Council on Energy, Environment and Water Integrated | International | Independent
This case study is a complementary document for the scalability framework. It provides a detailed account of how certain programmes scaled up and sustained in the long run. The anecdotal evidence of the success factors given here forms the basis of the scalability framework. This document gives an overview of each phase’s activities and success factors.
We have identified three phases for the programme, and each consecutive phase depicts either a shift or expansion in solutions, involvement of different stakeholders and a variation in scale. The success factor headings come directly from the scalability framework. Please refer to the framework for theoretical clarity on terminologies.
The core success factors that enable scale, replication, and sustenance are as follows:
ITC is an important player in the agrarian business sector for decades, with networks spanning the country to procure goods from farmers. However, post-liberalisation, they felt the need to compete with other players and also fix the gaps in India’s traditional agrarian goods procurement system, the mandis. ITC’s International Business Division was challenged by the leadership to create a modern, more efficient supply chain and procurement process using information technology, to fix these gaps, and enable a community-driven and community-owned system in rural India while also establishing ITC’s prominence in the sector. Since its inception in 2000, this supply chain has evolved into a platform for farmers providing access to knowledge on best practices in agriculture, health services, insurance, and other agri-extension services. The programme aimed to end rural isolation felt by its farm-level stakeholders and enable them to shift from mere subsistence to profit-making through agriculture. In aiming to improve farmer productivity and procurement for its own benefit, the programme also enabled rural communities to become digitally literate and establish ownership over such networks, as the country entered the 21st century. As the programme evolved, ITC brought in other multinational partners to enable the wider spread of its information technology network. Currently, it aggregates all services onto a wide-reaching digital platform and a mobile phone app.
In 2000, ITC decided to start its pilot with soybean farmers in Khasrod in Madhya Pradesh. They established E-Choupals as a one-way platform by installing and creating their own information technology network. Farmers would physically go to these E-Choupals, run by a member of their own community and access fair market prices for their crops off the Internet, at closing time of each day, and choose to sell to ITC at those rates. This way, they were able to bypass the arbitrary prices set in the mandis. By capacitating farmers, the programme enabled them to connect to the world and solve the information asymmetry that had forced them into a position of low risk-taking ability, low productivity, and alienation from capitalising on the market prices for their output. The programme benefited from cutting out the middlemen at mandis from whom ITC would have to buy the produce, with an insufficient guarantee of quality. The programme engaged government support to bypass the traditional and codified mandi system, without causing destructive disruption to the value chain. Instead, the driving organisation worked to absorb the existing stakeholders, giving them key leadership roles in the programme value chain, as sanchalaks and samyojaks. ITC thus added value to the programme and enabled deeper engagement with the farming community members.
Timeline: 2000–2003
Scale: One million farmers, 2000 E-Choupals, 11,000 villages in Madhya Pradesh, Karnataka, Andhra Pradesh, and Uttar Pradesh
Key Drivers: ITC
Bringing IT solutions to traditional value chains through progressive farmers: The programme drivers had already spent years on the ground due to ITC’s presence in the sector and started the pilots with a thorough and systemic understanding of community needs. They onboarded one influential and progressive farmer in each village where they implemented the pilot. First, a computer was installed in farmer’s house. This stakeholder’s house became the hub for the community of a cluster of villages, upgrading the traditional choupal of villages to an informational technology driven one. The E-Choupal gave the rest of the community access to fair market prices at the closing time of each day, which they could use to sell their produce the next day. This allowed the community to decrease dependence on arbitrary rates quoted in mandis. Each E-Choupal could serve up to 600 farmers.
Investing in high efficiency infrastructure: The programme drivers invested their own funds in creating and maintaining their own information technology network. They started by connecting the E-Choupals to the Internet via phone lines using the technology that was available in 2000. However, to minimise the risk of failure due to poor connectivity, ITC invested in linking them through a VSAT connection, which could serve about 600 farmers in 10 surrounding villages within about a five-kilometre radius. ITC invested between USD 3,000 to USD 6,000 to install each E-Choupal and spent USD 100 a year on the maintenance of each unit.
Create support capacity in programme staff: To aid and support the sanchalaks, ITC maintained a staff of technicians and 15 engineers. For ease of access, the initial E-Choupals were all within 10–15 km of a city, for technicians to visit them twice a month for infrastructure maintenance.
