Report on Marketing Study in the area of Handloom Project under CLSP component of OFFDI

Supported by: Department of Planning and Co-ordination Government of Orissa

Project implemented by:

Institute of Rural Development and Management Studies(IRDMS) Report on Marketing Study in the area of Handloom Project under CLSP component of OFFDI

Supported by: Department of Planning and Co-ordination, Government of Orissa

Project implemented by:

Institute of Rural Development and Management Studies(IRDMS) Content

Background The Study Area Sambalpuri handloom in the operational area Social-economic profile of the weaver community The Marketing Study The Process The Weaving Operation Supply of Raw materials Marketing Channels Marketing of the woven goods The marketing Channels Issues The Existing Supply Chain Conclusion Background Orissa has the richest traditions of handloom and handicrafts in the country, more specifically having handlooms like Sambalpuri, Maniabandha, Bomkei, Bandha etc. Amongst these Sambalapuri have its unique identity and demand in the market because of its texture, design and durability of colour. Although the Sambalpuri name of a locality attached to the product, since age long the textile type has its presence in undivided Phulbani and KBK region since ages. The traditional cultural trend and costume adopted Sambalpuri handloom as customary item in the society. The traditional artistic handloom fabrics and other craft items reflect the cultural heritage of the region. Which became the major livelihood option of the state next to agriculture and the handloom sector provides major employment to people in the informal economic sector.

As the weaving sector depends mostly on government patronage as incentives provided to the handloom industry from time to time. As a result excluding the highly skilled tie and dye weavers constituting around 40 per cent of the weaving population, while the rest depends on the local market and local marketing out let's to sustain their livelihood.

At present it is observed that the handloom industry of Orissa in particular and the country in general is passing through a very difficult time. The introduction of new economic policy (NEP) and adoption of SAP (structural adjustment programme) measures by the Government of since 1990 have resulted in downfall and decelerating growth of the handloom sector in the absence of adequate state sector support and interventions. The primacy of the market economy and globalization without adequate innovative measures and support for the handloom fabrics have slowly started affecting the growth of the industry and livelihood of the weavers all over the country. Orissa, a least industrialized and poor state has become the worst sufferer.

The latest Handloom Census conducted by the NCAER (National Council for Applied Economic Research) during 1995-96, however, shows that the number of commercial looms in Orissa was 76,645. In these looms 81,440 persons were working as full-time weavers and 23,236 were part-time weavers. Added to this, 45,210 persons were engaged in full-time preparatory works and 58,172 persons were employed on part- time basis. Thus, during 1995-96, the handloom industry of the state was providing direct employment to 2.08 lakh persons as against 2.44 lakh persons during 1987-88. This shows that the handloom sector in Orissa has registered a marked decline in the post liberalization years.

Although Orissa is a traditionally non-cotton growing state, it has a substantial and numerically larger size of weaving population depending on handloom industry for their livelihood because of absence of industrial source of livelihood and the customary practices in the society. The Study Area The present study area is restricted to the block of Baraplli in Bargargh district and the nearby trading outlets at Bargargh, to understand the basic features of Marketing and related issues to it.

Sambalpuri handloom in the operational area: As Sambalpuri handloom is predominate in the area and the only source of livelihood for the weavers' community the study covers almost all the stakeholders associated to the sector. The handloom of Orissa, particularly woven by the weavers of District have been appreciated all over the Country and abroad because of its appealing form , workmanship design and color combination . The tie and dye design otherwise known as IKAT fabric, popularly known as “Bandha” technique in handloom weaving. Western Orissa has been the most appealing from of hand of weaving process with an intricate art of long tradition of excellence and craftsmanship, mainly woven in the district is a specific design which is only possible in manual labor.

