Keywords

Social Business, E-Choupal, Social Innovation, Corporate Social Responsibility, Rural Development.

Introduction

Indian Tobacco Company Limited (ITC), one of the biggest agribusiness and consumer products companies in India, introduced e-Choupal in the year 2000. The initiative has been giving internet access to farmers in remote parts of the nation, bringing about profitable rural transformation (Annamalai and Rao, 2003). After a difficult commute, farmers, who are sometimes impoverished and illiterate, are compelled to function as "price-takers" at the mandi (marketplace). Even more disturbing is the fact that they have limited access to agricultural education and training. Information & Communication Technologies (ICTs) have a significant role in providing information services to the farmers for proper decision making (Vishwatej et al., 2022). Using digital technology in rural agricultural areas, the e-Choupal has transformed the outmoded soybean export distribution network. It offers farmers with a dependable platform for market analysis, dealings that are above board, and unfettered information flow, which benefit all parties involved. It involves acquaintance with the relevant technology, in line with the respective social settings and individual actors' objectives. The e-Choupal model has been specifically designed to tackle the challenges posed by the unique features of Indian agriculture, characterized by fragmented farms, weak infrastructure and the involvement of numerous intermediaries, who block critical market information from passing to the farmers and use that information for getting a big margin for themselves (Bowonder et al, 2002). The e-choupal system is advantageous to all the participants in the value chain, be it farmers, intermediaries or the company itself (Bhandari, 2022). Anupindi and Sivakumar (2007) explain how the ITC Group's e-Choupal infrastructure in India has been designed as a business platform through which a host of products and services are provided, linking the local farmer to global markets. Cherupelly (2022) emphasizes on the role of ICTs in contemporary agricultural context in India.

Web 2.0 has already enabled farmers to make more educated agricultural decisions than ever before, and a quiet digital revolution is already redefining their way of life. Many of the issues plaguing Indian agriculture, which is characterized by tiny farms, inadequate infrastructure, and exploitative intermediaries, are resolved by e-Choupal. In fact, it is one of the largest Internet-based programmes of its sort that are now operational in rural India. In order to provide farmers with the most current expertise in marketing and agriculture, the programme installs Internet-connected PCs in underserved regions. A Sanchalak (literally meaning operator) run e-Choupal's one-of-a-kind Internet kiosks and act as a conduit between farmers and the centres wherein their products are marketed. ITC designed a hardware solution for the installation of e-Choupal that includes solar-powered batteries to provide backup power for desktop PCs. It was requested that local telephone exchanges be improved in order to enable data transmission. Farmers are permitted to do commerce on the location through registered Sanchalaks. Kim et al (2007) analyzed the role of opinion leadership of these Sanchalaks in farmers’ communication networks. A Sanchalak is a village leader, an ITC-trained farmer who assists other farmers in using the company's specialised agricultural portal. Through this platform, farmers may learn about vital themes like soil health, pricing (those supplied by ITC as well as those in the local mandis), weather, inputs geared towards high quality, and marketplaces. The e-Choupals, which get their name from the Hindi term for "gathering place" (a "choupal"), are more than simply internet cafés. They are often within five kilometres or within walking distance. The farmer may avoid a journey to the nearest government-mandated mandi by delivering a sample of his product to the e-Choupal. The Sanchalak uses a moisture meter and other devices to make an informed assessment about the quality of the crop.

Before selling, the farmer may check the ITC price and prices at neighbouring mandis online. The Sanchalak gives him a note including his particulars (name, village, quality evaluation data, estimated total, and prospective selling price in case he decides to sell his product to the ITC gateway). The farmer travels 30 kilometres to ‘Choupal Sagar’, the nearest ITC rural services facility, to deliver the message and his goods. Here, qualified specialists do further testing. With there being roughly 6,100 e-Choupals already in place, the effort has, by and by, been extended to affect over 40,000 communities and over four million farmers.

