Chapter 5 THE HANDLOOM COOPERATIVES: A DUBIOUS … 5.pdf · Chapter 5 THE HANDLOOM COOPERATIVES: A DUBIOUS PERFORMANCE Introduction After coir, the handloom industry has the largest

Chapter 5

THE HANDLOOM COOPERATIVES: A DUBIOUS PERFORMANCE

Introduction

After coir, the handloom industry has the largest cooperative

network in Kerala. The organisation of cooperative production units

in the handloom industry was the main strategy adopted at the all-

India level for protecting the handloom weavers from the

competition of modern textile factories right from the colonial

period and through the course of the various Five Year Plans.

Therefore, unlike in the coir and beedi industries, organisation of

handloom cooperatives in Kerala was primarily the result of the

industrial policy formulated at all India level. The exceptions

were the handloom cooperatives in north Kerala following demands

for cooperative reorganisation of the closed private sector

handloom units in the early fifties.

While appraising the growth and performance of handloom

cooperatives in Kerala the following features of the industry,

discussed in Chapter three, may be kept in mind. Hand loom, the

largest rural traditional industry in India, despite various

protective measures adopted by the government, was under severe

pressure right from the colonial period. This was mainly due to the

scarcity and rising prices of raw materials, declining demand for

hand woven clothes, and competition from powerloom mill industry.

Kerala occupies a minor position in the overall handloom scenario

in India, accounting for only 1.5 percent of the handloom

production1• We also noted in chapter three certain special

problems faced by the handloom industry in Kerala. Kerala is not a

cotton producing state, and its spinning mills cannot meet the

demand for yarn from its weaving industry. On the whole, the

handloom industry in Kerala is more backward with its products

heavily concentrated on coarser cotton yarns and low value

products2. But at the same ti~e, the proportion of household sector

employment is much lower than in the rest of the country. The wages

are relatively higher than in the neighbouring states. All these

contribute to reduce the competitiveness in the market. It is

within these severe constraints that the cooperative expansion has

been carried out.

In section 1 we discuss the origin and growth of handloom

cooperatives in Kerala. We are severely constrained by the absence

of reliable data. The available estimates about the number of looms

and output in the handloom industry vary between data sources. The

yearly data on the general growth of the handloom industry and its

different segments is available from 1967 in the publications of

the State Planning Board. Data on handloom cooperatives are

available from 1959 from the Reserve Bank of India publications.

Reports of periodic handloom censuses and reports of the Director

of Handlooms provide time point information. Piecing together

various kinds of information, it has been possible to delineate

certain broad trends and phases in the evolution and growth of

handloom cooperatives viz., their emergence during the colonial

period, the expansion during the fifties, stagnation since the mid

sixties, the collapse of the crepe boom in the latter seventies and

the phenomenal growth of the cooperatives during the eighties. We

pay special attention to the regional differences in the structural

176

growth of the cooperatives particularly in the northern and

southern districts of Kerala.

In section 2 we survey the organisation of production and

marketing in the cooperative sector. Two sets of issues are taken

up: (a) the various kinds of primary cooperatives and their

production strategies and (b) the functioning of the apex bodies.

Finally, in section 3 an overall evaluation of the performance of

the cooperative sector is carried out. We examine (a} if the

cooperatives have facilitated improvement of the wages and

employment of the workers and (b) whether the cooperatives are

financially viable? The entire discussion is based on secondary

sources of data. Published reports of research investigations

conducted by private individuals have also been used. For want of

data it has not been possible to undertake any rigorous analysis to

identify factors that determine the relative performance of the

handloom cooperatives. However, certain important qualitative

conclusions are drawn.

Section 1

The Growth of Handloom Cooperatives

(a) The Colonial Period

The state intervention to promote handloom cooperatives in

South India followed the recommendations of the textile expert

appointed by the Department of Industries of Madras government in

the early nineteen twenties, to organise and create handloom

cooperatives to undertake the preparation of warps to members and

177

create an organisation for regular disposal of weavers output3 • The

first handloom cooperatives in Malabar were set up as early as 1922

when two cooperatives of handloom weavers were organised by the

Devadhar Malabar Reconstruction Trust4• The Neeleswar Handloom

Workers Cooperative Society and Panthalayani Handloom Weavers

Cooperative Society that con~inue to function in the Malabar region

were set up in 1924 and 1925 respectively. 5 Government intervention

to tackle the problems of the handloom industry gathered momentum

when the Government of India allocated an annual subsidy of Rs.5

lakhs for cooperative development to the provincial governments in

1934. Evidence indicates that many weaving cooperatives in Malabar

like those at places like Telicherry, Kannadiparamba and Pudukode

paid higher wages to their weavers as compared to the earnings of

both independent and Karkhana (factory) workers6. During the

forties' especially during the Second World War there arose severe

shortage of yarn and many cooperatives were set up in Malabar under

government initiative to supply yarn to weavers7. The

cooperatives, which were organised during the war and the immediate

post war period, were rendered superfluous when the restrictions on

yarn supplies were removed and they were then converted to handloom

production cooperatives.

The handloom cooperatives in southern Kerala also emerged

during the third decade of the present century. But the spread of

the cooperatives was much more rapid in southern Kerala. By the

early nineteen thirties there were 14 weavers industrial

cooperatives in Travancore and 30 in Cochin State8 . Some pioneering

handloom cooperatives in the Travancore region like Balaramapuram

Handloom Weavers,Cooperative (1926) and Poomkode Handloom Weavers

178

Cooperative (1929) continues to function till date9. State

financial aid to cooperatives and state sponsorship of sales

outlets as recommended by the Travancore Cooperative Enquiry

Committee Report (1934) boosted the cooperative movement. According

to the ~945 Census of handlooms 39 percent of the 19327 weavers

worked within the 185 cooperatives 10 .

The above development in the handloom industry of Travancore

was in sharp contrast to the experience of the industry in Malabar

where the growth of the cooperative sector was much more

restricted. As shown in chapter 3 the handloom industry in Malabar

had by the 'thirties emerged to be one of the most developed in the

whole of India and the industry here, unlike in most other regions,

was characterised by the dominance of large private handloom units

utilising advanced looms and accessories and catering to national

and international markets 11 . Consequently, demand for intervention

of the Madras Government was relatively muted and consequently, the

cooperative sector remained relatively undeveloped. During this

period the activities of the large private handloom firms and the

cooperatives in Malabar remained largely complementary1 ~. This was

because the private handloom factories, especially the larger ones,

catered mainly to the outside markets both in India and abroad,

producing furnishings: towels r shirting r coating, bed linen and

spreads while the cooperative production generally catered to the

local markets and there was virtually no competition between the

output of the large private establishments and that of the

cooperatives.

179

Another important development during the colonial period was

the formation of three central marketing cooperative bodies for the

handloom cooperatives in all the three regions viz. Kerala Handloom

Weavers Cooperative Society at Calicut, the Handloom Department of

the Cochin Central Cottage Industries Society at Trichur and the

Travancore Sree M6olam Cent~al Cooperative Society at Trivandrum13 .

Of the three, the central cooperative in Calicut was the weakest.

As already noted Malabar was relatively backward in the development

of the handloom cooperatives in the colonial period. The Travancore

Sree Moolam Central Cooperative Society (TSMCCS) and the Cochin

Cottage Industry Cooperative Marketing Society (CCIMS) focused on

the distribution of yarn. The marketing of cloth was only of

secondary importance. The scope of TSMCSS activities was rather

more substantial in the sense that it also included supply of

weaving accessories to weavers through the primary cooperatives,

setting up standards for different types of handloom fabrics, the

prescription of a fair schedule of wages for weavers and the

collection, finishing (dyeing and printing) of handloom products 14 .

Both weaving and other cooperatives, especially those involved in

yarn trading and individuals, were enrolled as members of these

central cooperatives.

(b) The Crisis of the Fifties and the Response.

The Second World War period proved to be a phase of buoyant

demand conditions for the handloom industry. The mill sector

production was mostly reoriented to meet the war demand and the

demand for handloom products expanded in the domestic market. This

special condition ceased with the cessation of the war and the

entire handloom industry plunged into severe crisis. Consequently,

180

in 1952 the All-India Handloom Board, with comprehensive powers to

formulate policies to rehabilitate and consolidate the industry,

was set up and a countervailing excise duty was imposed on mill

cloth to meet the cost of development of the handloom sector15 .

Production of certain items of cloth was also restricted to the

handloom sector.

The crisis in the handloom industry in the early fifties had

a severe impact in Malabar with its very large factory type of

handloom establishments, which mainly catered to the outside

markets. Many large handloom factories in Malabar were closed down.

The workforce in handloom factories in Cannanore declined from

around 25000 to 1000016 . The result was the formation of a new type

of hand loom cooperative called hand loom weaver industrial

cooperatives. The scheme for the new cooperatives, which were

organised to provide employment to the workers of the closed large

private handloom establishments, was prepared by the Registrar of

Cooperatives of the Madras Government in 1954 and approved by the

Government of India in 1955.

The crisis in the handloom industry in Travancore, which had

a far less diversified product base, was equally acute. The result

was a substantial intervention by the Travancore government to prop

up the industry by setting up a large number of weaver

cooperatives. Many new primary handloom cooperatives were organised

by the Travancore Cochin government during the First Five Year Plan

period. Though there was no specific outlay for financial

assistance for handloom cooperatives in the First Five Year Plan of

the Travancore-Cochin state, Rs 27.33 lakhs were spent on various

181

handloom development schemes and advances were provided for raising

share capital and loans to the cooper a ti ves 17 . Funds were also

provided for conversion of throw shuttles and for giving a rebate

for the cloth marketed by the primary handloom cooperatives18 . Over

34,000 weavers were brought into the cooperative fold in Travancore

-Cochin by the end of the Fjrst Five Year Plan.

Thus, at the time of formation of the state in 1956 there were

about 313 handloom cooperatives of which 222 were in the Travancore

region19 . The southern districts of Trivandrum, Quilon and Kottayam

accounted for around 70 percent of the total number of handloom

cooperatives. The localisation of the handloom cooperatives in the

southern districts could thus be attributed to the large scale

government intervention in the region even before the formation of

the state of Kerala.

A major development at the end of the phase was the formation

of a single apex body for the handloom primaries in the state. The

three central marketing cooperatives that had emerged during the

colonial period had continued to function independently in the

three regions till 1960 when they were amalgamated under the State

Handloom Weavers Cooperative Society (Special Provision) Bill in

196020 . The membership of the apex body was restricted to

cooperative units. The need to coordinate the handloom development

activities in different regions of the state necessitated the

government intervention to set up a common central marketing

organisation and the initiative of the primary cooperatives in this

regard was very limited. The new apex body became known as Hantex.

