CENTRE FOR SUSTAINABLE PRODUCTION AND CONSUMPTION (C-SPAC) 

GLOBALISATION AND THE INFORMAL SECTOR  

THE EVENTS

Background and Objective: 

Consumer Unity & Trust Society (CUTS) has taken up a project supported by Oxfam GB’s India Office to organise advocacy dialogue and generate awareness among the target group on impact of globalisation and economic liberalisation on Indian informal sector. Oxfam has taken up this project as a part of their “Make Trade Fair” campaign. The key objectives of holding these dialogues are:

• Bringing different stakeholders active in informal sectors, home-based production and cottage industries into dialogues platforms for exchanging information and views on opportunities and challenges facing the sector in the era of globalisation and economic liberalisation.

• Disseminating balanced views on globalisation and economic liberalisation to the representatives of these sectors.

• Creating an enabling environment for policy advocacy so that these sectors are able to take challenges and avail opportunities arising out of globalisation and economic liberalisation.

• Developing a long-term work programme with these sector as the target group and for facilitating the process of getting benefits out of globalisation and economic liberalisation and understanding safety nets for taking risks in order to avail opportunities as well as insulate from threats.

• Ensuring fair trade environment through advocating effective implementation of existing trade rules to percolate the benefits of free trade to the marginalised informal sector producers in developing countries.

Regional Workshop: 

The project was started a virtuous beginning with Launch Meeting in New Delhi on 9^th June, 2003. Subsequently a series of four regional workshops are being organised by CUTS with support from Oxfam GB’s India office and in collaboration with regional partners at Bhubaneswar (Orissa), Hyderabad (Andhra Pradesh), Lucknow (Uttar Pradesh) and Ahmedabad (Gujrat). Partner organisations of these workshops are respectively Regional Centre for Development Cooperation (RCDC), Bhubaneswar; Centre for Resource Education (CRE), Hyderabad; Network of Entrepreneurship & Human Development (NEED), Lucknow and International Centre for Entrepreneurship & Career Development (ICECD), Ahmedabad.  

For better concentration and meticulous working one particular item under the broad aegis of informal sector has been identified for each workshop. The specific sector for Hyderabad and Ahmedabad workshops is handloom. Sectors identified for Bhubaneswar and Lucknow are respectively Non-timber Forest product (NTFP) and Handicraft. 

Participants:

Each workshop witnessed a wide range of participation consisting of producer groups, their associations, community-based organisations and NGOs working among these groups, government officials, academicians, elected representatives of local self-government institutions, media persons, developmental agencies etc. The encouraging participation and interaction from the producer group, specially women entrepreneurs helped to frame up very purposeful and fruitful policy recommendations in all the workshops.
 

The Competitiveness of Indian Informal Sector and Cottage Industries in the Era of Globalisation and Economic Liberalisation

Report of New Delhi Seminar held on 9^thJune 2003 

Anand K. Das, Programme Coordinator, Market Access Programme, Oxfam GB’s India Office
Ms. Mita Dutta, Coordinator, CUTS, Calcutta 

The Seminar began with Ms Mita Dutta welcoming all participants present. She briefed the audience on CUTS’ history, its present activities and its centres. She emphasised that for the Indian economy to achieve economic equality and social justice, development of the informal sector is crucial. Institutional and infrastructure support for technological upgradation and market penetration of informal sector goods, is important in this era of globalisation and economic liberalisation. There is an urgent need to look into the policies that impact this sector, with the view of improving its competitiveness and long-term prospects for high growth. It is found that efforts towards this end lack cogent actions. From this rationale, stems the key objectives of the GELIS project, which are: 

• Bringing different stakeholders in the informal sector into dialogues for exchanging information and views of the opportunities and challenges faced by this sector in this era of globalisation.
• Disseminate balanced views on globalisation and economic liberalisation to the representatives of this sector.
• Create an enabling environment for policy advocacy.
• Develop a long-term work programme with the informal sector as the target group.