What Propels the ITC e-Choupal?

Farmers in India have been exploited for centuries. Before their products may be offered at the government market, a lengthy sequence of activities must transpire. Numerous intermediaries are involved, and their commissions reduce farmers' revenue. Moreover, they will not be compensated until their crops are sold. The waiting time keeps them from going forward, which is a major setback for them. Another issue is that Indian farmers are reluctant to spend their revenues in productive ventures. This is due to the fact that they are less risk-taking. Due to their incapacity to take risks, they spend little and create less, laying the groundwork for a careless approach to the market. This lackluster strategy results in low value addition, which limits the farmer's income. If no external forces interfere, the cycle will continue forever. ITC offered a remedy to the growing suicide rate and deteriorating rural economy by paying farmers on time and encouraged them to invest in agricultural supplies such as fertilizer. This enabled them to overcome adverse circumstances by breaking the trend of low profitability.

Soybean quality control is an important aspect of ITC's capacity to deliver disruptive technologies to the rural agro-ecosystem. ITC is a well-known distributor that specializes in the international commerce of soybeans. The standard methods for enhancing the quality of soybeans had failed; therefore scientific approaches were employed instead. Farmers were instructed by ITC e-Choupal on how to enhance crop quality by fine-tuning their sowing techniques.

Innovations as Building Blocks

With the advent of e-Choupal in June of 2000, an attempt was made to simplify the distribution chain. e-Choupal acts as a link between merchants and producers. It was also intended to function as a hub for online shopping, information exchange, and social engagement. Instead of one to two days being spent finalizing a contract at the mandi, the ITC facility requires just three hours. e-Choupal offers a centralized location where rural residents may fulfill all their needs. The e-Choupal model has required that ITC make significant investments to create and maintain its own IT network in rural India (Anupindi, 2003). Farmers have benefited greatly from e-Choupal's provision of workshops, weather information, and the transportation of high-quality agricultural supplies. Long-term research indicates that the e-Choupal demonstration field programme has led to an improvement in crop yields. Choupal Sagars, an important component of the e-Choupal network, provide the same amenities as a regular grocery store to consumers in rural places. In addition to a fully automated produce weighbridge, gasoline pumps, and a retail store equipped with FMCG and industrial supplies, this station provides every convenience a customer may want. Local farmers use Choupal Sagars as both markets and resource centres that provide financial counseling, agricultural knowledge and banking services. In several regions, these hypermarkets are gradually replacing traditional kiranas (small stores). Due to e-Choupal, ITC now has access to a potent advertising weapon. ITC awards "bonus points" to products that transcend the minimal quality level substantially. There are ITC products available for purchase with these points. In addition, ITC has been utilising e-Choupal to promote third-party consumer products.

E-Choupal’s Marketing of Financial Items

E-Choupal established a financial product marketing strategy for farmers and their families in which ITC offers to sell loans via their network besides building a comprehensive retail marketplace for rural residents in the form of Choupal Sagars. Thanks to the Kisan Credit Card, third-party loans, and channel credit, farmers were able to create a better infrastructure, which lowered expenses and improved the quality of their crops. Also incorporated were weather insurance, life insurance, pensions and disability incomes so that farmers and their families could receive help in the event of a disaster.