182

(c) The Sixties: Stagnation and Decline

Table 1, which shows the estimates of looms in Kerala at

various time points by some important enquiries conducted in the

state clearly indicates the stagnation of the handloom industry

from the end of the fifties. The Minimum Wages Committee Report on

the Handloom Industry (1959) observed that over 46r000 loomsr out

of a total of one lakh to 1. 28 lakh looms ( ie. about 36 to 46

percent of the looms) had been brought under the 380 handloom

cooperatives. The statistics published by the Reserve Bank of India

broadly concurred with the data. It indicated that in 1959 there

were 382 weaver cooperatives in the state with 44083 looms and

51060 members (see table 2). The figures published by the

Government of India (Ministry of Commerce) in 1963 assessed the

total number of looms in the state at 109185 and that of the

cooperative sector at 49216 (ie. 45 percent).

Table 1

Relative Growth of the Cooperative Sector: Number of Looms

Sector 1959 1963 1969 I 1976 1984

( 1) (2) (3) (4) ( 5) (6)

Private 82000(64) 59969(55) 49965(70) 67482(75) 30942 ( 33) Cooperative 46000(36) 49216(45) 21353(30) 22548(25) 64058 (67) Total 128000(100) 109185(100) 71315 (100) 90030(100) 95000(100)

Note: Figures in brackets indicate percent to total

Source: Col. 2: Nair P V, Minimum Wages Committee Report for the Hand loom Industry, Government Press, Ernakulam, 1960 Col.3 : Government of India, Ministry of Commerce, Report of the Study Group on Handlooms, New Delhi, 1965 Col.4 and 5: Department of Industries and Commerce, Government of Kerala, Report of the Handloom Census 1976, Trivandrum Col.6 : Director of Handlooms, Government of Kerala, Report of the Survey on Primary Handloom Weavers Cooperative Societies in Kerala, Trivandrum, 1986 and State Planning Board, Economic Review 1984, Trivandrum, 1985

183

Table 2 Growth of Cooperative Sector

Year Total Number of Production Sale units Members Looms (Rs.'OOO) (Rs. '000)

( 1) (2) (3) ( 4) (5) ( 6)

1959 382 50064 44083 20246 44083 1960 390 51069 45144 22274 45144 1961 413 53356 45917 23560 45917 1962 413 51875 45411 23981 45411 1963 419 52559 48227 26462 48227 1964 422 53266 48243 24808 48243 1965 419 54552 49150 21761 49150 1966 417 55134 49427 26367 49427 1967 414 55119 50748 28026 50748 1968 424 52737 51403 30915 51403 1969 1970 1971 425 66998 42862 40182 40371 1972 360 51242 28440 28123 30053 1973 1974 372 52968 17300 40496 31285 1975 1976 427 53470 29882 48875 60200 1977 426 55009 44992 45403 68712 1978 370 64967 41580 126017 63399 1979 1980 1981 411 70339 50698 125899 46322 1982 555 71589 42000 162387 165405 1983 564 75582 45030 188044 188000 1984 578 73408 48985 224200 224000 1985 578 73054 54000 250000 240000 1986 578 83380 55000 300000 289100 1987 1988 585 84000 58500 330000 350000

Source: Reserve Bank Of India and National Bank of Agriculture and Rural Development, Statistical Statements Relating t.o the Cooperative Movement in India, Bombay (various issues).

The first census of handlooms conducted in 1968 indicated a

drastic reduction in the number of looms in both the cooperative

and private sectors. It enumerated the total number of looms in the

state to be 71325 of which only 21355 (30 percent) were in the

cooperative sector. The second census of handlooms in 1976 revealed

an improvement in the total loomage to around 90030 the expansion

being mainly confined to the private sector so that the share of

the cooperative sector came down further to 25 percent.

184

The data from the Reserve Bank of India broadly confirm the

above trend21. The increase in the number of cooperatives and looms

sharply decelerated in the sixties and then sharply declined in the

early seventies as some dormant cooperatives were weeded out from

the registers.

The estimates of the State Planning Board in table 4 differed

from that of the Reserve Bank of India. Surprisingly, there was no

reduction in the number of cooperatives during the first half of

the seventies. But the cooperative production declined from 423

lakh metres in 1967 to an all time low of 198 lakh metres in 1978.

The production in the private sector also broadly followed the same

trend. As a result, the total production in state seemed to have

declined by 43 percent between 1967 and 1978. We must caution that

not much reliance should be placed on the above figures. For, these

were indirectly estimated from the estimates of yarn supplied to

the handloom sector in the state based on certain assumptions of

productivity of looms. But it would be safe to accept it as a

further confirmation of our statement of the stagnation and decline

in the total handloom production and cooperative production upto

the early seventies. However, the State Planning Board estimates,

unlike other sources, seems to indicate that this phase of

stagnation continued into the latter seventies.

185

Table 3

Growth of the Handl0011 InduStry

Year Cooperative Sector Private Sector Industry Total

No.of No.of Prcduction No.of Production Total Total Prcduction coop. lams Qty. Val. lJXlns Qty. Val. lJXlns Qty. Val. units lk.mts lk.Rs lk.mts lk.Rs lk.mts lk.Rs.

.. (1) (2) (3) (4) (5) (6) . (7) (8) (9) (10) (11)

1967 409 423 508 952 1428 1375 1936 1968 416 378 482 839 1308 1217 1790 1969 416 394 551 868 1579 1262 2130 1970 420 385 562 708 1204 1093 1766 1971 423 386 451 805 1391 1191 1842 1972 428 387 659 793 1429 1180 2088 1973 438 386 637 769 1384 1155 2021 1974 443 357 750 482 1685 839 2435 1975 462 297 902 1976 462 236 883 320 1330 556 2213 1977 472 219 678 650 2500 869 3178 1978 472 34108 192 689 60642 594 94750 786 1979 484 39000 234 960 56000 580 95000 814 1980 510 35000 290 1200 60000 600 3000 95000 890 4200 1981 535 39000 305 1525 56000 595 2975 95000 900 4500 1982 555 43000 330 2200 52000 477 95000 807 1983 564 45000 374 2200 45000 440 1900 95000 814 4100 1984 565 49000 390 2400 46000 380 1905 95000 770 4305 1985 578 54000 425 2650 41000 400 2500 95000 825 5150 1986 578 57000 425 3000 38000 405 3924 95000 830 6924 1987 580 58000 504 3149 37000 410 4050 95000 914 7199 1988 581 58700 532 3250 36300 420 2450 95000 952 5700 1989 590 58700 599 4190 36300 420 2550 95000 1019 6740 1990 592 40241 430 4300 5254 100 800 95000 5515 5458 1991 607 40591 435 4350 5048 960 1440 95000 6146 8187 1992 604 40979 452 4525 5260 910 1637 95000 5528 9920 1993 605 43472 486 4860 5385 969 2910 40970 5917 12812

Soorce: Col. 2 Director of Handlocms, Government of Kerala, ReiXJrt of the Survey on Primary Handlron 'Weavers Cooperative Societies in Kerala, 'l'rivandrum, 1986 and State Planning Board, Econanic Review, 'l'rivandrun, (various issues) Co1.3 to col.8, State Planning Board, Government of Kerala, Econanic Review, (various issues)

An important aspect of the phase of stagnation was its

regional variation. The decline was severe in the southern

districts. The northern districts particularly Cannanore, exhibited

a remarkable dynamism in innovation of a new product called 'crepe'

whose export demand expanded at a phenomenal rate 22 . The leadership

for the innovation was taken by the Cannanore large scale handloom

firms. But soon the entire regional industry was geared to crepe

186

production. Nearly 70 percent of the production capacity of the

district, at the height of the boom, was utilised for crepe

production. The crepe boom in the early seventies resulted in rapid

expansion of capacity in northern Kerala (see table 4).

Table 4

Growth of Handlcan Industry Between 1%8-76: Inter-District Variation

District Total Industry % Cooperatives % Share of idle loons No of loans cha No of loons chan Total industry Cooperatives

1968 1976 nqe 1968 1976 ge 1968 1976 1968 1976

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

Trivandrum 17900(25) 19234(21) 12 6250(29) 5235(23) -16 23 23 24 26 ~ilon 61/7 (9) 4163 (5) 2 2953(14) 3131(14) 7 37 23 35 21 Alleppey 1414 (2) 832 (1) -26 476 (2) 412 (2) -13 37 46 29 36 Kottayam 1187 (2) 892 (1) -32 568 (3) 635 (3) 12 16 39 21 37 Ernakulam 2924 (4) 2627 (3) -21 1791 (8) 1898 (8) 6 15 15 8 10 Trichur 2117 (3) 1940 (2) 7 765 (4) 992 (4) 30 17 20 11 14 Palaghat 5276 (7) 4354 (5) -27 3898(18) 3408(15) -13 16 27 17 23 Mallapuram 1217 (2) 1498 (2) 50 214 (1) 396 (2) 85 14 9 6 7 calicut 5514 (8) 14318(16) 208 1m (8l 2873(13) 62 14 12 13 10 Cannnanore 27492(39) 40144(45) 82 2661(12) 3568(16) 34 36 19 34 5 Kerala 71318(100 90030(100) 40 21353 (100 22543(100) 6 27 19 23 18

Source:Saloo as 'I'allle 1

Between 1968 and 1976 the total industrial capacity in Kerala

increased only by 26 percent from 71325 units to 90030 looms. In

almost all districts other than in the three northern districts the

number of looms declined. Trivandrum registered only a marginal

increase of 7 percent. In contrast, the number of looms in

Cannanore increased by 46 percent from 27492 to 40144. The

proportion of idle looms also declined sharply from 36 percent to

19 percent in Cannanore.

The expansion of the cooperative sector was also largely

confined to the northern districts. The looms in Trivandrum

district declined by 15 percent. As a result, the share of looms in

the cooperative sector in the three northern districts increased

187

from 21 percent to 31 percent. However, it was ..._ ,_ - - --.! --- ~ - - - - ..._ - --l.Ue !J.L.LVctl.e :se~.,;l.v.L

that proved to be more responsive to the crepe boom and accounted

for the major proportion of the increase in loomage. As a result

even in the northern districts of Cannanore and Calicut the share

of cooperative loomage declined significantly between 1968 and 1976

(see table 4).

(d) The Dubious Expansion of the Eighties

It would appear from the estimates of handloom production made

by the State Planning Board that there was an improvement in the

production from the latter seventies. The production increased from

556 lakh metres in 1976 to 1019 in 1989 (see table 3). The data

provided by the Reserve Bank of India also confirm the above trend.

