environment in e-Choupals operate isnecessary to provide the context for understanding the system design. the sanchalak can use the system at least twice a day in the morning to check the prevailingmandi prices. As power isusually available for only a few hours a day and at on a sporadic schedule. With the reliability of a batterybackup. As a result of the erratic power supply. The second problem with power is quality. Access to information in a timely manner iscritical to the success of the business model. the erstwhile Commission Agents) bringing the best-inclass in information. buyersalong with information and service providers. Phase imbalances. thus. In order to control voltage spikes. have been addressed through the use of isolationtransformers to correct neutral voltages. Toovercome this problem. fuses are susceptible to being blown. While the batterybackup addresses the power supply issue. OVERCOMING POWER CONSTRAINTS Power availability in rural India is unreliable and the quality of power is sub-standard. E-choupal is. This has caused ITC to explore other powersources and ultimately ITC decided to use solar battery chargers. Voltage fluctuations are endemic. Page | 8 .It is an interlocking network of partnerships (ITC + Met Department + Universities + Input COs + Samyojaks. insufficient line power during the day poses the challenge ofnot having enough power to charge the backup battery. ITC has overcome the problem of local power supply byproviding a battery-based UPS (uninterrupted power supply) backup. distributed transaction platform that brings together sellers. E-choupal is a model with a number ofnon-conventional characteristics namely: customer centric capable of being used for many commodities and multiple transactions easily scalable once it is verified uses local talent and local people and develops local leaders can be extended to local as well as global procurers stimulates local entrepreneurs to extend their innovativeness uses all the existing institutions and legal frameworks and Many others can join the market as transaction time is low. the e-Choupal computercannot always be accessed when information is needed. The UPS unit is the mostaffected component. knowledge and inputs. and again in the evening to check the rate ITC is offering the next day. which lead to damage of equipment. One full day of sunlight is enough tocharge the battery for 70 to 80 minutes of computer usage. they have introduced spike suppressors and filters.

how the information would need to be presented (graphics or text). The turnaround time forfixing problems is often measured in days.Currently. Thepopulation relies on two-wheeled bicycles and motorbikes and bullock carts as the main means oftransportation. and how often eachpage would need to be refreshed. CUSTOMER BASE Before the arrival of e-Choupal. public transportation accessto many of the villages is infrequent. most villagers had never seen a computer. phones cease to function. When power is lost. ITC realized the importance ofappropriate user interfaces. Forthese. thereis no local support staff to maintain or troubleshoot telephone exchanges. Page | 9 . Overhead telephone lines are exposed to theelements and run alongside high voltage power lines which can cause transmission quality problems. Telephone exchanges are subject to sporadic powersupply and have limited battery backup. The main focus of these meetings was to determine what information farmerswanted to see. They organized meetings and focus groups of farmers to gather informationabout potential user groups. Connecting the Last Mile. The feedback that was collected from these focus groups was used inthe design of the functionality and user interface of the application. As such. The following innovations in technology were envisaged and these became the major elements of the ICT platform: Managing the vagaries of local power availability. as the Internet is the primary backbone of e-choupal operated through local public telecom infrastructure or VSAT/Wireless connectivity solutions and Smart card technology to uniquely identify a choupal user and offer personalized content delivery based on the preferences of the user. not hours. limiting vehicle access.TRANSPORTATION Most e-Choupal villages lack proper roads. Providing systemsupport and maintenance requires the technician to travel from outside areas to visit the eChoupal. TELECOM INFRASTRUCTURE Telecommunication infrastructure in villages is poor. and other reasons ITC initially placed e-Choupals in villages that are within a ten to fifteenkilometre radius of a city. more of non-availability. In addition. through UPS and renewable power sources User interfaces in the local language. village telecommunication infrastructure is designed to carry voice traffic only andtransmission speed is so slow that it renders Internet access impractical. The support team at the mainexchange typically is responsible for eight to ten villages and is short-staffed. and as far as possible are iconic and intuitive to support first-time computer users. Some villages are served only once or twice a day by rural taxis. Moving equipment into and out of the villages is not an easy task.