Procurement centres as a physical alternative to mandis: The driving organisation added a crucial physical layer to this digital network, the Choupal Hubs. The samyojaks, former commissioning agents of the mandis, made a living by helping run these hubs. They managed cash payments, paperwork, handling the produce, and providing other such logistical services. After agreeing on a fair market price, the farmer would come to the choupal hub to have their produce weighed and sold. The process was made as transparent and as easy to understand as possible to encourage the retention of potential stakeholders.
Creating community champions: For each cluster of villages, the drivers picked one community member’s home to host the E-Choupal. This member became the programme sanchalak (coordinator). The member would be progressive farmer and usually had a higher level of education than his peers. They would be trained by the ITC staff to facilitate the rest of the community’s access to the network. ITC designed this role akin to a public office, and the sanchalak is obliged to take a public oath to serve the community. Thus the system is rooted in a degree of trust among community members. The sanchalak earns a commission for all E-Choupal transactions they facilitate and also derives value from prestige and trust accorded to him by the community (Rao et al. 2003). ITC mandates that the sanchalaks continue to stay as farmers, so as to stay rooted in the community.
Building farmers’ trust through transparency in produce quality test: The programme recognised the exploitation faced by farmers when getting their produce’s quality tested by laboratories. Thus, the driving organisation only conducted tests that the farmers could see and understand at the Choupal Hubs, so as to determine a fair price.
Encouraging farmers’ participation: To keep sanchalaks engaged and enthusiastic about the programme, the driving identified opportunities to celebrate their achievements and entrepreneurial spirit. For example, they would present sanchalaks with their annual commission cheques in public ceremonies where their earnings could be announced to others. This would also serve to encourage other stakeholders to perform better.
Absorbing existing providers into the value chain: ITC incorporated the commission agent from local mandis into their programme as samyojaks (collaborators). These agents would have lost most of their income as farmers started bypassing the mandi system. Tapping into their availability, the programme employed them to provide logistical services in the absence of rural infrastructure, information on farmer capacities, and operational support at the Choupal Hubs.
Encouraging inventive use of computers beyond E-Choupals: The drivers found that the sanchalak’s families, especially children, also benefited from having a computer at home. They were encouraged to use it for their needs, such as accessing news and exam scores for children. This encouraged computer literacy in the community overall and built trust in the programme.
Setting up the programme as a viable alternative to mandis: The programme engaged with the state governments where they started pilots to secure their support to bypass the mandis. The Agricultural Produce Marketing Act not only codified mandis as the legal route to procuring agricultural produce but also prohibited such procurements outside of them. Through consistent dialogue, and the promise of a modern, efficient system, the programme aroused enthusiasm in the state governments, enabling them to roll out the programme in four states. ITC also decided to continue procuring some produce from mandis and also pay the mandi tax to the mandis near Choupal Hubs, for goods procured through the Hubs.
Clarity on funding options: ITC, being a for-profit company, could absorb the costs of the programme and keep it running.
Bringing suitable change to the enabling environment: ITC created an enabling environment by integrating technology to traditional value chains that facilitated farmers to sell their produce at fair prices.
Enable community ownership: The programme drivers onboarded members of the community and absorbed key players from the mandi system, which built trust of the farmers and encouraged them to use E-Choupals. They also ensured that there was no negative disruption on the field. The sanchalaks and the samyojaks thus became influential members in the community to scale up E-Choupals.
Enable pathways for government support: In this phase, ITC did not collaborate formally with government institutions as they were building a strong proof of concept. They engaged government support to bypass the legally codified mandis through the promise of a reformed, modern system.
Gain clarity on funding options: ITC, being a for-profit company, invested in the E-Choupal programme internally.
The E-Choupals evolved from a one-way platform to a two-way one, and the farm-level stakeholders turned from being just micro-producers into micro-consumers. This was made possible when the existing Choupal Hubs were upgraded to Choupal Saagars, a physical megastore that served a cluster of 40 E-Choupals. The Saagars became the one-stop shop for farmers who would come to sell their produce. They could buy any agricultural input goods, farm machinery, insurance, health services, banking services and fuel, to name a few, from the Saagars.
Timeline: 2000–2008
Scale: 23 Choupal Saagars in Madhya Pradesh, Maharashtra, and Uttar Pradesh, 6,500 E-Choupals, 40,000 villages (ITC 2008).
Key Drivers: ITC
Establishing a larger scale physical infrastructure: The drivers decided to expand the programme design through the newly introduced Choupal Saagars. These structures acted like hypermarkets, with one Saagar serving a cluster of 40 E-Choupals. They became a one-stop shop for fast-moving consumer goods (FMCG), insurance, health services, and agri-extension clinics. Instead of the older, more rudimentary Choupal Hubs of phase one, farmers now came to Saagars to sell their crops and were exposed to a range of goods and services. These goods were both ITC-branded FMCG and those from partner companies. These sales also benefited ITC, which saw them as an avenue for the potential growth of the programme, also benefiting the company.