Apparently, it was the buoyancy of cooperative production that

accounted for the remarkable recovery. The share of cooperative in

production that averaged at 33 percent in the first half of the

seventies steadily tended to rise and it accounted for 58 percent

in 1989.

In value terms, the output of the cooperative increased by

four times between 1975 and 1990. Three factors contributed to the

phenomenal expansion of value of the cooperative sector. Firstly,

the unit value of cooperative output increased from Rs 2 in 1974 to

Rs 7 in 1989. It appeared that there was greater diversification

of the product range of the cooperative towards higher value added

dhotis and saris from traditional towels 23 • Secondly, the

production per loom also tended to rise rapidly within the

cooperative sector. The loom productivity in the cooperative sector

.increased from 563 metres in 1978 to 1020 metres in 1989. On the

188

other hand, the loom productivity in the private sector fluctuated

around 1000 metres throughout the period. Thirdly, there was also

a phenomenal expansion in cooperative looms; The number of looms

increased from 22500 looms in 1976 to 64058 looms in 1984. In

contrast, the number of private looms drastically declined. The

share of cooperatives in the total looms in the state was estimated

to have risen to a record level of 71 percent in 1984.

~able 5

Growth of the Handloot Industry Between 1976-84: Inter District Variations

~otal Industrv I Cooperative sector I Share of idle looms !District ~ f 1 It b I H f 1 1% h I T t 1 • d t I c t' t

l . 0 0 OOIS c - 0 0 OOIS c - o a 1n us rv oopera 1ve sec or

I anqe \ lange i 1976 1984 1976 I 1984 1976 1984 1976 1984

(1) ( (21 ( 31 14) (51 I (61 ( 71 I ( 81 ( 91 ( 101 ( lll

j'lrivandrual19234(211 21000(221 5235(2311 27280(431 I I

9 421 23 na 26 34

1 Quilon f 4163 (51 4770 (51 15 3131(141! 6457(10) 109 I 23 na 21 30 IAlleppey 832 (1) 1025 (1) 23 412 (2) I 8 20 ( 11 99 46 na 36 39 Kottaya1 j 892 (11 1480 (21 66 635 131 1417 (21 123 39 na 37 21 I !rnakulaJ 2622 I 11 4080 (41 55 1898 (8) 4753 (91 150 15 na 10 22 'lrichur 11940 (21 2420 (31 25 992 141 2035 (31 105 20 na 14 31 Palaqhat 4354 151 4800 (51 10 3408115) 6506(101 91 27 na 23 37

IKallapurall) 1498 !21 1563 (21 4 396 12 l I 1104 (21 178 I 9 na 7 47 . I

jcalicut 14318(161 1470011511 3 2873113\ I 64571101 124 12 na 10 51

1cannnanore)40144(45) 392001.411 -2 3568!16\1 11o9i111 I 99 19 na 5 43

lKerala i90030(100 95038 (100 \ 6 225481100! 64058(100)1 184 19 na 18 35

Source: Department of Industries and Conerce, Government of Kerala·, Report of the Handloom Census 1976, Trivandrum: Director of Handlooms, Governaent of Kerala, Report of the Survey on Primary Randloot Weavers Cooperative Societies in Kerala, Trivandrum, 1986 and Rajaqopaian V, The Handloom Industry in North and South Kerala: A Study of Production and Marketing Structures, M Phil Thesis, Centre for Develop111ent Studies, Trivandrus, 1986

The expansion of the cooperative sector was a policy response

to the crisis in the handloorn industry. In Cannanore district the

collapse of the crepe boom proved to be calamitous. The demand for

crepe sharply declined partly in response to substandard products

exported by unscrupulous elements 24 • And to make the matters worse

a large proportion of the demand carne to be met by the Tamil Nadu

powerloom industry. The handloom in Cannanore found it difficult to

compete in the market. The crisis was so serious that the

189

government was forced to order a special survey of non household

units in Cannanore district in 198125 . The 1981 survey revealed

that 860 units had closed down, 63 percent of the looms were idle.

According to the 1976 census the number of idle looms was only 21

percent. The number of weavers in the non household sector had

declined from 20746 to ~0875 between 1976 and 1981.

The trade union movement in Cannanore was vociferous in

demanding the rehabilitation of the industry on a cooperative

basis. We already noted how industrial cooperative carne into being

in Cannanore as a response to the industrial crisis of the fifties.

The number of looms in the cooperative sector doubled between 1976

and 1984. The most spectacular increase was, however, in Trivandrurn

district, where the number of looms in the cooperative sector

increased by more than four fold (see table 5). As a result, the

share of Tri vandrum in total cooperative looms increased to 4 3

percent. In the other districts too, the number of looms in the

cooperative sector increased by 100 to 150 percent during the

period.

The increased emphasis for cooperative expansion in the

handloom policy of the government was the prime factor beh:nd the

generalised spurt in the growth of cooperatives. The High Level

Committee (headed by B Sivaraman) after a thorough examination of

the problem of the handloom industry recommended in 1974 to double

the cooperative sector share of looms to 60 percent looms 3t the

national level as the Fifth Plan target26 . A scheme to rehabilitate

the handloorn cooperatives was modelled on the basis of the

agricultural credit cooperative rehabilitation scheme and a special

190

cell was organised in the Commerce Ministry to oversee its

implementation27 . The scheme emphasised the supply of inputs and

product marketing through closer interaction between the primary

and apex handloom cooperatives. Handloom development also received

serious attention in the Twenty Point Programme announced by the

Government of India in 1975 and 198228 .

The state government fixed a target of 60 percent of the

handlooms to be brought into the cooperative sector by the end of

the Sixth Plan29 • The Seventh Plan target was further raised to 90

percent 30 • With central assistance the rebate on hand loom

production was raised to 20 percent during the festival seasons.

Financial assistance to the primary and apex cooperatives was

stepped up. From the Fifth to the Eighth Plan the rebate and

marketing assistance accounted for 40 percent of the total Plan

outlay 31 . Around 48 percent was spent on financial assistance to

cooperatives. Twelve percent was allocated for the Handloom

Development Corporation. The Corporation Wrts established for the

promotion of private sector but in actual practice its main work

turned out to be establishing and moni taring export oriented

cooperatives of its own under the Intensive Handloom Development

Schemes 32 . Above all, special funds were also made available

through the cooperative banks under Reserve Bank scheme for

handloom refinance.

The ambitious targets fixed by the planners and the vigorous

promotion measures of the government underlay the rapid expansion

of the cooperative sector from the mid seventies. However, there

are reasons to believe that the estimates of cooperative looms in

191

1984 are an overstatement and that there is a strong element of

exaggeration in the official statistics of cooperative growth.

According to the cooperative's census of 1984 the share of

cooperative looms increased from 25 percent in 1976 to 71 percent

in 198433. In contrast, the State Planning Board data presented in

table 3 indicated that a~ though the proportion· of looms in the

cooperative sector were rising, it was only 52 percent in 1984. It

further estimated that the share of cooperative sector looms

increased to only 62 percent even by 1989.

Table 6

Composition of Looms in Cooperative Sector

Looms 1976 Coop. Net addition sector to coop.

Coop. Private Total 1984 sector sector sector in 1976-84

( 1) ( 2) ( 3) ( 4) ( 5) ( 6)

Pit looms 7889 9985 17874 27426 19357 Frame looms 14659 57497 72156 35671 21012 Other looms 0 0 0 961 961 Total looms 22548 67482 90030 64058 41510

Note: Coop. = cooperative Source: Department of Industries and Commerce, Government of Kerala, Report of the Handloom Census 1976, Trivandrum and Director of Handlooms, Government of Kerala, Report of the SurvAy on Primary Handloom Weavers Cooperative Societies in Kerala, Trivandrum, 1986.

Another reason to suspect the figures of the cooperative

census of 1984 is the major contribution that the technologically

backward pitlooms seem to have made to the cooperative expansion

(see table 6). While in 1976 only around 10000 pitlooms existed in

the private sector the 1984 survey claimed a net addition of 19357

pi tlooms in the cooperative sector 34 . And further 42 percent of

this increase occurred in one district namely Trivandrum. One could

understand the incorporation of the existing pi tlooms to the

192

cooperative sector. But net addition of such a large number of

these outmoded looms to the production capacity defies commonsense.

Finally to cap it all, district-wise estimates of looms in the

cooperative sector as revealed by the 1984 cooperative census do

not tally with disaggregated district data on total looms for each

district. In four districts the number of looms in the cooperative

sector exceeds the total number of looms! 35 In Trivandrum district

the mismatch is high as 30 percent. The above mismatch and the

improbably large increase in the number of pitlooms in Trivandrum

district gives credence to repeated newspaper reports of large

inflation of number of cooperat~ve looms in the eighties. We shall

come back to this point in section 4.

The national Census of Handlooms done 1n 1987-88 placed the

total number of looms in the state at 51629 36 . But district-wise

information is not available. The report does not give the number

of looms in the cooperative sector. According to the report out of

the 46092 weavers in the state 62 percent worked in the cooperative

and related sectors 37 . Disaggregated district level data for the

state has not been so far ~ade ~vailable. Meanwhile, the Handloom

Directorate has re-estimated the number of looms in the state. The

re-estimates show that the nur<oer of looms in the cooperative

sector was only 40979 in 1991-92 and that it increased to 43472

looms in 1992-93 38 . The cooperative sector accounted for 79 percent

of the looms in the state in 1992-93.

193

Section 2

Organisation of Production in the Handloom Cooperatives

A distinguishing feature of the handloom cooperative structure

in Kerala is the significant presence of non household production

(see tableS). The non household sector employed only 29 percent of

the weavers in Kerala compared with 5 percent at the national

level.

Table 7

Structure of Employment of Full Time Weavers: 1987-88

Organisational Kerala IKarnatak Tamil Andhra India structure / -a Nadu Pradesh

( 1) ( 2) l ( 3) ( 4) ( 5) ( 6)

(i) Private Sector I I I

(a)Independent weavers! 15.3 I 42.7 4.7 41.1 54 (b)Master weavers 10.8 I 16.3 35.2 28.6 29.7 (c) Private firms 10.8

I 8.3 110.5 6.7 6.1 I

(ii)Cooperative sector 52.4 I 12.1 46.2 21.9 20.5 I I

(iii) Quasi Government I I (a)SHDC 2.6 I 17.2 0.1 0.2 2 (b)KVIC 7.9 I 3.1 3.1 1.2 2

I Total 100 I 100 100 100 100

Note: SHDC = State handloom Development Corporation; KVIC = Khadhi and Village Industries Commission Source: Ministry of Textiles, Government of India, Census of Handlooms in India 1987-88, New Delhi, 1990

The census data of 1961, 1971 and 1981 though not strictly

comparable (only main workers are enumerated in the latter two

censuses) give a broad indication of growth of non household sector

in the industry. According to the census non household employment

in the handloom industry increased from 32 percent in 1961 to 45

194

percent in 1971 and further to 51 percent in 198139 . The handloom

census of 1968 and 1976 indicates that for total workers in the

handloom industry the share of employment in non household sector

increased from 42 percent to 49 percent during the period; For

weavers the share of non household sector employment increased from

47 percent to 53 percent40 . In short, the process of cooperative

expansion was accompanied by an increase in the average scale of

production in the handloom industry41 .