The 17,133 weavers in the district mainly engaged in making of traditional Sambalpuri design of tie and dye sari and other dress material like dress materials, towel, napkin, door and window curtain, handkerchief etc. Eminent personalities like Late Sri Krutarth Acharya and Sri Kunja Bihari Meher of this district have been awarded with “Padmashree” for their outstanding contribution in Sambalpuri Tie & Dye methods. Out of 52 nos. of working Weavers Cooperative Societies of Bragarh district the Sambalpuri Bastralya Handloom coop. Society Ltd. having its headquarters at Bargarh, within the jurisdiction of un divided Sambalpur district then after it extended to K.B.K district and subsequently extended to coastal belt of Orissa, was organized by Dr. Padmashree Krutratha Acharya during the year 1954 There are about 6000 nos. of its regular wavers under 'A' class membership, working through its 49 nos. of Weaving Branches and numbers of Weavers coop. Societies from Western Orissa and 33 nos. of W.C.S from coastal belt . By this about 15,000 weavers are being provided with gainful employments below the poverty line category.

Social-economic profile of the weaver community: The lies between 200 43' to 2100 41' North latitude and 82 39' to 830 58' East longitude. It is one of the western most districts of the State of Orissa and came in to existence as a district from 1st April 1993 as separate district from Sambalpur. It is bounded on the north by the state of Chhatisgarh and on the east Sambalpur district, on the south lies Balangri and Subarnapur district and on the west is bounded with Nuapara district. . Bargarh district has an area of 5837 Sq. Kms with a population of 13.46 Million as per 2001 census, out of which 6.81 millions are male and 6.65 millions are female.

Bargarh District has two distinctly different kinds of scenario in the field of economic development one is agriculture and other one is handloom. The area under the Command area of Hirkud Dam has a fairly developed agricultural based livelihood practices. The rain fed area like Padampur Sub Division and Bhatli & Ambabhona Block of Bargarh Sub Division are backward with traditional agriculture and lack of development of other sectors as well. During the recent years there is an increased demand for other allied industries and service like Poultry, Diary becoming increasingly popular. Lacks of scope in service sector, the unemployed youth are evincing more interest in self- employment opportunities. Besides, traditional workers like potters, Blacksmiths, Construction Workers etc., there are fairly good presence of handloom weavers' concentrations in the district.

The Marketing Study: As discussed earlier, handloom being the second largest traditional livelihood sector in the district and more particularly in the operational area of the project. The current study intended to understand different aspects affecting the sector and more specifically the market chains mechanism associated with the sector. The study was conducted in the program area, with a objective to understand different key factors, channels and status in marketing of the Sambalpuri handloom sub sector.

The Process: The study process was initiated with a thorough visit to the secondary information available on handloom sector of Orissa followed by interaction with primary and secondary stakeholders associated. A questionnaire pertaining to the subject was also administered to collect information from primary source.

The Weaving Operation The sustainability of traditional weaving operation is greatly dependent on the prevailing market position, efficiency of management of the weavers' co-operative societies and production centers, availability of basic raw material-yarns, dyes etc. Though the sector is facing problems to survive and maintain its position particularly in the light of the serious challenge posed by advent of power looms and the organized mill sector, the weaving community still continues to struggle to maintain their livelihood by pursuing their traditional occupations. Many handloom co-operative societies and production centers are passing through the crisis situation caused due to competitive environment by the organized modern textile sector.

The present status of weaving operation and working of the looms, availability of raw material, utilization of weaving assets, modernization of loom and marketing of the handloom products have been studied during the process. It is important to note that in spite of growing competitions and pressure caused by the modern textile sector, and shortage/irregular availability of raw materials, almost all the weaver families met have still been continuing with their weaving operations to limited scale. Govt. assistance in terms of credit availability, supply of yarns and dyes, training and supervision, quality assurance and marketing support has been reflected in dwindling position of traditional weaving sector.

Supply of Raw materials The materials used for weaving the handloom products are of tools / machineries and raw materials. The majority of tools and machineries are of one time input, where as raw materials like yarns and colors are the variable items being used in a regular basis.