Chaupal Sagar's launch

After the success of the e-Choupal, the company created Choupal Sagar, a collection and storage facility as well as a rural hypermarket offering many services under one roof. To attract the rural farming population, a rural mall was constructed in the same warehouse where the ITC's e-Choupal-purchased produce was being housed. The first rural mall therein was constructed in August 2004 on an eight-acre property with 7,000 square feet of store space in Rafiqganj, Madhya Pradesh, around four kilometres from Sehore town. What began as a trial to use IT tools to assist farmers in determining the best price for their produce has morphed into a shopping concept that offers a wide range of services under one roof, including the purchase and sale of quality goods for farm and household spending, additional services such as soil testing, banking, insurance from ICICI Prudential and LIC, as well as medical facilities and restaurants. Choupal Sagar was effective in becoming a framework that supported rural India by providing a range of goods, services, and most significantly, information access. Choupal Sagar's success was mostly because the rural Indian market for agro-extension services and retail commerce in the form of rural malls and supermarkets was far more promising than the urban market. Over fifty per cent of India's gross domestic product originated in the country's rural regions. Rural India has massive potential due to the increasing rate of disposable income. Owing to the much quicker expansion of rural markets compared to urban markets, the attention has shifted to the rural retailing sector. By building the mall near the warehouse, ITC intended to capitalise on the growers' footfall. Thus, anytime a Sanchalak or farmer went to the storehouse to sell their goods, they also had the opportunity to make a purchase with the cash they had just acquired. ITC saw that the growers had just received funds, that they would spend them anyhow, and that they possessed a vehicle that could be used to convey purchased items. Thus, ITC was able to establish a two-way flow of services and commodities into rural economies.

Benefits of E-Choupal

Since E-Choupal has its own marketing capabilities, it is well-suited for procuring items from local farmers. Due to the digital augmentation, the e-Choupal is accessible to everybody, regardless of physical location. Conventional markets, which are inherently characterised by discrepancies in knowledge, are fundamentally flawed due to a lack of transparency. Meanwhile, e-Choupal facilitates transparent and trustworthy transactions. If middlemen are eliminated, more money may reach individuals at the base of the value chain. e-Choupal's prime selling point is its ability to link major producers with small producers and small consumers with large users, greatly reducing the need for a broker- and middleman-based trading system. The Internet has become a vital component of contemporary civilisation due to its low cost and broad usage. Since the Indian market lacks enough physical, social, and institutional infrastructure, there continues to be a need for intermediaries who contribute value at each stage of the supply chain.
Enter e-Choupal: The exploitative function of middlemen in conventional marketplaces has been greatly replaced by that of a local farmer who acts as a Sanchalak (coordinator) and operates the e-Choupal from his house. And then, there is a local commission agent called a Samyojak (collaborator) to give logistical help. e-Choupal is a concept that demonstrates how a global organisation can assist farmers and rural communities by recognising their market potential and expanding agricultural production to everyone's benefit. As e-Choupal increased agricultural productivity while achieving both goals, it showed they are compatible. The e-Choupal idea demonstrates the importance of Information and Communication Technology in promoting transparency, increased information availability, and rural change.

The Effects of E-Choupal on Society

The E-Choupal paradigm, which has been shown to be successful, is used to link individuals in remote regions to the rest of the world. e-Choupal is transforming the social fabric in several ways, triggering an increase in income and a familiarity with the professional transaction. Agriculture, food quality and human life stand to gain from the closing of a knowledge gap, the development of cheaper, smarter agricultural inputs and the role of farmers as innovators. e-Choupal facilitates linkage encompassing a large network of farmers via the use of technology, and the Sanchalak ensures that essential procedures are transported from the computer to the field. Since it gives precise predictions for particular districts, the weather section of the e-Choupal website is often visited by a large number of individuals. The weather predictions provided by e-Choupal include task-specific guidance for the whole agricultural production process. Nearly fifty percent of weather-related losses have reportedly been avoided as a direct result of precise precipitation predictions. On the website, one may find scientifically-based techniques organized according to the various plants. In addition to specialists replying to community emails, frequently asked questions (FAQs) are addressed. Besides, specialized quality solutions are provided. Following the sale of a crop, ITC sends a sample to a laboratory for analysis. With relevant statistics in hand, growers are provided with nuanced advice for enhancing crop quality and yield. Inputs such as pesticides and fertilisers are used in conjunction with the kind of soil and crop. Consequently, ITC makes suggestions based on soil test findings. Dangi and Singh (2010) looked at the cost-benefit factor of the e-choupal model. ITC's net procurement costs are reduced by approximately 2.5% as a result of not having to compensate the mandi merchants, who serve as its buying agents, with a commission and transport costs. The e-Choupal connects farmers to a global network of information, business models, and funding opportunities, all of which foster the growth of novel concepts and provide a path to their realisation.