Table 8

Distribution of Looms in Household and Non household Sectors

Sector Kerala Karnatak Tamil Andhra India I -a Nadu Pradesh

( 1) ( 2) ( 3) ( 4) ( 5) ( 6)

Household sector 71 91 88 95 95 I Non household sector 29 9 12 5 5

Total looms 100 100 100 100 100

Source: Ministry of Textiles, Government of India, Census of Handlooms in India 1987-88, New Delhi, 1990

Thus, there are two distinct sectors within the cooperative

structure; the household based cooperatives and the factory based

cooperatives. One could also speak about weaving centres called

clusters that were part of the intensive handloom development

project. In 1984, 17 percent of the working cooperatives in the

state were of the factory type42. We briefly examine the

organisation of production within these two types of cooperatives

and their implications.

Household based cooperatives:

Traditionally, the weaver's household working independently or

under master weavers was the predominant unit of production.

195

Cooperative intervention right from the inception attempted to

maintain the decentralised production structure. It meant minimum

break with the tradition, saving on overhead charges required for

a centralised production system, facilitated greater participation

of family labour and maintained the link of the production rhythm

to the household chores.· All these helped to keep the cost of

production low. Even in 1987-88, 49 percent of the handloom workers

in India were engaged on a part time basis in the industry43 .

The cottage industry cooperatives provided the raw materials

in its basic or processed form to the weavers. The handloom

manufactured was marketed either by the weavers themselves or by

the cooperatives. The relations between weavers and cooperatives

was of two kinds viz., trade or wage systems. In the latter the

weavers in the household would be paid piece rate wages for output

produced while in the former the difference between raw material

and output prices would be the earning of the weaver. In the trade

system the raw materials are provided on credit and later deducted

from the product price.

The handloom cooperatives in Kerala are organised under the

wage payment system. The weavers are supplied dyed yarn and the

household weaver is responsible for winding, warping, sizing and

other preparatory processes apart from weaving. He may engage his

family members or even wage labourers to attend to the preparatory

processes. He has to supply cloth equivalent to the weight of yarn

supplied by the cooperative and he would be paid wages by the

weight and count of yarn4 4.

196

Recently, the primary cooperatives have been setting up

- . collective processing centres to undertake the finishing processes

as well as preparatory processes 45 . In such cases the wages to be

paid to weavers working in their own household tend to be reduced

to near piece wages rate for weaving a lone. At times 1 imi ted

weaving activity is also organised at these collective centres for

the weaving specialised products. This trend has also contributed

to the growing importance of non household handloorn units in

Kerala.

The cottage industry cooperatives are the dominant segment of

the handloom cooperative. In 1961, 97 percent of the cooperatives

in the state belonged to this category46 • Though the share of these

cooperatives has decreased to 83 percent they continue to be the

dominant .form of cooperative • • 4 7 organlsatlon The heaviest

concentration of these cooperatives is in Trivandrum district where

they accounted for 89 percent of the working cooperatives 48 . They

largely catered to the needs of the local market and rna inly

produced dhothis, mundu and Kasavu products.

Weavers Industrial Cooperatives

The production organisation in these cooperatives, on the

basis of detailed division of labour, is similar to that of the

large handloom factories. The production is carried out in the

weaving establishment of the cooperative. Every stage of the

production process from purchase and processing of raw material to

marketing of final output is centrally planned, moni tared and

executed. Weavers and most of the workers are paid piece rate

197

wages. The main advantage of these cooperatives, though they

required higher investments in dapitai, was that they ~ere better

geared to produce quality products and were more favourably

disposed to introduction of new technologies, process and designs.

There is a remarkable contrast between the product mix of the

industrial cooperatives from the cottage type units. As seen in

table 8, 23 percent of the output of the cooperatives in Cannanore

was for the export market (mostly for furnishing materials). The

export market products were negligible in the out turn of the

cottage handloom cooperatives. For the handloom industry in the

state as a whole only four percent of the output was being

exported. The cottage hand loom cooperatives have continued to

produce age-old hand woven varieties like dhotis and towels. They

do not seem to have any production strategy of their own to respond

to changes in market demand.

Table 9

Commodity Composition of Output (%)

Product Cannanore All Kerala Kerala handloom cooperatives cooperatives industry 1983-84 1983-84 1987-88

( 1) ( 2) ( 3) ( 4)

Dhothi 6.37 I 29.00 31.00 Saris 5.99 6.00 5.00 Bed sheet 4.34 I 4.00 5.00 I Furnishing 4.63 I n.a. I 4.00 Shirting 12.99 9.00 I 7.00 I Towels 2.33 17.00 I 18.00 Lungis 21.03 13.00 20.00 Others 19.06 21.00 5.00 Export variety 23.24 n.a. 4.00 Total 100 100 100

Source: Col. 2 Rajagopalan V, 1986, Col. 3 Director of Handlooms, 1986 and Col.4 Government of India, 1990

198

The weaver industrial cooperative form of production units, as

mentioned in section 1, was organised in Cannanore district in the

mid fifties following the closure of private handloom factories49.

More were later organised under the various Plan schemes. Though

they accounted for only 17 percent of the handloom cooperatives in

the state in 1984 ·they were mostly concentrated in Cannanore

district. However, 56 percent of the working handloom cooperatives

in the district were weavers industrial cooperatives50 • Of late,

many larger cooperatives in Trivandrum district have come forward

to centralise production by setting up common work sheds and

upgraded looms to produce new products like bed sheets and mosquito

nets, drill cloth and polyester blended fabrics 51 • The bet.ter

functioning of the weavers industrial cooperatives are evident from

the fact in 1984 only 3 percent of them were dormant or under

liquidation in the state while 27 percent of the cottage industry

weavers cooperative were dormant or under liquidation 52 • However,

no data is available on the differences in profitability between

the two cooperative production organisations.

Cluster Units

Cluster refers to groups of loom owning and self-employed

weavers organised together to avail of employment opportunities

using the raw materials provided by the Kerala State Handloom

Development Corporation53 • The project head quarters provide the

dyed yarn to the supply and procurement centres of each cluster

group. The clusters, which are under the supervision of a quality

control inspector, supplied the yarn and the product specification

to the weavers. The product woven in a cluster depends upon the

199

type of looms and the specialisation of the weavers in the

different clusters and the production programme prepared by

Hanveev. The production plans are prepared in consultation with the

quality control inspector who forms the link between the cluster

and project headquarters. Collective facilities for processing are

made available to the weavers. The wages are paid after deducting

the yarn costs.

Thus, the household weaving units are not independent weavers

but sub contractors of the corporation and the corporation is not

an elected body of the household units. Therefore, the clusters

cannot strictly be considered as part of the cooperative sector.

Though the weavers primarily depend upon the clusters for work they

may sometimes produce output for other buyers depending on market

demand. The clusters are set up under the Intensive Hand loom

Development Project. Usually, each cluster provides employment for

50 to a hundred workers. Hanveev innovated cluster organisations to

save on the overhead costs. As production was done in worker

households it helped save on investment in work sheds and looms.

While clusters facilitated a greater extent of centralised

intervention in the production sphere as compared to cottage type

handloom cooperatives. The cluster organisation thus combined the

advantages of both factory type and cottage type cooperatives and

helped reduce costs.

The comparatively higher share of larger production units in

Kerala would have contributed to the higher cost of production and

eroded its competitiveness. Thus the cooperative units even in

northern Kerala, despite its diversified product structure is

200

handicapped by its relatively higher cost structure. Ag noted by

the minimum wage's committee of 1959 and 1972 the relative wages

were higher than the neighbouring state and the rest of Kerala 54 .

The main reasons for the higher wages in Cannanore and other

northern districts are two fold: (a) the presence of large scale

units and superior technology and (b) a strong trade union movement

among the handloom workers 55 • Compared to northern Kerala the trade

union movement was relatively weak in the rest of Kerala. The

scattered nature of the household units and relatively higher

incidence of self employment inhibited the growth of trade union

movement in the southern districts.

The wage rates in Cannanore escalated in the crepe boom

period. The rapid expansion of the industrial capacity and the

buoyant demand conditions enabled the trade unions to significantly

raise the wages and expand non wage benefits. Thus, for example

between 1972 and 1984 the labour cost of production of one metre of

lungi almost trebled from Rs 1.57 to Rs 4.64 56 • The higher wages

in Cannanore have been a pace setters for the general wages in the

industry for the state as a whole. But the wage rates in Cannanore

have stayed in the lead. Wage costs in Cannanore were around 35

percent higher than . q Trl vandrumJ . Yet another study of the

comparative cost structure of Cannanore and Trivandrum has

documented the relatively higher wage costs in the northern

districts 58.

With the collapse of the crepe boom Cannanore was severely

handicapped in reorienting its production to more traditional items

as the wages proved to be downward sticky. It was an important

201

factor that contributed to the post crepe boom crisis in the

handloom industry of Cannanore. The higher wage costs in Kerala

made it difficult for the industry to penetrate or retain the

domestic markets in other states. It was the production of crepe

with cheap labour from Tamil Nadu that lead to the complete

eclipse of crepe producti9n from Cannanore 59 • Moreover, the

handloom industry in Tamil Nadu has captured a significant

proportion of the handloom markets in Kerala primarily due to itg

cost advantage.

The import of textile products 1n Kerala increased from Rs

37.76 crore in 1975-76 to Rs 51.03 crore in 1980-8160 . We do not

have a separate estimate for the import of handloom products. But

it has been estimated that handloom goods worth Rs 15 to Rs 16

crore have come into Kerala annually through road alone during the

period. This would work out to be 40 to 65 percent of the value of

handloom products manufactured within Kerala.

Section 3

Marketing of Handloom Cloth

As with many other traditional industries an important problem

faced by the handloom industry in Kerala has been in finding market

outlets for the goods produced. Apart form competition from the

mill sector, the handloom industry in Kerala is also handicapped by

the competition from the cheaper handloom products from the

neighbouring states, especially Tamil Nadu.

202

Consequently 1

the interventions of the government for the

protection of the handloom industry have emphasised the setting up

of marketing facilities as an important component of the industrial

reorganisation schemes. We have already noted how the regional

central marketing cooperatives that emerged in the colonial period

were amalgamated into a single state wide organisation by th& end

of the second Five Year Plan. We first review the success of

marketing operations of the cooperative apex body.

