Save Chenetha - Save Weavers

Save Chenetha – Save Weavers

A Presentation by

Hari Kasula

Telangana Development Forum – USA

@

Telangana Vision and Mission & Leadership Conference 2010

Dallas, Texas - USA

. 9

Glory of Chenetha

India’s handloom history dates back to Vedic period. Earliest evidence was found in the excavations of Harappa and Mohen-jo-daro. At the times when the world was in search of civilization, India had produced finest handmade clothes. Indian weavers are pioneers in weave clothes from a combination of cotton and precious metals. Prior to colonization, India's manually operated textile machines were among the best in the world and these served as a model for production of the first textile machines in newly industrialized Britain and Germany.

Expressing ethnicity through fabrics and designer techniques has been an integral part of India’s cultural base. With a huge variety of designs, printing techniques, and the art of weaving, the field of Indian handloom has created magic all over the world. Fascinating texture and fabric style has been increasing foreigners’ knowledge about India’s cultural heritage. From the ancient times to today, Indian handloom has travelled steadfastly in the direction of lessening gaps between countries. In fact, our handloom industry acts as a bridge between cultural differences.

The magic of Indian handloom is such that it has won wide acclaim and the popularity has spread over international boundaries. Originality and Creativity brought this sector huge market in foreign countries. In the broad sense of a significant participation in world trade, the Indian textile industry had been ‘globalized’ for at least 200 years before 1950 when modern machine was a distant dream. At 1750, India supplied about a quarter of the world’s industrial output, its humongous Handloom industry constitutes to 14 percent of total pre-industrial production and 30 percent of the total export business. In turn, handloom industry became one of the most important factors for the country’s economic growth. At 1950 India was the second largest cloth exporter in the world after Japan.

Diversified Weaving

Like the cultures in India, the subcontinent hand weaving is diversified. Each state has its own popular design, fabric, weaving style and a unique product. Andhra Pradesh and Orissa are known for Ikkat, Punjab for Phulkari, Madhya Pradesh for Chanderi, Rajasthan and Gujarat for Tie and Dye, West Bengal for Daccai, Banaras for Brocade and Uttar Pradesh for Jacquard. Even within Andhra Pradesh, the state’s handlooms produce is distinguished and designs are exclusive. The looms of Venkatagiri, Pochampalli, Dharamavaram and Narayanpet are famous for their cotton and silk saris. In fact, Andhra Pradesh has a rich treasure of Kalamkari style of printing. Another example of this state’s individuality is seen in Gadwal saris. One can also see gold and silver zari work on the dress materials and saris of Andhra Pradesh. Dress materials, rugs, curtains and carpets are other glitters in the state’s heritage crown.

Warangal rugs and silk carpets won acclaim in 1851 London Exhibition. Silk Rugs were priced at 100 Pounds per square yard in those days. Late Sri. Nalla Paramdhamulu, from Siricilla, Karimnagar weaved a saree that fitted into a matchbox. He received the Master Craftsmen’s Award from the former President Dr. A.P.J. Abdul Kalam. Sri. Sangem Krishnamoorthy has weaved a cloth showing Vishwaroopam of Sri Maha Vishnu. Sri. Ande Subbarayudu weaved a Shirt on Pit Loom without a single stich. Sri. Kandgatla Narasimhulu weaved a saree colors 1 Lakh 56 thousand colors.

The state has always been a major producer of handloom textiles, and has the second highest number of looms and workers among all the states, next only to West Bengal. In 1983, at the peak of Handlooms golden era, there were about 2115 Weavers cooperative societies were running successfully with over three and half lakhs of registered member weavers and with overwhelming productivity, revenue and growth. By and large, weavers worked from a household unit, the women and children supplied auxiliary services including spinning in many cases.

Today’s Cheneta

From mid 80’s, the handloom glory has started to fade. Many of the cooperatives were either defunct or running at a huge loss, as a remedial measure the government reorganized the cooperatives by a process of mergers and liquidation, bringing their number to 825 by the end of 1983. In all, 61 % of the societies were liquidated. Further, there was a steady decline in the number of cooperatives in the state which came down to 755 by 2003-04. According to the latest information, only 540 of the 783 officially listed cooperative societies in AP are active.

The number of registered weavers in the cooperatives has declined from 356,250 in 1985-86 to 132,291 by 2003-04, a record decline of 63% for the state. The drop in weavers was across all the regions notably a 77 % in Telangana. The performance of cooperative societies is reflected in the number of active looms as against total number of looms. As on March 31, 2005, of the 90,168 looms under cooperatives in AP, only 37 % were active, while nearly 63 % are dormant. In Telangana region it is 74% Telangana, particularly in Khammam (84%) and Nalgonda (81%) districts the proportion of dormant looms was very high. The quantity of cloth produced in the cooperative sector in the state declined from 923.06 lakhs meters in 1985-86 to 225.76 lakh meters in 2003-04, a 77.3% decline. The decline was more pronounced after 1995. The extent of decline in Telangana was 79%.