As Sambalpuri handloom is a traditional type of art most of looms being used are made out of wood and iron. Local craftsmen manufacture the loom and other ancillaries. While for raw materials the weavers depends on out side producers located at Coimbatoor and other south Indian towns. These raw materials are being procured by local traders through different agents. Most of the local trading agencies are located at Bargargh and Barapalli followed by other retailers in places like Smabalpur, Sonepur, Boudh , Manmunada etc. The weavers collect their raw materials either through these retailers or local weekly market at Balijhari and from regular retail shops in different location. Balijhari is a local weekly market where both producers and petty traders get assembled to sell out their produces and materials. The other major channel of raw material is the intermediary business men provides yarns and colours at the door step of the weavers with a understanding to get back the final products after providing the appropriate wage to the individual weaver, which varies from traders to traders and again based on design. While the last channel is the Weavers cooperative society. These societies provide raw materials to the member weavers and in turn collect the finished products through the society on piece rate basis with certain quality standard. Majority of the weavers prefer to adopt direct purchase of raw materials and sale their products through open market. As they don't able to meet the standards of the cooperatives and often fetch some extra margin. The payment mode of cooperatives also not suite to the producers as there is the practice of part payment.

Among the beneficiaries procuring yarns, the extent of dependency on co-operative societies as a source of supply has greatly decreased and most of the beneficiaries are now depending more on the local market for procuring yarns. Since inception, the co-operative societies have been playing an important role in making provision of yarns and dyes for their weaver members for maintaining a stable operation. In due course of time, the structure and performance of co-operative societies and production centers have significantly declined leading to dormancy in its business. The weaver co-operative society has failed to ensure steady supply of yarns and dyes to its members to maintain continuity in handloom operation. Majority weaver families associated with Cooperatives expressing their dissatisfaction on the performance of co-operative societies in the mater of supplying raw materials for their weaving activities. This mainly pertaining to irregularity in supply, inadequate quantity of supply and poor quality goods delivered. Often the quantity of supply of raw materials by the societies was much less than their requirement.

The cases of beneficiaries experiencing shortage of yarns and dyes needed for their weaving operation have been studied with regard to magnitude, frequency and reasons of shortage. About 65% of the surveyed weaver family reported facing shortage of yarns and dyes required for processing of their handloom product, at present. However, rest of the families reported that they did not face any shortage of yarns and dyes. The percentage of weaver families reporting shortage of yarns and dyes relatively belongs more to the c o-operative sector as compared to those not supported by co-operative sector.

Marketing Channels: As shown in the diagram here, unlike other products in the market yarn and colour have the same route of supply of raw materials. The manufactures of yarns have there wholesale agents in different locations and here in Bargarh operate through agents and retailers. These wholesalers have the capacity to procure and store huge amount of stock to have a control over the market. Two/three such wholesale outlets are present in Baragarh and Barpalli those are controlling the entire yarn business of the area. The retail outlets present in Bargarh, Barpalli and other places in the state are the intermediary market players who operate directly through retailing and agents. Producers (Weavers) meet their raw materials requirement either from these outlets, local markets or from agent. This mostly happens with non member weavers. The weavers who are members of Cooperatives are getting it directly through cooperatives and sales there finished goods through those institutions and in turn get there income either in shape of wage or piece rate approaches.

During the process, as opined by many 80% of the respondent, the weavers don't have any access or control over the yarn market, the income from the sector is in a declining trend. Because, procuring yarn depends on the volume and time keeping the stock. During the survey it was found that no weaver a have any idea about the source of raw material beyond wholesaler point.

Dye and dying materials are another product upon which the producers (Weavers) have any control. During the process it was also noted that majority of weavers have shown their unhappiness over the quality of the dye and its price fluctuation in the market. This basically occurred due to ignorance of market channels and control over the market.

Factory producing yarn and other

raw materials

Agents

Wholesale out lets in Bargarrh

Local Retail Weekly Market Cooperatives outlets out lets

Agents of marketin g houses

Producers

Production: The production of different types of woven goods, their size, price, sales etc. has been analyzed as presented. The volume of sales and value of the woven goods sold through to the co- operative societies/production centers and in the open market have also been discussed.