Kerala State Handloom Weavers Cooperative Society

The first point to be noted is that the membership coverage of

the apex body has not extended beyond 70 percent of the handloom

cooperatives in the state. The aggregate data for the 1967-89

period indicated that while the absolute number of Hantex members

increased from 286 to 3861 percent share of Hantex members in total

primary handloom cooperatives declined from 70 percent to 65

percent during the period (see table\0). The failure of Hantex to

enrol a significant segment of cooperatives into its network may

point to the relative unimportance attached to the operations of

the central marketing agency by many cooperatives.

Despite the increase in the number of cooperatives availing of

marketing facilities of Hantex from 158 to 311, (ie. from 55

percent to 81 percent of the membership) I during the period 1967-

891 the total share of cooperative output marketed through Hantex

declined in the eighties (see table 1t).

203

Table 10

Relative Position of Hantex in the Cooperative Sector

Year Total No of % Share Coop.units % Share coop. Hantex of col.3 from which of col.S units member to col. 2 cloth proc. to col.3

units by Hantex

(1) ( 2) . (3) (4) ( 5) (6)

1967 409 286 70 158 39 1968 416 1969 416 297 71 183 44 1970 420 302 72 207 49 1971 423 1972 428 305 71 209 49 1973 438 307 70 192 44 1974 443 320 72 190 43 1975 462 325 70 216 47 1976 462 328 71 236 51 1977 472 330 70 237 50 1978 472 336 71 244 52 1979 484 339 70 220 45 1980 510 341 67 232 45 1981 535 H-8 63 262 49 1982 555 343 62 266 48 1983 564 358 63 274 49 1984 565 368 65 268 47 1985 578 371 64 268 46 1986 578 372 64

. 1987 580 380 65 300 52 1988 581 382 66 310 53 1989 590 386 65 311 53

Note: Coop. = Cooperative; Proc. = Procured Source: Mridul Eapen, Hantex: An Economic Appraisal, Working Paper No 242, Centre for Development Studies, Trivandrum, 1991

The data show that the cloth procurement by Hantex increased

from 48 lakh metres to around 80 lakh metres in the latter half of

the seventies. In the post crepe boom crisis Hantex sharply stepped

up the procurement that peaked at 131 lakh metres in 1983. Since

then procurement has stagnated at around 100 lakh metres. As a

result, the share of Hantex procurement in cooperative production

that averaged around 40 percent between 1977 and 1981 has tended to

decline. In 1989 Hantex procurement accounted for only 15 percent

of the cooperative output. (As a word of caution, it should be

mentioned that it is likely that the estimate of handloom cloth in

204

the cooperatives are overestimated for reasons already stated. To

that extent, the decline in the share of cloth procured is also

exaggerated. But there is no reason to doubt the veracity of the

absolute decline in the procurement of Hantex in the late

eighties).

Table 11

Cloth Procurement and Yarn sales of Hantex

Year Total Quantity Total Value of cloth of cloth prod. cloth produced procured proc. proc. lakh mts lakh mts % lakh Rs.

( 1) ( 2) ( 3) ( 4) (5)

1967 423 48 11 57 1968 378 61 16 78 1969 394 59 15 82 1970 385 60 16 86 1971 386 1972 387 76 20 129 1973 386 68 18 112 1974 357

I 81 23 169

1975 297 75 25 228 1976 236 52 22 196 1977 219 88 40 273 1978 192 81 42 291 1979 234 86 37 351 1980 290 124 43 512 1981 305 129 42 644 1982 330 113 34 750 1983 374 131 35 770 1984 390 106 27 651 1985 425 103 24 641 1986 425 95 22 667 1987 504 125 25 782 1988 532 118 22 717 1989 599 91 15 633

Note: Proc. = Procure; Prod. = Produced Source:Same as Table 10

Value of Yarnsale Real Yarnsale yarn as % of value as % of sold cloth of yarn coop. lakh Rs. proc. sold prod.

(6) (7) (8) (9)

33 58 39 6 43 55 46 9 57 70 68 10 82 95 94 15

56 43 54 8 205 183 193 32 467 276 355 62 166 73 120 18

89 45 69 10 156 57 114 23 165 57 99 24 157 45 93 16 210 41 108 18 235 36 113 15 240 32 112 11 259 34 120 12 208 32 90 9 228 36 94 9 279 42 113 9 241 31 95 8 145 20 52 4

94 15 32 2

1Hantex markets its products through three channels: (a) retail

sales through sales emporia and depots (b) credit sales to

government employees and (c) sales to government departments, the

first being the most important. Most of thP sales depots numbering

around 200 are distributed in various cities and towns in Kerala.

205

There are a few sales depots outside the state also. But unlike

Cooptex, the apex cooperative of handloom cooperatives in Tamil

Nadu, which has a significantly large presence in Kerala, the

outside sales of Hantex are marginal accounting for less than 5

percent of the total sales61 . The sales strategy of Hantex has

emphasised the importance of sales depots rather than authorised

dealers. As a result, its marketing network is limited in

geographical coverage and over time has come to incur heavy

overheads not justified by sales turnover. The study by Mridul

Eapen that looked into the relative performance of the sales depots

identified turnover to be key factor in determining the

profitability of individual sales depots 62 . Further, it was also

seen that the proportion of profitable depots tended to increase

with the age of the sales outlets. It was further seen that for

these older depots the rent burden was relatively low. Heavy rents

and uncertainty over sales turnover have been inhibiting the

expansion of the marketing outlets which has slowly ground to

virtually a halt.

There are two key factors that have constrained the sales

promotion drive of Hantex {a) price escalation for handloom

products and (b) failure to keep up with market tastes. The prices

of handloom products are rising at a much faster rate than general

rise in consumer prices63 . The practice of ad hoc price increases

by Hantex and its upward revision of mark up to counter the decline

in profitability have compounded the problem of price of handloom

products. But the basic factor underlying the price escalation has

been the cost push factors namely wages and price of yarn. We have

already discussed the former. Therefore, we confine our remarks to

206

the latter factor, particularly the failure of Hantex to ensure

adequate yarn supply at fair prices to its members.

For a varietY of reasons the spinning mills sector that could

easily supply a major proportion of the yarn requirements of the

handloom units in the state has not been fulfilling even this

statutory requirements. As a result, the handlooms in the state

have been dependent upon the vagaries of supply of yarn from

outside the state. The price of yarn tended to rise steadily from

the seventies. It is seen that the index of yarn price9 increased

from 100 in 1970-71 to 237.2 in 1980-81 and further to 390.4 in

1988-89 while price index of handloom and powerloom cloth climbed

only from 100 to 207.5 and further to 295. 8 during the period64 .

The second major objective of Hantex was to supply the member

cooperatives with yarn at fair prices. As seen from table 10, but

for a brief period between 1973 and 1975 and again between 1977 and

1981, yarn sales by Hantex have not been a significant in relation

to cooperative production. In real terms yarn supply tended to rise

till 1974. In that year the value of yarn supplied came to 62

percent of the handloom output. In the very next year the supply of

yarn sharply dropped to around 18 percent of the cooperative output

and further to 10 percent by 1976. It recovered to 23 percent in

1977 and has since then been consistently declining reaching an all

time low of 2.2 percent in 1989. Even in absolute terms the value

of yarn supplied to the cooperatives has tended to decline in the

late eighties.

Hantex has also been a miserable failure in reorienting the

production pat tern of the member cooperatives to market demand.

207

Formally there is a system by which market feed back from the sales

depots are consolidated at regional levels and supplied to the head

quarters which in turn is supposed to convert it to market signals

in the production strategies to be communicated to the primary

cooperatives. The bureaucratic time lag involved in the process has

been too long to render the system any usef.ul purpose65 . As a

result, Hantex in practice has been largely reduced to a body that

lifts periodically at least a part of the accumulated stocks of the

primary cooperatives. It is no secret that often the choice of

items procured and the primary cooperatives favoured are made on

non market considerations under political influences66 .

As a result, the stocks tend to get accumulated at Hantex. The

inventory sales ratio that averaged around five months of sales

upto the mid seventies began to mount and exceeded twelve months at

the end of the nineties. The accumulated stocks locked up the

working capital and constrained further procurement operations. It

also resulted in accumulation of arrears in payment to the primary

cooperatives disrupting their normal functioning 57 .

We have already noted the introduction of rebate system to

sell the stocks. But the stock accumulation being a permanent

phenomenon, the rebate system has also got institutionalised.

Rebates are give for 80 days a year for festivals like onam, vishu,

christmas and ramzan. This in turn has created its own perverse

effects: 85 percent of the total sales of Hantex take place during

the rebate period68 • The uniform manner in which the rebate is

given has also dampened the incentives for diversification.

208

The annual increases in sales of Hantex even in value terms

has decreased from 19 percent per annum in the seventies to 17

percent in the first half of the eighties and 1 percent in the

latter half of the eighties. In contrast the establishment expenses

of Hantex and the interest charges have been accelerating. It has

been estimated that while the sales increased by 5.8 percent per

annum between 1978-79 and 1988-89 the establishment charges

increased between 12 and 13 percent per annum69 . As a result, the

apex body has been incurring losses every year and the accumulated

losses in 1988-89 came to Rs 3 crore rendering the organi5ation

financially unviable and further curtailing its procurement

operations.

The Kerala State Handloorn Development Corporation

This corporation commonly known as Hanveev was set up in 1968

as a financing agency to provide finance to the private sector

units. Later, it took up the supply of raw materials to weavers and

marketing of products. In 1977-78 it was entrusted with the

implementation of two intensive handloom development projects at

Cannanore and Trivandrum districts and also an export production

project at Cannanore70 . The intensive handloom development project

envisaged the setting up of 14 weaver's cooperatives with 100 looms

each at Cannanore and 12 cooperatives at Trivandrum with 2175

looms. The export production project at Cannanore was to organise

1000 looms of which 500 were to be in five new cooperatives and 800

in the existing cooperatives. The corporation also introduced a new

concept of handloom production organisation called clusters that we

have already discussed. Twenty five such clusters were set up by

209

Hanveev with 11 and 10 clusters each at Cannanore and Trivandrum

under the intensive handloom development scheme and an additional

four clusters at Cannanore under the export promotion project71 •

By 1993 the number of looms in the clusters increased to 6236. The

total cloth produced in 34 cooperatives and 24 clusters and sold by

Hanveev stood at Rs 182 lakhs in 1992-9372 . The products were sold

through the marketing depots called Hanveev showrooms. Kerala

Garments, a subsidiary of Hanveev, also exported Rs 78.60 lakhs of

garments in 1987-8 8 73 •

Unlike Hantex, Hanveev was supposed to play a direct role in

upgrading the technology and determining the production strategy of

its production units. As noted earlier, the clusters units of

Hanveev were not independent production units. For a brief period

at the end of seventies Hanveev made an entry into the export

market exporting as much as 40 percent of its sales. But since then

although its sales turn over has tended to increase, exports have

sharply declined to insignificance. Today Hanveev also largely

caters to a domestic market within Kerala. The main reason is that

Hanveev units have failed to diversify and its product mix has come

to resemble that of Hantex74 .