In the initial years APCO, an apex society to safe guard Weavers Cooperative Societies, functioned quite well, with sales reaching Rs 128.41 crores during 1992-93. But there has been a steady decline since then, and in 2000-01 the total sales of APCO amounted to only Rs 20.38 crore (data supplied by APCO). In 2009-10, APCO’s revenue was Rs 250 crores, up 32 % from the previous year. The share of WCS product sales is only Rs 57 crores. Though it has been making profits for the last five years, it has accumulated a loss of Rs 200 crores over the last 20 years.

Despite working for more than 12 hours a day for over 25 days in a month, a weaver’s monthly income averages to less than Rs. 1500. Poverty and hunger is pushing weavers to migrate to nearby cities leading to chaos. Weavers with exceptional skills and talent are turning into daily labors, construction workers, hotel waiters and watchmen. But those who could not leave mother-like profession and god-like talent are stuck with handlooms and are dying of starvation. The worse is, inability to feed their own families throwing weavers to hopeless suicides. There were about 120 deaths in last six months. And since 2005 more than 1000 took their life. Dubbaka alone witnessed 125 deaths. Entire KarimNagar cluster is disastrous now. Just in one year, from May 2004 to Sept 2005, it has seen 227 suicides. In last year, over 600 weavers committed suicides from the cluster.

Before analyzing what made weavers commit suicides and discuss solutions, it is important to know “what are the dynamics of chenetha as a product” and “how does chenetha industry work”.

Dynamics of Chenetha – How does it work?

An Individual Weaver, who works at home with his own loom, continues to be the basic unit of production in handloom weaving. However, though there are a few independent weavers, production and marketing are generally organized under two institutional structures – cooperatives and master weavers. In some areas there are also a few middlemen who are generally promoted and controlled by the master weaver. Independent weavers are usually outside these institutions.

Weavers Cooperative Society works as a union. WCS uses its registered wavers to make the products. Their typical product line would be the product of cluster in which the cooperative falls into. For example, Pochampally cluster cooperatives weave only pochampally sarees but not Kanchi sarees. With the capital they acquired from Govt financial institutions, like banks, they go to APCO to buy raw materials. Then Cooperatives puts the weavers to work. Once product is finished APCO will procure all WCS products. When APCO actually sells the goods, they will pay Cooperatives and Cooperatives will then pay Wavers wages.

Master Weavers first researches what is the profitable product in current market. Then they invest their own money as capital in making these products. They hire weavers to work for them either at their shed or at weaver’s home. They buy Raw Material from open market and engage weavers for weaving. After the product is finished, they pay of the wages and go to market for sales.

APCO is an apex society that works with all Weavers Cooperatives Societies in the state. Its main responsibility is to assist Cooperatives in getting loans, market their products, supply raw material, handle financials and promote WCS products. APCO buys the raw material from NHDC, a Govt. organization that supplies raw material on discount. APCO sells products in local market, to Govt. organizations or exports to abroad. This is like any typical Govt. office which is lead by bunch of bureaucrats.

For Independent weavers it starts with identifying the product to make and their choice is sole centered on their weaving skills. Then they raise capital from private lenders who charge a high interest rate and buy Raw Material in open market. They then engage their entire family in making of the product. Once the final product is ready, Individual weaver has to sell his products by himself, and his obvious choice is local markets. He competes with other independent weavers and master wavers to sell his products. At this juncture, Individual weaver must sell the goods to avoid interest on capital and immediate money. He ends up selling to rates lesser than the production costs.

Economics of Chenetha – How does it work?

The cost of production varies from one institutional structure to other. For a product worth Rs. 1000, the making cost for Cooperatives is Rs. 804.41, for Master Weavers it is 610.21 and Rs 665.78 for Independent weaver. The major portion of these costs is raw material and the price of raw material decides profit margins in a given marketing conditions. Though the material is same, the channel through which one buys it gets the deal. APCO buys from NHDC, Masters and Individuals buy in open market. For Independent Weavers, 88% of the cost is raw material.

The second major share of the making costs is wages. Independent Weavers does not pay any wages as they involve entire family in making the product. Cooperatives pay 57% as wages and master weavers pay37%. Though WCS pays higher rates, it does not guarantee the month full of work whereas Master Weaver guarantees work at least with lower wage rates.