Encouraging entrepreneurial spirit: The driving organisation upgraded the roles of the sanchalaks and the samyojaks. The sanchalak now became responsible for selling these goods, instead of being a simple facilitator. The samyojak took on the responsibility of managing the inventory at the Saagars and became the middlemen between ITC and the sanchalaks. They would receive the goods from ITC and the partner companies and distribute these to sanchalaks. They also continued in their role as information providers to ITC, aiding decision-making to set up new E-Choupals.
Benefiting farm-level activities: Farm-level stakeholders continued to benefit from closer access to markets and availability of information that they lacked before. Additionally, they benefited from the added services of the Saagars, such as being able to access insurance and health services. Along with better access to markets from phase one, farm-level community members could now access a host of services that they needed for farming activities, such as agricultural inputs (fertilisers, seeds, etc.) insurance, and health services.
Fostering consumer aspiration: Farm-level stakeholders found themselves empowered as customers, being able to access and afford a range of goods and services that recreated an urban shopping environment. Thus, the driving organisation was able to not only meet the needs of these communities but also fulfil their aspirations.
Sanchalaks become point-persons: The sanchalaks developed deep knowledge of the needs and likes of the farm-level stakeholders, who became their customers, and of the market that ITC had created, increasing their importance in the community and in owning the programme.
Ensuring continued support: The programme drivers continued engaging with state governments to show the success and therefore sustenance of the E-Choupal programme. Similar to phase one, the state governments continued to informally support the programme.
Clarity on funding options: ITC benefited from selling agricultural inputs and FMCG, along with other services, all offered by the company, to the farm-level communities.
Bringing suitable changes to the enabling environment through systems approach: By introducing new technologies, ITC was able to scale up the Choupals as they became a one-stop shop for farmers to get information as well as for agriextension services.
Sustained value proposition for the leadership: The leadership at ITC continued to create new opportunities for the E-Choupal programme to scale up by constantly collating information and acting towards the vision of enhanced extension services for farmers.
Enable community ownership: The community stakeholders felt a growing sense of ownership over the programme as they gained access to more benefits and a wider range of services through the Saagars.
Enable pathways for government support: ITC continued to solicit government support, informally, for scaling up the programme and for it’s sustenance.
ITC felt the need to push the scale of the programme by 2008–09. A decline in major crop production during 2008–09 and 2009–10 led to the Madhya Pradesh government imposing stock limits on the amount of crops traders could buy from farmers (India Budget 2009–10). This affected the programme’s capacity to buy and stock agricultural commodities from their stakeholders. This became one of the driving reasons behind the shift to phase three and scaling up E-Choupals to build resilience to such external shocks. The programme drivers decided to do so through three key methods: (1) train their stakeholders to be microentrepreneurs and innovators to extract more value from the programme; (2) create interactive demonstration farms or Choupal Pradarshan Khet; and (3) create an employment exchange platform. These activities served to upskill their stakeholders into profit-making farmers diversified their livelihood opportunities, keeping the sanchalaks and the samyojaks engaged in the programme. ITC positioned itself as a hub, or meeting point, between its farm-level stakeholders and external partners and vendors it brought on in this phase. In this stage, ITC partnered with external parties, such as Nokia for the information technology network, Nunhems, a seed-producing company, and Bayer to assist with best agricultural practices in farms, and to expand the programme. They also brought on board the Central Institute for Medicinal and Aromatic Plants to train farmers on medicinal and aromatic crops.
Timeline: 2009–2019
Scale: 6,100 installations covering over 35,000 villages and serving over 4 million farmers (Business Standard, 2019)
Key Drivers: ITC
Applying a systems approach: To understand the advantages and challenges faced by the programme so far, 35 employees from ITC travelled across the country for four months. These employees understood that the more entrepreneurial a farmer or sanchalak is, the more value they are likely to extract from the programme. This would prevent the risk of them losing interest. This approach allowed the programme drivers to understand the farm-level stakeholders’ mindset personally instead of relying on sanchalaks for all communication. They understood the urgent need for E-Choupals to scale up for improved agricultural techniques and for more sources of livelihood for farm-level stakeholders.
Addressing identified challenges: ITC brought on board an external partner, Erehwon Innovation Consulting, a consulting firm, to build pilot business models to address the challenges they had identified on the ground. The drivers were focused on building on their information technologyreliant model for farmers that would strongly enable E-Choupal to scale up. For example, they established more direct communication with farmers through mobile phones.