Because of the marketing failure of the apex bodies the

cooperatives are forced to find their own outlets for the products

such as (a) sales through own show rooms and exhibitions and (b)

orders booked by commission agents 75 . Most of the cooperatives have

a retail outlet at the cooperative headquarters and the larger ones

show rooms in neighbouring markets. The products are also sold

through temporary stalls built at local fairs and during festival

210

seasons in market· places. The inter-state markets and foreign

markets are catered through brokers or commission agents. Very few

cooperatives undertake direct exports due to the risks involved and

lack of adequate market contacts.

Section 4

Performance of the Handloom Cooperatives

By and large, the cooperative expansion of the handloom

industry was a policy response of the government to the growing

crisis of the industry. It may be argued that the cooperative

reorganisation of the industry has reversed the trend of decline in

output. But the overall performance of the handloom cooperatives in

Kerala has been poor as compared to the performance of the

cooperative sector in other states. The primary aims of cooperative

expansion being to protect the employment and earning of workers,

an inter-state comparison of the same would be the best way to

measure the relative success.

The data on output and earnings are available not in terms of

individual workers or weavers but based on weaver households. In

Kerala weaver households with less than a monthly income of Rs 200

from weaving constituted 56 percent of the total weaver households

in the state as compared to the 16 percent to 17 percent share of

such households in the other southern states. It is true that at

the all India level the ratio is more similar to Kerala at 54

percent. However, it should be remembered that while 91 percent of

the weavers in Kerala are full time weavers only half the weavers

211

in India at large are so76 . The proportion of full time workers in

the other southern states ranged from 81 to 88 percent. Therefore,

with respect to income from weaving a comparison of southern states

is more appropriate. Similarly, weaver households earning more than

Rs.500 per month from weaving constituted only 4 percent of the

total weaver. household~ in Kerala as compared to the 18 to 28

percent share of such category in the three other southern states

I • and 11 percent at the nat1onal level. Evidently, the oeeupational

earnings of weavers in Kerala are much lower than similar workers

in the rest of the country.

Table 12

Wages and Ineome of Weaver Hou~~hold5: 1987-88

Income Kerala Karnatak Tamil Andhra All range (Rs} -a Nadu Pradesh India

(1} ( 2} ( 3} ( 4} (5} ( 6}

Monthly income from weaving (% of households}

Upto 100 15 2 3 3 34 101-200 41 12 14 13 20 201-300 26 30 24 32 18 301-500 14 30 31 33 17 501-750 3 16 15 11 6 >750 1 10 13 7 5 Total 100 100 100 100 100

Monthly income from all sources (% of households

Upto 100 5 1 1 1 1 101-200 30 6 8 7 5 201-300 31 25 21 28 15 301-500 24 33 34 39 29 501-750 6 20 19 15 21 >750 4 14 17 11 29 Total 100 100 100 100 100


The disparity between the monthly income of the weaving

household between the country as a whole and Kerala tended to widen

when other sources of income are also considered. At the all-India

212

level the share of households with more than Rs 500 income per

month increased from 11 percent to 50 percent and the share of the

lowest income group {up to Rs200) decreased from 54 percent to 6

percent. On the contrary, the total income of the weavers in the

all southern remained at a significantly lower level and Kerala

faced the worst among them. Kerala's share of weaver households

with a total income of more than Rs. 500 per month was only 10

percent as compared to the 26 percent to 36 percent share of such

categories in the other southern states. In the lowest income group

(less than Rs200) the percentage of weaver households in Kerala was

35 percent as compared to the 7 percent to 8 percent share in the

neighbouring southern states. On an average income of weaving

household in Kerala was nearly 60 percent lower than the all-India

average.

Table 13

Percentage Distribution of Weaving Households vis a vis Percentage Distribution of Weaving Income: 1987-88

Weaving Kerala Karnatak Tamil Andhra All I income!%) -a Nadu Pradesh India

( 1) ( 2) ( 3) ( 4) ( 5) (6)

Percentage of income from weaving to Total income

Up to 20 2 2 2 2 38 21-40 7 6 5 4 17 41-60 15 11 8 9 9 61-80 16 11 12 11 8 81-100 59 70 73 74 29 Total Avg income(Rs (/month) )294.23 517.91 601.95 550.24 714.55

Note : Avg. = average


213

It would appear that weaving has ceased to become viable as a

full time employment in the country as a whole. Weavers with full

time employment in weaving account for 81 to 91 percent of the

weavers in the southern states, as compared to 51 percent of the

households at the all-India level, and secured a much lower income

due to the absence of other income accruing activities. Whereas

weaving contributes to more than 80 percent of the income of the

weaving households in only 29 percent of the cases at the all-India

level, in Kerala the ratio is 60 perc~nt and 70 to 72 percent in

the other southern states. We shall not pursue this aspect further

but concentrate on the differences in earnings from weaving

occupation alone.

The relatively lower monthly earning of weaver household in

Kerala than the other southern states is rather surprising because

the industry in Kerala is dominated by more modern organisations.

(For example cooperatives and quasi government production units

employed 62 percent of the Kerala weavers while more traditional

units owned by master weavers and independent weavers accounted for

40 to 70 percent of the weavers employed in the other southern

states). Besides the wages in Kerala are higher than in the

neighbouring states: the wage cost was around 35 percent lower in

Tiripur in Tamil Nadu as compared to Cannanore in Kerala in 198677•

The cooperatives play an important role in improving the wages in

the handloom industry in Kerala. The recommendation of the first

minimum wage's committee in 1959 had exempted the cooperatives from

payment of minimum wages. It was argued that since there was no

employee employer relationship in the cooperative sector the wages

may be considered as voluntarily set by the workers themselves78 •

214

The second minimum wage's commit tee in 1972 rejected the above

argument and extended their minimum wages recommendation to the

cooperative sector also79 . Today the minimum wages are paid in the

cooperative sector and the organised private sector. In the

unorganised private sector not only the statutory wages but also

the minimum wages are often avoided.

A survey in 1985 found the income per worker per day in the

industrial cooperative sector was the highest at Rs 15.20 (see

table 14). Even wages of the worker within the organised private

sector were 6 percent lower than the worker in the industrial

cooperative. The differential was because the worker in the

cooperative sector received higher than the minimum wages rate 80 .

The cooperative worker in the household sector received a lower

wage of Rs 13.20 but far higher than Rs 4. 64 received by his

counterpart in the private unorganised sector.

Table 14

Variations in Wages in Cannanore District: 1984

Category Income per day

Private Sector

Large units Rs 14.24 Smaller units Rs 6.16 Household sector Rs 4.64

Cooperatives

Non household units Rs 15.20 Household units Rs 13.20

Source Kut tykrishnan A C, Economics of Handloom Industry in Cannanore Kerala, PhD Thesis, University of Mysore, 1985

The lower monthly earnings of weavers in Kerala despite the

prevalence of high wage rates indicate relatively higher level of

unemployment. It may also be remembered that Kerala has a

215

significantly higher level of output per loom per day81 . Weaver

households producing more than 5 metres of cloth per day accounted

for 46 percent of the total weaver households in Kerala whereas the

proportion of such weaver households in India were only 22 percent

and it ranged between 27 percent to 36 percent in the neighbouring

southern states (see table 15). Similarly while weaver households

producing less than 3 metres of cloth accounted for 68 percent of

the weaver households at the all-India level the proportion was

only 15 percent in Kerala.

Table 15

Distribution of average production and employment (% share)

Metres of Kerala Karnatak Tamil Andhra India cloth Nadu Pradesh

( 1) ( 2) ( 3) ( 4) ( 5) ( 6)

Average production per weaver (metre per day)

Upto 1 2 6 12 10 49 1.1-2.0 5 16 16 10 13 2.1-3.0 8 21 17 14 6 3.1-5.0 39 21 25 36 10 5.1-10.0 42 25 24 26 13 10.1-15.0 3 9 4 2 5 15.1-20.0 1 1 2 0 3 >20 0 1 1 2 1

Average number of days of employment (% of household)

Upto 100 2 1 0.2 1 20 101-150 8 1 0.4 2 16 151-200 27 3 3 5 15 201-250 39 19 29 26 20 251-300 20 63 58 56 26 >300 3 14 10 10 4

Average days of employment per household ( per annum)

213.1 249.6 260.7 271.3 194

Average non working days per household (per annum)

138.4 82.1 90 91.9 154.1


216

The number of days of employment secured by the weaver

bouseholds in Kerala, though more similar to the all-India pattern,

was significantly lower than that of the southern states. However,

a comparison of the Kerala weaver with all India is not strictly

valid as at the all-India level only 51 percent of the weavers were

full time weavers while the share of full time weavers was as high

as 98 percent in the state. It is seen that the percentage share of

weaver households with less than 200 days of employment was as high

as 37 percent in the Kerala as compared to between 4 percent and 5

percent in the neighbouring three southern states and 51 percent at

the all-India level (see table 15). Similarly, weaver households

with more than 250 days of employment was only 23 percent in Kerala

whereas it ranged between 66 percent to 77 percent in the

neighbouring states and was 30 percent at the all-India level.

The average number of normal non working days per weaver

household was also higher in Kerala (138) as compared to the other

southern states (ranging between 82 to 92 days) but lower than the

all-India share (154 days) (see table 15). Thus, Kerala had the

highest share of weaver households with minimum days of employment

and the lowest share of households with the maximum days of

employment.

Therefore, the crucial question is the following. What are the

factors that constrained the expansion of output and employment in

the handloom industry of Kerala? Ohr discussions so far focused on

the specific characteristics of the handloom industry in the state

and the nature of the cooperative expansion schemes has already

attempted to answer the above question. Given the relatively more

217

organised nature of the Industry in Kerala the wage costs and

overhead charges tend to be high. We have also noted the handicap

of the state in ensuring adequate supply of yarn at fair prices.

Given the above cost disadvantages the competitive advantages of

the industry in Kerala lies in its ability to diversify production

and innovate new products to .remain a product leader in the market.