The volume of production of different category of woven products in terms of number of pieces produced of an average month have been calculated It is found that average number of pieces of Sarees produced in a month per weaver household is nearly 8. While production of Lungi, Gamchha and handkerchief varies from a range of 20 to 40 piece in production month. The cost of woven products produced per month per household has also been discussed. The average value of production of Saree per household per month shows is in a range of Rs. 3200/ - to Rs.6000/- depending on the factors like design, skill and labour diversification by the weaving household. It is also important to discuss here that the product diversification and use of advance tools and machineries plays a major role in production. The age old practices of hand weaving often restrict the income through production.

Marketing of the woven goods: The competitive pressure exerted by modern textile products has not created any perceptible change in the acceptance and choice of customer segment for handloom products. However, there has been significant change in the flow of handloom goods through different marketing channels. Due to functional restrictions of the weaver co-operative societies and production centers, majority of the weaver community has switched over to direct marketing through intermediary market agents in the open market or direct selling at local market outlets. There has been drastic decline in sale of handloom woven products through co- operative societies and production centers. The average monthly sales per household of handloom products in terms of pieces through co-operative societies have declined 3 as it was 15 earlier. The different channels of marketing can be better understood form the diagram presented.

Majority of respondents reported that growing consumer preference and test, in recent times, towards variety of modern fabrics has severely affected the demand for handloom items. Textile products being manufactured by organized spinning mills offer variety of designs of fabrics and attract more number of consumers, squeezing the market size for traditional handloom products. It also important to note that majority of the respondents felt that the handloom items being costlier than the modern textile items find it difficult to attract more consumer segment. The major cause is non production of low cost daily use saris in comparison with modern textile sarees available in the market. This restricts the handloom products with in segment of population and occasions. At present which forced the weaver community to explore ways and means to control the operational expenditure and to improve productivity in handloom industry. Provision of sustained supply of raw materials (e.g. good quality yarns and dyes etc.) can greatly aid in smoothening the operational crisis in handloom sector. Since advertisement plays an important role in the promotion of textile products, traditional handloom sectors find it difficult to mobilize and allocate required funds and investment on advertisement through mass media channels

THE MARKETING CHANNELS: Produce r

Local Cooperatives Retailer weekly Business Market house agents

Bastralaya Show room

Consumer

Issues: w As majority of the weavers household found to be poor and lack of access to mainstream financial institutions are not capable of keeping more raw materials and in turn fails in fetching more income w Raw materials being a monopolized item by few traders often affect the income of the weavers. w The traditional weaving equipments reduce the output and in turn affect income. w On organized raw material market w Though good quality of finished product fetches good return, which have standardized by the cooperatives, but absence of standardization of raw materials affects w Artificial shortage of raw materials affects production and reduces the income w Non availability of yarn and dying material at weavers point affect productivity w Individual centric approach in production and marketing of non member weavers THE EXISTING SUPPLY CHAIN:

BOYANIKA

WEAVER MARKET CO-OPERATIVE SOCIETY

MARKET

MASTER BUSINESS WEAVER SHG HOUSES WEAVER

RAW METERIAL RAW METERIAL

RECOMMENDED

MARKET

RAW

METERIAL Conclusion Considering the various relevant factors, issues and problems associated with handloom (More specifically Smabalpuri) and its consequential impact on the socio -economic condition members engaged following suggestions and recommendations can be persuade.

As most of the weavers operating on their own an apart from the handloom co-operative societies and production centers, it is recommended that raw material centers (May be Yarn and Dye banks) may be initiated at village level with a direct networking with spinning mill, wholesale merchants for raw materials. In the similar process SHG based sales outlets in a cluster can be developed to sale out the products with a standardize practice. Which could able to provide timely supply of raw materials and marketing of products in bulk.

Apart from marketing up gradation of traditional looms and equipments needs to be taken care of along with skill up gradation of weavers and master weavers.