ITC's Fulfilment of its Corporate Social Responsibility (CSR) through E-Choupal

Although reams have been written about e-Choupal's positive social impact, the enterprise was initially conceived with a purely economic objective in mind: to create farmer communities in rural areas to assist the company in sourcing reliable supplies of farm goods for its expanding food and agriculture sector. Again, ITC benefited greatly on the supply side as a result of the reduction of non-value added expenditures, which reduced the net cost of procurement. Mukerji (2020) discusses and analyzes the dual role of e-choupal as an altruistic venture as well as a strategic imperative for ITC. She points out that the business imperative inherent in the initiative and its economic advantages for ITC have been overlooked by the popular narrative about ITC’s e-choupal being an almost philanthropist program. Farhoomand (2008) also visualizes the strategic advantage of e-choupal, primarily seen as a CSR initiative, for ITC. It is said that ITC has always been aware of and responsive to the farmer's concerns. e-Choupal is a well-thought-out mix of programmes that involve supply chain management and community resource mobilization. ITC has successfully been safeguarding the source of the supply and improving the supply's overall quality by aiding farmers in identifying and monitoring their inputs, encouraging them to adopt scientific agricultural techniques, and paying them more for higher-quality products. In addition to maize, barley, sorghum, and pulses, items such as wheat, rye and oats may now be procured, and the sourcing cycle now extends to almost the whole year.

ITC is now trying to ease the promotion and selling of third-party goods, the conduct of rural market research, the dissemination of health advisories, and the deployment of e-governance in the social sector because of its investment in the e-Choupal platform. e-Choupal enables farmers to circumvent intermediaries to an extent and sell their produce directly to ITC at a premium price. Not only has e-Choupal alleviated ITC's worries about the agricultural supply chain, but it has also improved the quality of life for Indian farmers and given them more power in their communities. ITC first saw e-Choupal as a solution to their supply chain challenges, but it ultimately noticed that it was also a terrific opportunity for the firm to make a positive social impact while still generating money. ITC has broadened the scope of e-Choupal to include health care, education and information, after learning about the difficulties rural Indians with limited incomes experience. It has teamed up with other businesses, such as producers of Fast-Moving Consumer Products and banking institutions, to bring previously unavailable goods and services to rural residents. ITC has continued to reap the advantages of efficient supply and value chains as e-Choupal has developed into a vehicle for equitable development, poverty reduction and decreased rural marginalisation.

An Umbrella of Overarching Development Programmes

Under e-Choupal, ITC has undertaken a range of rural and agricultural development initiatives.

e-Choupal's Integrated Watershed Development Programme

The lack of irrigation infrastructure is a significant problem for our agriculture sector. Inability to properly irrigate scattered, far-flung fields exacerbates the problem. It is a costly proposition, which is why India's small farmers do not pursue it. Under e-Choupal's Integrated Watershed Development Programme, over 18,985 water harvesting facilities have been constructed in response to these concerns. The programme is driven by a clear desire to deliver water to drought-prone regions. This effort has assisted approximately 3,31,461 individuals in nine states.

In addition, the ITC e-Choupal has supported owners of barren wastelands in transforming their holdings into pulpwood estates. It also guarantees economic prosperity built on the crops. However, farmers are not required to sell their crop to the enterprise if doing so would benefit the paper operations of the company. They have the freedom to choose as to where they conduct business. This project, which has in its ambit more than 8.46 million acres of land, has created employment opportunities for more than 147 million people.