Thesanchalak who operates the computer is also a farmer selected from the village itself. and weather information also contribute to theempowerment of the farmer. soil testing.quality measurement is more open as results are immediately available to farmers. Historical data and figureson supply. thereby increasing their bargaining power. The scope of the operation: the diversity of activities required of every operative and the speed of expansion create real threats to efficient management. Page | 10 . and get inputs on soiltesting. best farming practices. giving the farmers a fair chance to choose where to sell their produce togain a better price. KEY ELEMENTS OF EMPOWERMENT INFORMATION Access to information through e-choupal has reduced the dependence of the farmers onthe traditional agricultural intermediaries. and expert advice from the system. INCLUSION/PARTICIPATION The e-choupal model involved farmers in the design phase of the project. The sanchalaks are ITC s partners in the community. unlike the mandi system. It has also enabled them to align theiragricultural output with market demand. ACCOUNTABILITY The e-choupal system considerably reduced transaction costs for the farmers. virus testing. Theweighing techniques under the system are accurate and transparent. and farmers are paidin proportion to the quantity of their produce. there is a threat of unionization and rent extraction.farmers have also contributed to the content on the Web to ensure user-friendliness.Farmers actively access information for crop prices in mandis. In some cases. information on farming practicesand techniques. and as their power and numbers increase. expert opinion on future price movements. In addition. E-Choupals enable transparent listing of various mandi prices. LOCAL ORGANIZATIONAL CAPACITY This initiative has created an organization at the local level that is transparent andaccountable in its operations.RISK ASSESSMENT AND MITIGATION ITC identified the following risks as it designed the business model: Radical shifts in computing access will break community-based business models.

Several e-Choupals use backup batteriesrecharged with solar panels. ITC had toovercome these challenges. Rural India faces the problems of infrastructure bottlenecks such as outdated telephoneexchanges. Some of theelements that helped the e-choupal to work successfully are discussed below: COMPREHENSIVE KNOWLEDGE OF RURAL MARKETS Rural markets are botheconomic and social networks and there is a strong connection between theoperation of social and economic transactions.Another challenge is to build personalized content. Avideo showing farmers using the kiosks has helped speed acceptance and adoption of thetechnology among other farmers. but no direct resistance. while others have allowed specific exemptions for such new business models. Understanding the operations isvital before the systems are conceptualized. The Agricultural Produce MarketingCommittee Act (APMC Act) prohibits the purchase of specified commodities (includingseveral that ITC deals in) from any source other than government-designated mandis. there was initial hesitation bythe farmers. and unreliable Internet connectivity. frequent electricity outage.ITC has overcome this challenge by convincing the political and bureaucratic leadershipof various state governments that the spirit of the act (to benefit the farmers) is betterserved through e-Choupals. as much aspossible helped the network to get the acceptance closely. some states have amended the act (such as UttarPradesh).VSAT links were established in other areas. Use of local population. As a result. the basic training plannedfor two days was accomplished in just four hours by the very first batch of sanchalaks. When the e-choupal concept was first proposed. ITC also had to surmount regulatory barriers. CRITICAL SUCCESS FACTORS The e-Choupal experience highlights that ICT platforms can provide rural connectivityand e-commerce support.ISSUES AND LESSONS CHALLENGES Familiarizing first-time users in remote areas of rural India with the Internet presented achallenge. catering to individuals with a widerange of income levels and information needs. Farmers learned quickly. Page | 11 . It managed to get some telephone exchanges upgraded. DESIGNING A WIN-WIN TRANSACTION MODEL The success of e-choupal comesfrom the condition in which both the farmer and the processor share the benefitscoming out of the elimination of middle men and due to timely informationavailability. These platforms have enormous potential provided they areconceptualized for the specific needs of the community and business.

