Battleground: A mandi in Madhya Pradesh

Four years after it was kicked off, ITC's e-choupal model, which raised visions of transforming Indian agriculture, has run into strong opposition. Last week, traders in 220 galla mandis (grain auction centres) in Madhya Pradesh downed their shutters for a day to protest against the "unjust choupal system", which allowed large companies like ITC to bypass mandis and buy from farmers.

But a group of soya farmers in the state who are part of the choupal system have taken up cudgels on behalf of ITC and threatened to reveal the "real truth" to the chief minister and mandi commissioner, and at a press conference this week. Says Durga Prasad Patidar, a sanchalak (lead farmer) in the ITC choupal system in Misrod: "Obviously the traders will protest. They cannot make the same kind of money now... [But] we are happy to see an end of an unjust mandi system that exploited farmers."

Sources say the battle had been brewing since the e-choupals began proliferating rapidly across MP. Today, in some mandis, a quarter of soya now goes through e-choupals, of which there are 1,750 in 9,000 villages reaching 1.5 million farmers. ITC had placed Net-enabled PCs in homes of farmers in the rural hinterland. This allowed them to find prices of soya prevailing at local mandis and in international markets, as well as what ITC was ready to pay at its local buying centres. So the farmer did not have to travel to the mandi to find the price. He also had options: sell to ITC or at the mandi, or defer the sale.

Word got around that ITC's prices tended to be above mandi prices. "If mandi prices dropped, we realised the ITC prices did not drop as fast," says Arun Nahar, a lead farmer in Pipalrawa. For traders, the transparency made speculation difficult. Also, unlike at mandis, at the ITC buying centres the weights were right, the sale quick and the payment in cash.

From the outset ITC had taken care to co-opt traders and give them new roles. They were paid a commission for arranging volumes and offering storage and logistics support. Their help was sought in appointing sanchalaks. Though 85 traders became samyojaks in MP, some of the big ones didn't. Now, four years later, they are realising the power of transparency and choice, the hard way.