All these institutions seem to make profits but the reality is otherwise. APCO is the only buyer for WCS. And APCO pays for merchandise only when APCO sells it. This results in a gap of 180 days, at least, for the payments. This gap increases with the time as APCO has to clear piled stocks. By then the profit weavers make will go into interest on capital and into debts they make for their day-to-day living.

Similar is the case with Independent Weaver. He has to buy raw material in open market and the prices are sky rocketing. Due to lack of negotiating power with the buyer and limited access to capital, he ends up in debts. The entire family’s labor he puts in making the product is never paid.

Master Weavers are only money makers in this entire cycle. Master Weaver buys Raw material for cheap as he buys in bulk and even goes to places for lesser prices. His marketing style sells all his goods. He often travels around the nation to sell his goods. In spite of other overheads he makes good profits. But these profits are not shared with the weavers. He just pays weaving labor.

Reasons for failure – Handloom Industry

After liberalization, textile policy is more openly slanted towards higher productivity (the powerloom sector) and export potential, implicitly relegating the handloom sector to a secondary status. Handloom weaving is an activity in deep crisis, caught in a vicious circle of low productivity and wages unable to retain a competitive edge in the face of competition from power looms, rising costs of inputs and production, shrinking markets and lack of adequate state support. The Sale price, thereby profit is going down along with demand for weaved products. Scarcity of raw material is everywhere. Reeling units, spinning mills and raw materials are controlled by private entities those who get to decide the price of the raw materials. One example to uncontrolled prices is, per box price of yarn ranged from Rs 1800 to Rs 1900 in December 2009 and went up to 2600 in just 4 months

In Telangana region, Medak and Nalgonda districts have experienced a decline in loomage besides Karimnagar, which accounts for 34 % of total powerlooms in the state. Powerlooms in Karimnagar and Nalgonda increased the cost production by increasing the wages to 48.15%. In these districts, powerlooms have adversely affected even the good cooperatives. The cost of production for Rs 1,000 worth of output was Rs 786.45 in these districts, as compared to Rs 675.46 in the other districts. The share of wages also went up from 41.5 % in the non-powerloom districts, to 48.15 % in these three districts, without any increase in the contribution to the value of output. The net profit ratio correspondingly also came down from .90 to .78, as did overall profitability.

Reasons for failure – Institutions

Below are the prime reasons for the failure of handloom institutions.

APCO

ØMismanagement of funds

ØWeaver alienation in decision making

ØLack of infrastructure

ØLack of skill development programs

ØLack of autonomy in functioning

ØFinancial issues

ØManagement issues

ØPiled up stocks

ØPending dues

ØPolitics

Weaver Cooperative Society

ØNo Working Capital

ØScarcity of Raw Material

ØDelayed Payments

ØNot enough work

ØBureaucratic procedures

Individual Weaver

ØLow bargaining power

ØDependency on Master Weavers and private lenders for credit

ØRestricted membership to Cooperatives

Ø Low valued Product line

Ø Lower income rates

ØHigh cost of Raw materials

What Leads to Suicides

Ø Average Salary is below Rs. 50/day

Ø Buying in thousands and Selling in hundreds

Ø Inability to provide education to kids and care to family

Ø Repayment of loans

Ø High interest rates on capital

Ø Lack of coverage for occupational diseases like Asthma, TB, Arthritis and Skin diseases

Ø Social problems like ego and addictions

Government Efforts

For policymakers, handloom weaving is a holy cow, too reminiscent of nationalist ideals to be rejected. The concern for the dying is only found in election agenda but not in implementation. Policies made before independence weren’t implemented. Govt. has failed to implement Handloom Reservation Act and Hank Yarn Obligation Act. 1981 textile policy is only for power looms and textile mills but not to handlooms. The periods, 1990-95 and after 2000, are the two major periods of policy reform regimes of trade liberalization and public disinvestment. These two had indirectly affected the handloom sector. “Loan Waiver” is minimizing the debt burdens of the institutions but not the individual weaver. The special packages relief funds are not reaching to the weaver who is at the bottom of chenetha chain. Majority of Govt. announced subsidies are limited to Cooperatives but not to Independent Weavers and not to weavers who work under Master Weaver. Influential people are registering bogus societies to benefit from the government programs.

Solutions and Fixes

The Industry

Power looms are the immediate competition to the handlooms. It is tough to beat their productivity but not their product value. Many regions in Telangana still produce low quality products like “Muthaka sarees”. Weavers should produce high value products that run beyond their current product line. Product line should expand to wide range of customer base. Marketing should beat the competition by involving professionals to sell. Local and Abroad markets should be explored. All kinds of marketing channels that takes product right to the buyer need to be explored. Govt. should enforce Handloom reservation act and Hank Yarn Obligation orders. Decentralized spinning mills and cluster based reeling units and yarn depots minimize the scarcity of raw material. Govt. must come with effective policies and implementations with no exceptions. And organize chenetha fairs in every major city or town at home and abroad.