It is this ability that makes the industry in Cannanore distinguish

itself. We have already noted in chapter 3 that product innovation

of furnishing cloth of European standards and Khakhi military

uniform cloth in the preindependence period, special types of

Cannanore Kylee { 1 ungi) and the crepe in the post independence

period. More recently Cannanore industrial cooperatives have been

successful in making a big entry in the export market and climbed

out of the industrial recession.

But it should be said that the apex cooperative body has had

little contribution to the above industrial dynamism of Cannanore.

The industrial cooperatives in northern Kerala have been following

their own production strategy based on their assessment of market

trends. They are least depe.ndent on Hantex for lifting their

products. As can be seen from table 16 below only 8 percent of the

output in Cannanore is being procured by Hantex. The share of the

northern districts in Hantex procurement is only 16 percent. As we

have already noted the apex cooperative body has miserably failed

to act as a mechanism for transferring market signals to its member

cooperatives and diversify their production. On the contrary it has

been a passive agency to lift a part of whatever stocks that

accumulates in the primary cooperatives within the constraints of

its financial capability. The weakness of Hantex as the apex body

218

in coordinating the cooperatives and marketing the products has

been an important factor that contributed to the poor performance

of the handloom cooperatives. Though the cooperative expansion

schemes were implemented with vigour the emphasis was on meeting

specific plan targets rather than on overall development of the

industry through diversification of output and expanding markets.

Only the private sector units and cooperatives in the northern

districts have exhibited any industrial dynamism.

Table 16

Regional Variation in Hantex Procurement: 1983-84 (%)

District Coops.from Output procured which procured % Share% Proportion

( 1) ( 2) ( 3) ( 4)

Trivandrum 60 46 52 Quilon 29 30 10 Alleppey 39 4 Kottayam 42 5 3 Ernakulum 54 18 5 Trichur 38 28 3 Palghat 57 33 11 Mallapuram 9 7 Calicut 64 23 9 Cannanore 27 8 7 Kerala 47 28 100

Note: the cooperative units and output in Pathanamthitta, Idukki and Kasargod have been included in Quilon, Kottayam and Cannanore respectively; Coops. = cooperative units

Source: Director of Handlooms, Government of Kerala, Report of the Survey on Primary Handloom Weavers Cooperative Societies in Kerala, Trivandrum, 1986

In the background of the failure of the central marketing

agency and its financial nonviability the individual cooperatives

were left to fend for themselves in the face of the stiff

competition from the private sector units and outside the state

products. The result was a rapid decline in the general levels of

profitability of the handloom cooperatives.

219

We find that the share of profitable cooperatives has declined

from 60 percent in 1959 to 8 percent in 1988 (the last year for

which published data is available) . The data show that the decline

in profitability of the cooperative units was most visible during

the period 1959-76 when there was an general decline of looms and

output in the cooperativ~ sector. T~e share of profitable

cooperative production units decreased from around 60 percent in

1959 to 26 percent by 1976. The percent share of net profits and

losses as percent of sales of handloom cooperatives also decreased

from one percent in 1959 to -2:9 percent in 1971 after which it

marginally improved to 1. 2 percent by 1976. But from the mid

seventies there has been a further decline with net losses

registered in almost all years.

The emergence of the cooperative sector as the major segment

of the cooperative industry in the eighties also has not improved

in way their overall performance. But any further sharp decline in

the share of profitable cooperatives was arrested. The share of

profitable cooperative units stagnated at around 30 percent till

the mid eighties while net losses as percent of sales ranged

between 3 to 5 percent. Though detailed data is not available for

the later years information from the Handloom directorate shows

that share of profitable cooperatives continued to be around 30

percent even in the early nineties. But there seems to be a slight

improvement in 1993 when share of profitable cooperative increased

to 48 percent.

220

Table 17

Performance of Handloom Cooperatives

Year Profit Loss Net Profit Net(P/L)/ amount amount p/1 units % sales %

( 1) ( 2) ( 3) ( 4) ( 5) ( 6)

1959 603 174 429 60 1.0 1960 472 354 118 43 0.3 1961 634 235 399 41 0.9 1962 586 436 150 41 0.3 1963 480 395 85 47 0.2 1964 663 666 -3 32 -0.0 1965 764 1704 -940 31 -1.9 1966 625 652 -27 36 -0.1 1967 488 906 -418 38 -0.8 1968 693 1360 -667 27 -1.3 1969 1970 1971 512 1699 -1187 31 -2.9 1972 1587 793 794 31 2.6 1973 1974 1543 1489 54 30 0.2 1975 1976 3343 2610 733 26 1.2 1977 1326 5260 -3934 20 -5.7 1978 1354 3428 -2074 27 -3.3 1979 1980 1981 2503 5187 -2684 29 -5.8 1982 3693 8689 -4996 33 -3.0 1983 3663 9402 -5739 34 -3.1 1984 4100 9359 -5259 34 -2.3 1985 4084 121395 17311 26 -7.2 1986 40161 22923 17238 34 5.9 1987 1988 1359 14971 13612 8 -3.8 1989 1990 1991

I 29

1992 31 1993 48

I Note: P/L = Profit/Loss

Source: Reserve Bank of India and National Bank of Agriculture and Rural Development, Statistical Statements Relating to the Cooperative Movement in India, Bombay (various issues) and Office of the Director of Handlooms, Government of Kerala for the period 1991 to 1993

The failure to generate their own funds has increased the

dependency of cooperatives on government finance. The most dramatic

221

exhibition of it has been the change in the composition of

ownership of share capital of Hantex. The proportion of shares of

the primary cooperatives in the share capital of Hantex declined

from 40 percent in the 1960s to 4 percent in the late eighties82.

With 95 percent of the shares being in the hands of the government

the apex body has virt~ally become a quasi governmental

organisation although elected representatives of primaries

constitute the majority of the director board. Moreover, the

managing director is a government servant. Over time inbuil t

bureaucratic tendencies within the organisation asserted themselves

rendering the decision making process costly time-consuming process

least sui table for business interests83 •

Finally, we must also draw attention to the emerging evidence

of the· wide spread corruption within the hand loom cooperatives

particularly within Trivandrum district. We have already drawn

attention in section 1 to the suspiciously phenomenal expansion

that the cooperative had in Trivandrum district from the late

seventies. It is now evident that the 1983-84 survey results as

well as the official statistics that followed were not the result

of any accidental double counting of units or looms but the result

of sinister design to set up bogus cooperatives or create spurious

additional capacity in the existing units to take advantage of the

concessional finance and defraud the exchequer of the rebate

subsidy.

From 1986 there has ben a spate of reports from the press that

drew attention to the widespread corruption84 • The modus operandi

seems to be the following: The bogus cooperative is registered or

222

bogus capacity·created either by inducing weavers to become members

of more than one cooperative or falsely entering the looms in the

private sector into the registers. In the worst case totally non

existent looms are entered into the register with the convinance of

the officials. Most of the members would also not have any

connection with the weaving occupation. With the registration of

the cooperative it is entitled to concessional finance and rebate

on sales. False yarn bills from approved yarn merchants are

procured and false records of production and sales to public are

created. The sales bills are presented to Hantex and 20 percent

rebate claimed. ~ccording to a report in 1986 the bogus

cooperatives defrauded the public of Rs 25 crore through this

method85 • Yet another practice by the bogus cooperatives is to

purchase cheap handloom or even powerloom products from Tamil Nadu

and sell it to Hantex. We have already noted the bias of the apex

body to make purchases from Trivandrum district. It has been

reported that the transactions are undertaken with the knowledge of

some Hantex officials who get a fixed commission for the rebate

cheques gi ven86 •

There is no way to estimate the extent of corruption. In 1986

the Minister of Industries himself admitted the existence of 15200

bogus looms in Trivandrum37 . The most recent report of a memorandum

submitted to the government by a panel of eminent citizens claimed

that the total production in Trivandrum district would be around 3

lakh metres of cloth valued at Rs 2.5 crore instead of the Rs 20

crore for which a rebate of Rs 4 crore is falsely claimed as

subsidy from the district alone. These cooperatives also availed of

Rs 15 crore as cash credit from the Trivandrum District

223

Cooperative Bank 88 . The fact that the above defrauds in the name

of cooperative has been going on for a decade despite the numerous

reports and even questions raised in the legislative assembly

points to the possibility of strong bureaucratic and political

patronage to the corruption. This indicates the serious morass into

which the handloom cboperatives in southern Kerala have slipped

into.

Conclusion

Our discussion of the origin and expansion of the handloom

cooperatives brought out the direct and vital role that government

intervention has played in its evolution. Though the hand loom

cooperatives were actively promoted during the colonial period, it

was after independence that the cooperative sector rapidly expanded

as a part of the Five Year Plan Programmes. The cooperative

reorganisation was the policy response of the government to the

industry crisis and every phase of crisis witnessed a spurt in

cooperativisation. Thus we find that despite government patronage,

cooperative development in Malabar was limited where existed a

relatively vibrant handloom industry at the time of independence.

The phases of industrial recession that followed the world war boom

in the early fifties and the collapse of the crepe boom in the

early eighties led to emergence of large number of cooperatives for

rehabilitation. The phenomenal expansion of the cooperatives from

the mid seventies was a response to the secular decline in

production in Kerala during the previous decade.

224

Our subsequent analysis showed that the track record of the

handloom cooperatives in resolving the crisis has been rather

spurious. Although it has facilitated significant increases in wage

rates, the number of days of employment has declined and earnings

of weavers remain very low. The major hurdle, as shown in section

3, lay in the failure cif the central cooperative to expand sales to

fully utilise the production capacity. Apart from the bureacratic

and quasi governmental structure that the apex body has turned out

to be, the expansion of sales has been constrained by the

relatively higher prices of Kerala handlooms and the absence of

product diversification. The specific features of the handloom

industry in Kerala viz. it's relatively more organised nature and

the consequent higher wages and over head charges and concentration

in a narrow traditional product mix, have circumscribed the

cooperative reorganisation.

A theme that has been recurring in our presentation is the

contrast between northern and southern parts particularly Cannanore

and Trivandr11m districts. Cannanore has had a tradition of better

industrial organisation, superior tec~nology and disciplined and

politically conscious trade union movement. The cooperatives were

not mere departmental schemes but emerged out of active demand from

below in periods of industrial crisis whereas in Trivandrum

production was scattered in household units dominated by backward

technology and traditional products and the strength of the trade

union movement weak. Cooperatives here were continuation of the

benevolent tradition of the government. They were more of

department schemes formulated by the government that were

bureaucratically implemented to meet Plan targets.