SELECTION OF SANCHALAK Both the selection of Sanchalak and the acceptance ofSanchalak by the community are very critical for the success of e-choupal. Page | 12 .  Mandi labourers. lost income and jobs is directlyconnected to the overall increase in efficiency in the e-Choupal system. For example. Indeed.LEVERAGING THE LOGISTICS CHANNELS The existing logistics of the rural marketsare leveraged but they are not able to exploit the information asymmetry (unlikethat in a conventional market). The workers in the mandi who weighed and bagged produce have been severelyimpacted by the drop in volume. The farmer and Sanchalak are free to use the e-choupal and developnew uses. Trainingand sensitizing him for the crucial role has been the main reason for theacceptance of the Sanchalak by the farmers. In the platform terminology Sanchalak is the interface formaintaining the platform. For the farmer the Sanchalak is the e-choupal. Firstly. E-Choupal evolved a simpleinterfacing arrangement that a farmer can understand. In that sense e-choupal uses the local institutionsbut eliminates the information asymmetry that they used previously. ITCused a trial and error method for developing the procedure for selectingSanchalaks. Despite ITC s best efforts to maintain mandi volumes and compensatecommission agents for lost income. some 28 tulavatis and 300labourers have been affected. thus. EVOLVING AN APPROPRIATE USER INTERFACE Technology interface used in ruralareas have to be very simple. and a representative of farmingcommunity. E-choupal unleashes the creative spirit in the rural India. WINNERS AND LOSERS Not everyone has benefited from the introduction of e-Choupals. one has to understand the userpattern and secondly. there is little doubt that on the whole they have lower incomes asa result of the introduction of e-Choupals. Some of the players in the Mandisystem have suffered loss of revenue. acts as thecoordinator of the knowledge community. E-choupal concept helped in the creation of skilled personnel in rural communities. Interface has to be tried for rural settings and onlyafter its validation it has to be used. Sanchalak. In the Sonkach mandi. BOTTOM-UP MODEL FOR ENTREPRENEURSHIP E-Choupal encourages enormousamount of creativity at the local level along with local entrepreneurshipstimulation. They include:  Commission agents. Thishas a positive spillover effect. tested and validated.farmers do not understand the concept of insurance. for example. it has to be tried. ITC s long-term vision is to employ many of these people in the hubs inmuch the same functions as they perform in the mandi.

The result of this is that regional Mandis have lost taxes that contribute to maintaining their infrastructure. y y y y E-choupal has been heralded as the attempt at making ICT platforms enhance themarket access. Page | 13 . CONCLUSION The study of e-choupal helps in identifying the factors that contributed to thesuccess of the ICT platform in many states: y E-choupal has been one of the best ICT application platforms that has beenscaled replicated and sustained. ITC still pays mandi tax for all the crops procured through e-Choupals but itnow pays the tax to the mandi nearest to the procurement center. This revenue has now been diverted to shops near the ITC hubs. Sanchalaks have been able to induce the feeling ofinvolvement.  Competing processors. The model of validating and then rolling it out has been aneffective way of implementing a new business model. The ability of the Choupals to deal with manyinputs provides for economies of scope.  Some mandi operations. E-choupal was customized and then validated and then expanded to theoperational phase. The efficiency pressure imposed by e. As a result. Intensive training and distributed leadership concept facilitated the acceptance ofthe platform concept.Choupal has spurred industry consolidation. By embarking on this initiative. E-choupal has provided economic benefits even for the small farmers. It has been validated. ITC had the vision to conceptualizeand implement this procurement cum marketing platform. Everybeneficiary gets benefit and the equitable benefits make the adoption veryrapid. This. Echoupal has found acceptance in all three businesses theyhave ventured into. The empowerment of people through local action andtraining reduces the disparities. It is a low cost/multi businessmodel operated by the farmer representative. by eliminating the use of middlemen. This participative style helped ICT to build trust at the local level.Trust is essential in sustaining relationships at the community level. can be considered a diversion of revenue rather than elimination. taxes are being divertedfrom several mandis to the few mandis near procurement hubs. When farmers sold produce in the mandi. This is due to the fact that it was specificallydesigned for that specific business. ITC has shownthat ICT platforms can benefit even if the marginal farmers. The Sanchalaks are selected carefully and they have been able to work as nonpartisancoordinators. scaled andsustained for many businesses by ITC. the soya crushing industry sufferedfrom severe overcapacity (half of all capacity was excess). they would also make a variety ofpurchases at local bazaars.however. Even before the advent of the e-Choupal. Bazaars near the mandi.