Individual Weaver

Individual weaver’s only source for capital is open market lenders who typically charge over 24% of interest a year. These weavers should be able access the capital by approaching financial institutions. The subsidy on the raw material should be extended beyond the WCS to all weavers. Introduce them to what the world is interested in today. Train them in producing those kinds of clothes. Setup chenetha convenient stores “APNA BAZARS” where Independent Weaver can set price on their product and consumers can directly buy these products. This avoids the gap between the producer and actual buyer thereby increasing the profit margins for both the parties.

Weavers Cooperative Society

Marketing goods on their own makes WCS independent. By this, WCS becomes decisive on products and revenue generation. WCS should have access to financial institutions for capital. WCS should be able to directly get raw materials from subsidy without APCO in the middle.

APCO

For both WCS and APCO, the bureaucratic structure of organization needs to be changed. In order for APCO to survive, the way they function needs to change. The thought of “No matter what, whether they sell procured clothes or not, they get paid” needs to be changed. This should act as autonomous body in functioning. It should adopt corporate style of doing business. The life of APCO should derive from sales they do for that year but not the government salaries.

What can we do as NRI’s?

In India, the work of NGOs is issue based. There are many NGOs that are dedicatedly working on many issues but not on Chenetha issue. This is where we, as NRIs, fit into big picture. Our organization should act as an NGO to bridge between the government efforts and suffering weavers. We should organize fairs to introduce latest trends about “What the world really values”. We should organize skill training camps to get trained in latest trends. Select 3-5 members from each village and tour them to observe the progress in skills and technologies rest of the world is making in handloom weaving. Let’s work with fashion designers to come up with new designs and clothes. Let’s design clothes that everyone wears not just sarees but also modern dresses. Work with APCO to restructure the Marketing strategy. Donate funds for relief efforts. Organize health camps to give care that they could not get.

TDF-USA Initiatives

TDF initiated a committee to address immediate and long term needs of weavers. “Save Weavers Committee” working on the ground to provide relief efforts to weavers. Its major responsibility is to stand by weavers to give them all kinds of support they need. This committee has global representation. TDF members from USA, India, and UK are currently members of the committee. In coordination with other social organizations like SJM, POPA and Athmeeya Seva trust, Save Weavers Committee is raising money for immediate relief efforts in Telangana. As Dubbaka‘s situation is worse, we selected this as our first relief execution cluster. About 1000 families have been identified that requires immediate attention. The committee members are working with elected legislative members and officials so that weavers be benefited from government relief efforts. A health camp to treat weaver’s occupational diseases is being organized. The committee is going door-to-door to counsel these weavers to stay brave and organizing rallies to show them “we are with them”. The committee has organized a chenetha benefit lunch and raised 25k so far to help weavers. Our youngest member of the committee Ms Puja Eppanapally has launched a global petition to save weavers. She has submitted petitions to Prime Minister, Chief Minister and HRD ministry. Please make your donations by going to telangana.org.

Better way of doing RIGHT

ØInvestment Perspective

ØSocial Entrepreneur or Community Entrepreneur

ØWork with fashion experts to come up with trendy designs

ØAdopt a cooperative society

ØSetup dedicated cooperative bank or Micro-Finance for chenetha

ØSupply raw material for discounted prices.

ØBring corporate culture in marketing.

ØBring here and sell.

ØPayback capital loan

Community Entrepreneurship – The Investment perspective

In the life cycle of weaving, weavers depend on other entities or individuals in every stage right from product design to selling the finished goods. What if we be that help and set up small scale business and share the profits with weavers. I am trying to give a perspective of social entrepreneur or Community entrepreneur here.

Invest in exclusive designs that sell. Invest in training that makes high value products and provide training to weavers. Adopt a village or WCS to setup a Cooperative Bank or Micro Finance exclusive for Chenetha capital and loan capital to weavers. Take the government help to set up subsidized raw material store. Sell them for discounted price. Selling merchandise is the critical part. Set up a brand name and sell under this name. Setup a collection center. Market everywhere, in Indian and American communities. Approach malls and hotels to setup chenetha collections. Let’s find an ambassador for it and use electronic media to advertise. Pay back the weaver wages and share profits with community. This will requires huge investment and dedicated business setup. If we can form a small group of investors, I guess this is not impossible.

References

vEconomics of Handloom Weaving by S Mahendra Dev and et all

vAnnual State Administrative Reports, Govt. of AP

vIRMA and NABARD Reports

vTraditional Markets in New Economy by Mukund et all

vNCAER – Census of Handlooms

vSwadeshi Jagaran Manch Report