225

To conclude our discussion, we would like to draw attention to

the significant contrast in the performance of the cooperatives in

the two districts. The absence of data constraints us from

empirically substantiating the distinct impression we gained during

our field visits. In section two we had referred to the relatively

successful performance of th.e cooperative sector in Cannanore in

ensuring better returns to labour than even the organised private

sector. The same study has revealed that in terms of efficiency

criteria other than the profit rate, the cooperatives compared well

with the private sector. In contrast, an all Kerala survey

conducted in 1984 on the basis o~ sample survey of 500 handloom

weavers, came to the conclusion that the earnings of the weavers in

the private sector were in fact higher than that of the cooperative

workers 89 • It would indicate that the performance of the

cooperatives in Cannanore with reference to returns to labour has

been superior to the experience of Kerala at large. Yet another

study, where the experience of Cannanore and Trivandrum weavers is

explicitly contrasted, tend to confirm the above statement90 • To

sum up, our discussion highlights the importance of initiatives,

participation and vigilance from below in the successful

performance of the cooperatives.

226

Notes and References

1. Ministry of Textiles, Government of India (1990), pp.111-119.

2. ibid., pp.111-119.

3. For further details, see Department of Industries, Government of Madras (1926), p.49.

4. See C A Innes (1951), p.266.

5. Director of Handlooms, Government of Kerala (1986a), p.86 and p.73.

6. Ministry of Commerce and Industry, Government of India ( 1955) , p.256, p.270 and p.284.

7 • ibid • 1 p • 9 •

8. Government of Travancore (1934), p.83.

9. Director of Handlooms, Government of Kerala (1986a), p.4 and p.17.

10. See Cooperative Department, Government of Administrative Report, 1947, p.10.

11. See also Nair P V (1960), p.B and p.38.

12. ibid. 1 p.9.

Travancore,

13. For further details, see Government of Trav;:mcore (1935), p.83; Cooperative Department, Government of Travancore, Administrative Report (various years) ; Cooperative Department, Government of Cochin, Administrative Reports, (various years); Cooperative Department, Government of Travancore-Cochin, Administrative Reports, (various years) and Nair P V ( op. cit. ) , p. 9.

14. Cooperative Department, Government of Travancore, Administrative Report 1945-46, p.10 and p.11.

15. Ministry of Commerce, Government of India (1974), p.58.

16. See Nair P V (op.cit.), p.8. and Ministry of Commerce, Government of India (1965), p.32.

17 . ibid. , p. 8.

18. ibid. I p.lO.

19. Department of Industries and Commerce, Government of Kerala, Administrative Report 1956-57, p.21.

20. Reserve Bank of India (1961), p.29.

227

21. The Statistics published by the Reserve Bank of India are not strictly comparable as the data available from the 'sixties to the mid 'seventies is inclusive off all weaving units and data pertaining exclusive to handloom cooperatives are available only from 1972. However, since handloom cooperatives account for more than 95 percent of the weaver cooperatives prior to the seventies the data published by the Reserve Bank of India can be used to assess the broad trends.

22. Rajagopalan V (1986), p.29;

23. Table 1 Changes in the Composition of Output (Percentage share)

Item Cooperative Sector Total Industry Price per produced metre

1969-70 1983-84 1987-88 1983-84

Dhoti 21 29 31 8.62 Sari 4 6 8 10.67 Bed spread 2 4 5 17.36 Furnishings 2 NA 4 NA Shirting 6 9 7 11.53 Towels 34 17 18 2.91 Lungis 18 13 20 8.92 Others 15 21 10 5.36

Source: For 1969-70 State Planning Board and Bureau of Economics and Statistics, Government of Kerala, Industries Industrial Labour and Infrastructure, Trivandrum 1976 For 1983-84 Director of Handlooms, Government of Kerala, Report of the Survev on Primary Handloom ~eavers Cooperative Societies in Kerala, Trivandrum, 1986 For 1987-88 Ministry of Textiles, Government of India, Census of Handlooms in India 1987-88, New Delhi, 1990

24. Rajagopalan V (op.cit), p.29.

25. Director of Handloom, Government of Kerala (1981).

26. State Planning Board, Government of Kerala (1984c), p.282.

27. ibid., p.282.

28. ibid., pp.282-283.

29. State Planning Board, Government of Kerala (1989), p.37.

30. ibid., p.37.

228

31. Table 2 Composition of Government Aid to Handloom Cooperatives

Category Fourth Fifth Seventh Eighth Plan Plan Plan Plan

Hand loom cooperatives 84.77 214.84 1307.5 2530 Hanveev 9.5 53.19 832 2810 Rebate 120.09 164.97 Other Marketing Assistance 13.29 9.2 183 0 Total Handloom Industry 238.87 444.95 2005 4471

Source: State Planning Board, Government of Kerala, Report of the High Level Committee on Industry, Trade and Power, Government Press, Trivandrum, 1984 State Planning Board, Government of Kerala, Report of The Task Force on Traditional Industries: Eighth Five Year Plan, Trivandrum, 1989

32. State Planning Board, Government of Kerala (1989), p.46.

33. Director of Handlooms, Government of Kerala (1986), p.4.

34. Table 3 Discrepancies of the District Wise Data on Number of Looms

District - 1976 1984

Priv. Coop. Total Coop. Total Discrepancy

Trivandrum 13999 5235 19234 27280 21000 6230 Quilon 1032 3131 4163 6457 4770 1687 Alleppey 420 412 832 820 1025 Kottayam 257 635 892 1417 1480 Ernakulum 1898 1898 3796 4753 4080 673 Trichur 992 992 1984 2035 2420 Palghat 3408 3408 6816 6506 4800 1706 Mallapurum 396 396 792 1104 1563 Calicut 2873 2873 5746 6457 14700 Cannanore 3568 3568 7136 7109 39200 Kerala 67482 22548 90030 64058 95038

Source: For 1976, Department of Industries and Commerce, Government of Kerala, Report of the Handloom Census 1976, Trivandrum and for 19 8 4 cooperatives, Director of Hand looms, Government of Kerala, Report of the Survey on Primary Hand loom Weavers Cooperative Societies in Kerala, Trivandrum, 1986 and for industry and private sector Rajagopalan V, The Hand loom Industry in North and South Kerala: A Study of Production and Marketing and Structure, M Phil Thesis, Centre For Development Studies, Trivandrum, 1986.

35. See endnote 32.

36. Ministry of Textiles, Government of India (1990), p.61.

37. ibid., p.34.

38. State Planning Board, Government of Kerala, Economic Review 1993, p.248.

229

39 .. For 1961, Government of India (1965); for 1971, Government of India (1975); and for 1981, Government of India (undated).

40. Department of Industries and Commerce, Government of Kerala (undated), pp.89-90.

41. Not only was· the size of the non household segment larger in Kerala but also the size of units in this sector. Units with more than 10 looms accounted for 44 percent of the non household units in the state whereas the share of such units was only 22 percent at the All India level and ranged between 16 percent to 31 percent in the other three southern states.

Table 4 Size distribution of weaving establishments

No oflooms Kerala Karnataka Tamil Andhra India Nadu Pradesh

Non Household sector

1-5 Looms 23 52 40 34 52 6-10 Looms 33 32 29 39 26 11-25 Looms 30 11 21 23 16 26-50 Looms 7 4 5 3 4 >50 Looms 7 1 5 1 2

Household sector

No looms 46 16 27 9 11 1 Loom 33 61 36 71 70 2 Looms 12 15 23 15 14 3 Looms 4 3 7 3 4 4 Looms 2 4 3 1 1 > 4 Looms 3 1 4 1 1

Source: Ministry of Textiles, Government of India, Censu of Handlooms in India 1987-88, New Delhi, 1990

In the non household sector weaver households with no looms constituted the largest proportion in Kerala (46 percent) as compared to All India (11 percent) and also the other southern states (ranging from 9 to 27 percent). The large proportion of loomless weaver households in Kerala would be the result of the larger share of non household units where weavers were engaged in production on the looms in the non household units.

42. Director of Handlooms, Government of Kerala (1986), p.21 and p.115.

43. Ministry of Textiles, Government of India (1990), pp.24-26.

44. Narayanan W C (1972), pp.25-26.

45. Rajagopalan V (op.cit.), p.96; and State Planning Board, Government of Kerala (1989), p.44.

230

46. Reserve Bank of India (1962), p.28.


48. Director of Handlooms 1 Government of Kerala (1986) I p.21.

49. For details of such cooperatives working in some areas of the Malabar region see Ministry of Commerce and Industry, Government of India (1955) I p.268 and p.284.


51. Rajagopalan V (op.cit.), p.62.


53. Rajagopalan V (op.cit.). pp.76-77

54. Nair P V (op.cit.), p.48 and Narayanan W C (op.cit.), p.22.

55. Rajagopalan V (op.cit.), pp.45-46 and Nair P V (op.cit.) p.17 and p.39.


57. ibid., p.73.

58. Geetha Devi S (1982) 1 p.86.

59. State Planning Board, Government of Kerala (1984c) I p.284.

60. Thomas Isaac T M and Ram Manohar Reddy C (19q2) 1 p.51 and p.60.


62. Mridul Eapen (1991), p.32 and p.42.

63. ibid., p.34.

64. Chandok and the Policy Group (1990), pp.350-374.

65. Mridul Eapen (op.cit.) 1 pp.26-28.


67. Mridul Eapen (op.cit.), p.40.

68. Rajagopalan V (1986), p.88; and Mridul Eapen (op.cit.), p.26.


70. State Planning Board, Government of Kerala (1984c), p.285.


231



74. ibid., p.93.

75. ibid., pp.81-83.

76. Ministry of Text~les, Government of India (1990), pp.24-26.


78. Nair P V (op.cit.), pp.28-30.

79. Narayanan W C (op.cit.), pp.18-20.

80. Kuttykrishnan A C (1985), p.343.

81. It was 6. 04 metres per day in Kerala. which was higher than those of the other south Indian states and also the national average of 5.12 metres per day. For details see Ministry of Textiles, Government of India (1990), pp.147-149.


83 o ibid. 1 PP• 8-9 o

84. For details see Kerala Kaumadi dated 14.11.1994, 28.6.1990; Malayala Manorama dated 24.10.1986, 12.9.1986, 24.9.1986, 26.7.1988, 3.6.1990, 2.6.1998; Mathrubhumi dated 29.7.1990, 27.5.1990, 6.12.1993, Madhyamam dated 25.5.1990; Deshabhimani dated 27.8.1988; Patriot dated 27.3.1990; Times of India dated 31.6.1990; Illustrated Weekly dated 29.4.1990, The Week dated 29.11.1986

85. Malayala Manorama dated 2.3.1986

86. Mathrubhumi dated 6.12.1993.

87. The Hindu dated 11.3.1986.

88. The Hindu dated 5.10.1994.

89. Sarangadharan M (1985), p.131.

90. Geetha Devi (op.cit.), p.100 and p.109.

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