Streamlining business activities: The driving organisation decided to de-burden sanchalaks from their role as sellers of FMCG and services. The company now bought all partner products and stocked them in central distribution centres to be distributed to samyojaks. The latter would then distribute them further to retailers. This ensured that transactions were not happening informally between partners, sanchalaks, and samyojaks outside of the programme purview.
Personalised demonstration farms: The drivers wanted to shift their stakeholders from simple subsistence to profit-making farmers. They did so through Choupal Pradarshan Khets, that is, demonstration farms, to showcase improved production and harvesting techniques. The activity was aimed at increasing crop quantity, improving quality, reducing input costs, and diversifying crops. The driving organisation aimed not only to teach farmers new techniques but also to learn from their ground-based expertise.
Employment Exchange Platform: ITC realised the community’s need to diversify livelihoods owing to dwindling and fragmented agricultural landholdings. The programme established a platform, in partnership with job-placement firm Monster.com, to provide farmers with suitable training, career advice, and job opportunities as well from companies looking to hire from rural areas. These platforms were facilitated by the sanchalaks, while ITC and platform partners earned from the ad revenue and transaction fee.
New roles for sanchalaks: The driving organisation understood a growing distance between the sanchalaks and their peers, as the former had mostly become sellers of FMGCs instead of being seen as fellow farmers. So the organisation removed them from the commercial roles and established them as advocates for other farm-level stakeholders. In this phase, sanchalaks took on three new roles. They facilitated credit for community members turned retailers, advocating their trustworthiness and ability to repay loans to ITC. They helped the driving organisation to identify progressive farmers for Khet pilots to best showcase the new techniques to the community. They became the link between companies and job-hunting peers, aiding companies in verifying the identity of job applicants. For each successful placement, they received a commission.
Diversified benefits for community: Community members benefited from a range of new opportunities in this phase. Apart from the E-Choupal services they had availed since phase one, they were exposed to newer farming techniques tailored to their specific needs and locations. Additionally, members who needed other sources of livelihood now had access to urban jobplacement companies such as Monster.com and also the option to receive training and career advice to maximise their chances of employment.
Support for Choupal Pradarshan Khet pilots: ITC continued to engage with the state government for support on the basis of progressive agricultural practices and benefits to farmers. The Madhya Pradhesh government was supportive of the Khet pilot held in the state across two separate plots of land—one six acres and the other 27 acres. Together, these plots showcased and trained farmers in growing 350 crop varieties, such as spices, aromatics, and medicinal, organic, horticultural, and traditional crops. The Madhya Pradesh Khet successfully scaled up to 43,500 hectares. Additionally, under the Agricultural Technology Development Agency (ATMA), ITC and the state undertook a project to train farmers, on-field and in classrooms, in best practices by agricultural experts (ibid).
Knowledge partners: The drivers partnered with government institutions such as the Central Institute for Medicinal and Aromatic Plant, which is affiliated to the Council of Scientific and Industrial Research (CSIR), to help train farmers during the demonstrations.
Adapt the core solution: ITC ensured action learning for the programme as it scaled up, that is, the staff took time to understand the needs of the sanchalaks and brought in appropriate changes to the programme to ensure its continued relevance. One of the changes they introduced was to partner with an external organisation to pilot business models so as to address the challenges they had identified on the ground.
Enable community ownership: The communities found increased value proposition from the threefold expansion of the programme. It brought them clear benefits, agriculturally, socially, and also financially in terms of diverse livelihood opportunities.
Enable pathways for government support: The programme engaged with the state government and various institutions more formally in this phase. They could now converge with the state government’s agricultural needs, through Public-Private Partnerships under ATMA and by collaborating with state-backed scientific bodies.
ITC formally launched E-Choupal 4.0 in August 2019, signalling a shift away from simply physically expanding the E-Choupal network to now aggregating all its services onto a digital platform and creating agristartups. Building on networks created with farm-level communities and external partners for technological services in the previous phases, E-Choupal 4.0 made all its existing services and a host of newer ones available to all farm-level stakeholders in languages other than English to maximise farmer benefits. These services could be personalised and offered on the basis of data collected by farmers in the previous phase. This effort culminated in the ITC app Metamarket for Advanced Agriculture and Rural Services (MAARS).
