E -Kiosks for Socio- Economic
A Critical view of the e-choupal
Anil Philip-06808007
Avishek Bose-06808001
• The idea of a Village Kiosk as an ICT application for socio – economic
development is centered around the idea of ‘ Information Dissemination’.
• More recently - It has become an engine for facilitating the transformation
of the rural economy through the use of an Active Business Model
Allows us to locate
the new village kiosk
within the BOP
ITC’s e-choupal
n- Logue
Warana ‘Wired Village’
• Origin: 1998
• Target Area: 70 villages in the Kohlapur district
Organizations involved: GOI, Govt. of Maharashtra, A Sugar Co operative in Warana
• Objectives:
(1) To make available agricultural, market and educational information in local
Provide information on Govt. schemes
To create a database of villagers on various socio-economic aspects
To establish GIS of 70 villages
To simplify operations of the Sugar Co operative
Connectivity: VSAT technology; UPS backup; Dial up modem; 1 multimedia
computer per kiosk
• Project cost: Rs.25 million – borne solely by the Govt.
Reasons for Failure:
Insufficient knowledge among villagers, spl women
Poor back end technical support leading to obsoleteness of the technology
Non updating of information on various services provided
Lessons learnt / A future platform ?
Actual needs assessment of the intended beneficiaries is required
Lack of local participation in content and software creation will make a technology
Need to include women and other disadvantaged groups
n-Logue: Building a Sustainable Rural Services Organization
• Status of the Project: Operational
• Location of the project area: Indian states of Tamil Nadu, Karnataka, Andhra
Pradesh, Gujarat, Maharashtra and Madhya Pradesh
Type of Application/Service : Multipurpose telecentres, Community
development and tele-administration
Type of Technology: Fixed Wireless Access
Organizations involved in the project : TeNet, Indian Institute Of Technology,
Chennai and n-Logue Communications Pvt Ltd
Challenge: To build a model with potential to scale half a million plus villages
Building a scalable model
 Technology used: Cost effective, Affordable, robust and scalable
 Business Model: Each participant should earn from the efforts
CorDECT Technology – Jointly developed by the TeNet (Telecommunications and
Computer Network group of IIT Madras) and Midas Communication Technologies Pvt
 Capable of offering simultaneous voice and internet access and can deliver around
35/70 kbps connectivity to villages
Features of the Technology
An exchange and a base station is
installed at the taluka or town where
fibre is located (Also a constraint)
Doesn’t require air conditioning
Total power requirements for 1000
subscribers is only 1KW (can be
generated by a small generator)
Total installation Cost- Rs 13000 – Rs
Viable Business Model
PCO revolution
Aggregation of demand
Presence of entrepreneur driven business
Proximity to a facility for greater access
Structure of the n-Logue model
Services provided
Along with telephony, n-Logue also offers video conferencing and email. Video
conferencing software is bundled with the basic kiosk operations.
Offering services to learn computer based applications through online modules.
Works as an agricultural consultant in terms of offering advices
In the area of health care too, n-Logue has set up operation by using internet
based video conferencing for the doctors to see the patients.
It also offers services pertaining to e-governance with services like holding land
records, online application forms, payments of various utility bills, etc.
n-Logue derives its revenue mainly in terms of usage revenues from the kiosk
The kiosk operator pays n-Logue a sum of Rs 800 approx per month which is shared
between N-Logue and the Local Service Provider
The kiosk operator breaks even over a period of 6-8 months and recovers the initial
investment over a period of 3 years
n-Logue has thus built a self sustaining model which has profitability as its core
business strategy
ITC e-choupal
Origin: 2000
Target Area: So far 38,000 villages, 6500 kiosks, 9 states
Organizations involved: Wholly funded by ITC. Has government officials in the
governance process and other agricultural institutes have been roped in to provide
expert information
Why is this venture so popular right now?
Only initiative to attempt to combine Services and an Effective Business Model
Designed to address the rural problems of:
Fragmented farms
Weak institutions
Involvement of intermediaries
Information Asymmetry
An IT Driven Solution
Though the IT component constitutes only 20% of e-choupals business model, it is
the most crucial part. There are two goals here:
1. Delivery of real time information independent of the transaction
2. Facilitating communication between different parties involved to bring about
transparency in the whole system
The Business Model
The idea – To saturate a particular sector with e-choupals where one choupal
would serve 10 villages within a 5 km radius.
The village e -choupal is housed in the Sanchalak/ Co-ordinator’s house.
The sanchalak is central to the business model. Such a role helps ITC by:
Providing trust among the farmers on behalf of the community
Removing the need of a physical infrastructure such as the kiosk
As a communication channel between the illiterate farmers and ITC
The sanchalak is paid a commission on each transaction undertaken (0.5%). The
main attractions for such a post are :
Increased social standing among the community
Willingness to help the village
Profit motive
Technology used in the E-choupal
 Power constraints- Sporadic availability of power (unreliable) and substandard
quality of power
 ITC overcame this constraint by installing battery based UPS backup. Now solar battery
chargers are used. 1 charge = 70 to 80 minutes of computer usage.
 Telecom Infrastructure:
Usually poor infrastructure. As of now rural
telecommunications infrastructure is designed to carry voice traffic only.
Transmission speed being slow-restricts internet access
 Initial solutions to this constraint was to help C-DOT improve their RNS kits to allow for
increased transfer up to 40 kbps from the earlier 12 kbps (Dial-Up connection)
 Dial-Up to VSAT : Dial-up connection was not sufficient to drive future proposed
applications. In order to support transactional capabilities and multimedia applications, ITC
adopted a satellite based technology VSAT. Now has speeds up to 256 kbps. (Cost per
installation=Rs 120,000)
 Applications :
The Web site www.soyachoupal.com is the gateway for the
farmer. The Web site is protected and requires a user ID and password to login. As of
now sanchalaks are the only registered users.