Livestock Development under E-Choupal

In the rural regions, almost every house has cattle. This creates a fantastic opportunity for financial advantage. However, the little income from these animals poses a significant concern. Existing efforts under e-Choupal have resulted in both qualitative and quantitative enhancements to milk production. To attain this objective, artificial insemination is used. This technique facilitates the production of high-quality milk through the breeding of hybrid progeny. The chance to create milk-selling cooperatives is also available. This programme has resulted in creation of 151 cattle development facilities, artificial insemination of 25.5 million cattle, delivery of 8.69 million calves, and veterinary care of 10.71 million more animals.

Women's Empowerment Programme of E-Choupal

Sadly, most women in Rural India still come from low-income or no-income homes. ITC has designed a programme to assist women in pursuing occupations outside of agriculture as part of its objective to empower them. ITC started its Women's Empowerment Programme in regions with major agri-procurement centres and industrial sectors, recognising that more money in the hands of women implies more money for health care and education. This initiative assists women in forming self-help organisations and fosters their pursuit of economic independence. Due to the programme, about 77,300 rural women now have stable work prospects.

E-Choupal version 4.0

Version 4.0 of e-Choupal, which was unveiled in 2020, switched the emphasis from reorganising agricultural value chains for increasing their efficiency for their many stakeholders to upping the digital component of ecosystems. The digital quotient has climbed from the earlier 15% to nearly 40% now. A larger digital footprint allows for more real-time integration and distribution. Technology is already being used to give comprehensive solutions for weather forecasts, agricultural guidance, and technical help. In the past, after attending e-Choupal meetings and debates, farmers would come up with their own unique ideas; now, even such customised solutions are offered by e-Choupal. Due to advancements in digital technology, e-Choupal 4.0 intends to adopt a more collaborative and integrated approach, embracing features such as rapid quality testing performed with assistance from startups. The company makes extensive use of emerging technologies like artificial intelligence, IOT, big data, and machine learning (Rao, 2023).

Accomplishment Despite Obstacles

Multiple accolades have been given to ITC's e-Choupal, which is widely recognised as the biggest Internet-based initiative in rural India. It has received the 2004 ICC-UNDP-IBLF World Business Award for advancing the UN's Millennium Development Goals, as well as the 2006 Ashoka - Changemakers "Health For All" Award for its Rural Health Services model of delivering health care to underserved populations. It was also bestowed with the Stockholm Challenge Award in 2006 for its use of Information Technology to enhance the quality of life in underprivileged regions and drive economic development. ITC was given the UNIDO Award at the 2008 International Conference on Sharing Innovative Agricultural Solutions in Cairo for its remarkable e-Choupal-based agribusiness activities. But the going has not been smooth all the way. There have been obstacles throughout the development of the project. When ITC successfully advocated on behalf of farmers, regulations requiring them to sell their products solely at government-run marketplaces came in their way. The regulations were subsequently toned down. The origin of these laws is the socialist and protectionist heritage of India. The e-Choupal initiative bypassed mandi middlemen, who went on to exert pressure on the government to limit such transactions. ITC was finally compelled to purchase its supplies via both the mandi and the e-Choupal initiative. In addition, several indigenous tribes in India have indicated their objection to the concept by insisting on separate computers for various castes so that they do not have to mingle. Infrastructure issues with power supply, telecommunications, and bandwidth have also been a concern, alongside the difficulty of teaching first-time Internet users in geographically isolated rural parts of India. Verma et al (2017) analyzed the major constraints perceived by the farmers with respect to usage of e-choupal,, citing major constraints such as lack of awareness about services of e-choupal, difficult accessibility of eChoupal, and the unavailability of information in local language.