Timeline: 2009–2019
Scale: 6,100 installations covering over 35,000 villages and serving over 4 million farmers (Business Standard, 2019)
Key Drivers: ITC
Creating an accessible, multilingual digital platform: The driving organisation learnt from their farm-level stakeholders that any and all services would be of most benefit if they were personalised to their context and available in their languages. Keeping this in mind, they started aggregating the existing services and offering a host of services on their digital platform: crop monitoring, crop advisory, and electronic marketing place for farm inputs, remote sensing for addressing crop stress, and rapid quality testing. As the technology was upgraded and access expanded, the programme started experimenting with climate-smart agriculture solutions and how to make them available to stakeholders. The programme rolled out a large-scale pilot to make 900 villages ‘climate-smart’ in the rain-fed areas of Madhya Pradesh, Maharashtra, and Rajasthan using precise data. Meanwhile, another experiment took place in East and West Godavari in Andhra Pradesh to map soil moisture and also understand how to make the technology affordable to farmers (Sharma 2019).
Building a network of FPOs: The programme drivers created a network of farmers producer organisations (FPOs) across villages where they had a presence. This added another layer to their physical presence, with Saagars in towns and FPOs in villages. Farmers could avail services earlier provided by Saagars much closer to home. They also had the choice to sell their produce to the FPOs, the mandis, or to ITC. The FPOs were eventually connected by a super-app called ITC MAARS to provide a better market to stakeholders for agricultural and rural services.
Creating self-governing organisations: The driver-supported FPOs brought services offered by previous phases much closer to farmers. These FPOs operated in villages, whereas the hypermarket-like Saagars operated in towns. Farmlevel stakeholders benefited from being able to choose buyers for their produce.
Co-creating solutions: The farm-level stakeholders, who had been engaged with the programme through previous phases, helped drivers understand that information, data, and services were most effective when shared in languages accessible to them, not just in English and Hindi.
Continued support from previous phases: The programme has seen continued support from state government, through ATMA and/or their Agricultural Departments, not only for E-Choupals and the related physical infrastructure but also for the various experiments it needed to launch and scale E-Choupal 4.0. The driving organisation also engaged with the government to ensure that government schemes under the Agriculture Department become accessible to FPOs and they could avail of government funds.
Adapt the core solution: ITC further improved its services by co-creating the solutions with the community and constantly applying systems approach to understand the problems rooted in ground reality; the development of multilingual digital portals was an outcome of actively monitoring the programme’s impact and evolving the solutions as per community needs.
Enable community ownership: The community co-created some solutions with the driving organisation, which allowed the programme to become a fully digital platform. They saw value in being connected not just a range of services but a nationwide network of programme stakeholders and external parties.
Create and maintain self-governing institutions: The programme continued to formalise community participation through building a network of FPOs to supplement its physical layer of the Choupal Saagars.
Enable pathways for government support: The programme continued collaborating with state governments under their agricultural departments to experiment on the range of pilots needed for this phase and to ensure farmer access to government funds to run the FPOs.
Das, Sandip. “ITC Aggressive on Agri Drive Via Super App MAARS, Targets 1,000-FPO Network by March, ” The Financial Express, January 17, 2023.https://www.financialexpress.com/industry/itc-aggressive-on-agri-drive-via-super-app-maarstargets-1000-fpo-network-by-march/2951480/.
“India Budget: Ministry of Finance: Government of India.” India Budget, Ministry of Finance, Government of India, 2009–10. https://www.indiabudget.gov.in/..
Annamalai, Kuttayan, and Sachin Rao. What works: ITC’s E-CHOUPAL and profitable rural transformation - wri, August 2003. http://pdf.wri.org/dd_echoupal.pdf.
Business Standard. ITC working to strengthen its backend for Next Level e-Choupal Initiative, March 6, 2019. https://www.itcportal.com/media-centre/press-reports-content.aspx?id=2098&type=C.
“Sustainability Report 2008.” https://www.itcportal.com/sustainability/sustainability-report-2008/chairmans-page01.aspx.
Sharma, E. Kumar. “ITC Sees E-Choupal 4.0 Deliver Early Gains; Focus Shifts to Expanding Geographical Footprint.” Business Today, November 25, 2019. https://www.businesstoday.in/latest/corporate/story/itc-sees-e-Choupal-40-deliver-earlygains-focus-shifts-to-expanding-geographical-footprint-239860-2019-11-25.
| ATMA | Agricultural Technology Development Agency |
| CSIR | Council of Scientific and Industrial Research |
| FMCG | fast-moving consumer goods |
| FPO | farmer-producer organisation |
| ITC | Imperial Tobacco Company |
| MAARS | Metamarket for Advanced Agriculture and Rural Services |
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