 Weather :.Localized weather information is presented on regions within a 25 kilometer
range. Typically 24- to 72-hour weather forecasts are available along with an advisory.
Weather data is obtained from Indian Meteorological Department
 Pricing: The e-Choupal Web site displays both the ITC procurement rate and the local
mandi rates. ITC’s next day rates are published every evening. The prices are displayed
prominently on the top of the Web page on a scrolling ticker.
 News For the soyachoupal Web site, relevant news is presented from various sources. In
addition to agriculture related news, this section also includes entertainment, sports,
and local news.
 Best practices: Best farming practices are documented by crop. Here again, the
information presented is action-based. For instance, this section not only highlights what
kind of fertilizers to use but also how and when to use them
 Q & A: This feature enables two-way communication. Here a farmer can post any
agriculture related question he needs answered.
 System Support :
ITC has about 15 engineers who provide field
infrastructure support to the e-choupals. They average about one or two calls a
day. Each e-choupal is visited about twice a month for infrastructure support. The
support cost is estimated at Rs. 300 per visit. In the future ITC proposes to improve
service and lower costs of infrastructure support through remote help desk tools
and network automation.
Mandi Operation Process
- Long distances between mandis
- Monopolization of information by the trader communities
- Fragmented payments by traders to framers
E Choupal Supply Chain
- Able to differentiate between ‘Risks in Farming’ and ‘Financial risks in Trading’
[ Possible by correcting the information asymmetry]
- Also allows the farmer an enlarged choice set – whether he wants to sell to ITC or to
the mandi
Farmer Gains
Farmers have access to prices and can make critical decisions of when and where
to sell
Saving on transportation costs from the field to the mandi
ITCs electronic weighing scales and transparent checks ensure ‘intentional
spillage’ doesn’t occur
ITC’s agricultural inputs cost substantially less than those offered at the mandi
Farmers save almost 2.5% over the mandi system ( Rs.400 – 500 per ton of soy)
thanks to a more efficient market system e.g. cultivation of soy has increased from
50 – 90% in e choupal areas
They can take advantage of services provided by the e-choupal to improve their
crop output and farming practices
Increased self respect as they are treated as co partners in a business relationship
ITC Gains
Lower transaction costs:
ITC pays only a 0.5% commission to the Sanchalak as compared to the 2.5 – 3%
paid to the agents under the mandi system (including true cost of inefficiency and
intermediary costs)
Has found it cheaper to reimburse farmers transportation costs that pay agents for
transportation. (managed to save almost RS. 200 per ton)
Direct virtual vertical integration through e -choupal allows ITC to communicate
directly with the farmers
It gets excellent ‘bottom up information’ on pricing, product quality, soil
conditions etc. from the Sanchalak
Allows them to develop a long term supplier relationship with the farmers,
ensuring supply security over time
By providing quality agricultural inputs and buying quality crops, ITC can ensure a
satisfied customer base
In absolute numbers, both the farmers and ITC
save about Rs 270 per metric ton.
Each e-Choupal costs between Rs 120,000 and Rs 200,000 to
establish and about Rs 5000 per year to maintain.
Using the system costs farmers nothing, but the sanchalaks
incurs some operating costs( electricity and telephone charges)
Farmers also use the computer to order seed, fertilizer, and
other products (such as consumer goods) from ITC or its
partners, at prices lower than those available from village
Farmers selling directly to ITC through an e-Choupal receive a
higher price for their crops than they would if they sold them
through the mandi system, where the intermediary makes all
the money.
ITC also benefits, saving about 2.5 percent in commission
fees and transport costs that it would otherwise pay to buying
agents at the mandis. The company reports that it recovers its
equipment costs from an e-Choupal in the first year of
The e-Choupal network reaches more than 3.5 million farmers in nearly 31,000
villages through 5,200 e-Choupals in six states (Madhya Pradesh, Karnataka, Andhra
Pradesh, Uttar Pradesh, Maharashtra, and Rajasthan).
ITC’s vision for the next decade is to expand from nine to 15 states, to reach 100,000
villages, and to benefit a total population of 10 million.
e-Choupal is also expanding the range of its activities to support rural communities,
using its network to deliver a broader range of services and working in partnership
with government agencies and civil society organizations in watershed development,
animal husbandry, human-capacity development, education, health care, and gender
ITC’s model identifies two sources of value that help scale the model
• Crop Specific Intervention: ITC recognized that agrarian systems vary by crop. For
example, the systems, and consequently the e-Choupal models and payback streams,
for coffee and shrimp are very different from those for soy.
• Low-Cost Last Mile: The same system of physical and information exchange that
brings produce from the village can be used to transfer goods to the villages.
Products such as herbicides, seeds, fertilizers, and insurance policies, as well as soil
testing services are sold through e-Choupal. E-Choupal as a distribution channel
begins in agriculture but extends well into consumer goods and services.
Radical shifts in computing access could fundamentally alter community based
business models causing social and economic repercussions
Possible danger that Sanchalaks may unionize like the traders and attempt to
extract illegitimate leverage over the villagers. If they grow displeased with the
commission arrangements, this could be a reality
This venture has proved that ICT projects and business opportunities at the BOP
are possible with innovative ideas. Other companies may be interested in
competing at the BOP
Field study reports indicate that an ‘hierarchy of access’ is developing around the
e -choupal and other similar ventures; where certain sections are restricted access
to the computer and even the Sanchalak
• The ITC e-choupal model shows that the sustainability of such projects is
strongly dependent on the ability of the organization involved to
effectively combine services
• A creative business model is required to spur economic growth at the
village level, mere dissemination of information may be inadequate in
certain contexts

ICTs – The Village Kiosk