Clearly, not everything is perfect

The e-Choupal hub, which links the whole village to the ITC distribution network, serves as the system's front end. ITC handles the agriculture procurement system throughout the regions in which the system operates. It effectively controls the market for knowledge and goods connected to agriculture. This is, in effect, the company's long-term objective. Research and objective assessment are required to determine how effectively this company strategy satisfies its rural development objectives. Even if one accepts the assumption that market forces may boost economic growth, market logic says that a monopoly-forming company like ITC is not motivated to preserve the best interests of its customers over the long term. Also essential to ITC's economic strategy is its monopoly over information highways. Seeds and fertilizer are among the agricultural supplies distributed, along with information on best farming practices. Consumers may profit briefly from a monopoly's greater market strength, but what is apparent tends to obfuscate certain market realities. In areas where ITC is operating, independent government mandi-based procurement brokers are closing their doors because of the company’s strategy. Whether these monopolies and the totalizing potential of ICTs (Information and Communication Technologies) really benefit the community as a whole is highly debatable. One may argue that the e-Choupal system was created with the wants and wishes of wealthy farmers in mind, with certain advantages trickling down to those with more disposable income Madan et al (2016). It is contended that there is scant evidence to show that the most disadvantaged segments of the society benefit greatly from the enhanced agriculture business. A greater dependence on industrial crops, on the other hand, it is further stated, may raise food costs and reduce food availability, thereby jeopardizing the food security of the local community. The growing reorientation and dependence on the e-Choupal system in the rural economy may have negative medium to long-term ramifications, and these impacts should be analyzed thoroughly rather than left to the participating company. This is essential since the local populace is powerless when it comes to halting the spread of the dominant system (Rao, 2011). With the assistance of a captive, unregulated Information and Communication Technology (ICT) network, a multinational corporation can monopolize the local agricultural ecosystem via the e-Choupal development model, which binds together many farmers while displacing marginal and small landholding farmers. In addition to operating as a monopolistic channel for the purchase of agricultural commodities, the e-Choupal system provides upstream actors with access to data about the local community, agricultural extension services, and statistics pertaining to agricultural and economic development. Thus, there is a danger that public and community-based organizations, which have historically managed a significant portion of these obligations, would be swamped. Growth of private systems such as e-Choupal in different regions has given rise to significant fears that many governments may go on to reduce their own presence here. By and by, this creates several difficulties of equity and social justice.

Conclusion

The ITC e-Choupal system is indeed an innovative step forward for India's rural sector and a pillar of ITC's "Choupal" rural development programmes. As a result of ITC e-Choupal, more farmers in rural India can reap the advantages of the country's developing economy, hence improving their standard of living. Farmers have seen a rise in their income levels due to better crop yield and quality, and a fall in transaction costs. Appropriate and relevant knowledge is offered to the farmers despite the different cultures, climates and scales of production. Things are looking bright due to the emergence of new firms and ITC's commitment to serving the greater good. Apart from enabling farmers to capitalize on the advantages of digitization, e-Choupal has aided in the expansion of the rural environment. Looking at the way things are going, one may conclude that increasing rural buying power and promoting sustainable lifestyles will continue to be ITC's primary focus, establishing the framework for the company's transformative influence in India's rural regions. The e-Choupal model illustrates how a huge business can boost the awareness of its brand and the efficiency of the agricultural system in a manner that benefits farmers, rural communities, and the company's investors. The initiative highlights the importance of IT in creating transparency, greater access to information, and rural development. After all, in this instance, the IT component was sponsored and managed by a company but used by rural farmers showed how ICT-based business opportunity development model of e-Choupal can affect the income, time and saving of farmers in developing economy. The venture's apparent success can be attributed in large part to ITC's in-depth understanding of agriculture, its efforts to preserve various aspects of the current production system (such as the involvement of local partners), its obligation to openness, and the fairness and respect with which growers and local partners are treated.

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Received: 15-Mar-2023, Manuscript No. AMSJ-23-13507; Editor assigned: 17-Apr-2023, PreQC No. AMSJ-23-13507(PQ); Reviewed: 08-May-2023, QC No. AMSJ-23-13507; Revised: 12-May-2023, Manuscript No. AMSJ-23-13507(R); Published: 25-Jul-2023