Anand K Das gave a brief introduction of OXFAM GB in India and its activities. He said that one of the objectives of the sustainable livelihood programme and the OXFAM Make Trade Fair campaign is to work for the benefit of small producers. The informal sector, he said, has huge potential to bring benefits to the poor. Only too often, issues concerning small producers are not taken into account by policymakers.

Discussions, he said, are mostly centred on large industries. The voice of the small producers, home based production and cottage industries are often missed. The objective of this seminar is to get the crucial issues on board and to obtain inputs from all present to make the project a success. 

One of the key objectives of the launch seminar, said Ms. Dutta, was to develop a proper regional agenda. On this note she welcomed and requested all the regional partners and other participants attending the seminar to give brief introduction of them. The following are the regional partners to the project:
 

·         Mr. Binu Zachariah,

International Centre for Entrepreneurship & Career Development (ICECD), Gujrat

·         Mr. Nirmalendu Jyotishi,

Regional Centre for Development Cooperation (RCDC), Orissa

·         Mr. D. Narasimha Reddy,

Centre for Resource Education (CRE), Andhra Pradesh

·         Mr. Anil K Singh,

Network of Entrepreneurship & Human Development (NEED), Uttar Pradesh

Prof. B.B. Bhattacharya, Director, Institute of Economic Growth, New Delhi
Prof. T.P. Bhat, Institute for Studies in Industrial Development, New Delhi 

Prof. Bhatttacharya started by raising the issue of massive job losses in Southeast Asian countries as a result of the East Asian Financial Crisis. The economies of Southeast Asia, he said, faced traumatic changes due to severe adjustments in their macroeconomic policies. It was the drastic exchange rate changes in Malaysia, for example, that affected jobs. Further, it was the poor and not the industrialists that were affected by these policy changes and who were victim to increasing unemployment. 

This, he said, and other such examples, bring to light the fact that it is the poor and the vulnerable that bear the cost of liberalisation most, while the benefits are mostly reaped by the rich. This imbalance, he said, is reflected clearly in the existent multilateral trading system.  

Bringing in the dimension of multilateral trade rules, he said that the World Trade Organisation (WTO) was flawed in making two assumptions: firstly, that as soon as you open trade, trade will boom, increase incomes and further production. Secondly, that globalisation is needed for improving efficiency. The WTO espouses the globalisation of capital, when production is an interaction of both capital and labour. In reality, developing countries are characterised by low capital bases and a host of other institutional constraints that make it difficult for them to derive equal benefits from the multilateral trading system, as compared to developed countries. All this has given rise to a worldwide backlash and call for a rethinking of the way multilateral trade rules are formulated and implemented. The need for ‘globalisation with a human face’ is being increasingly recognised by industry associations and policymakers. A new thinking is evolving which addresses a pertinent question: What needs to be done in order to ensure that the benefits of globalisation percolate down to the poor?   

Bhattacharya brought to fore the pertinent issue that developing countries that depend on foreign capital to cover their trade deficit, cannot be choosers at the multilateral trading front. Efforts need to be made at the domestic level to improve the institutional infrastructure in developing countries, including developing an effective regulatory structure, modernisation of production, improving social and human development etc. in order to derive maximum benefits from international trade. In India, the labour laws between the formal and informal sector need to be more even. Further, production is not the only necessary component for industrial growth. It is equally important to take policy measures to increase the purchasing power of consumers (buyers). 

“The bulk of foreign exchange in India is earned from the informal sector,” said Bhattacharya. India, he said, should exploit its grossly under utilised skilled scientific manpower, which is largely unorganised. Further, he pointed out that the Government should adopt a selective approach, by investing resources in those sectors that have a competitive advantage in the international market. 

He ended by saying that it is crucial for non-governmental sectors to bring about grassroot level awareness, educating the citizens about what is the right issue and the right leader to vote for, in order to promote the right kind of policymaking. 

Prof. Bhat made an interesting presentation on the impact of economic liberalisation on the Indian informal sector, in the context of ongoing changes in the world economy. He started by defining the globalisation as the increasing integration of local and national economies with the world economy. The process of globalisation, he said, involves gradual removal of trade and investment barriers between nations, with the aim to achieve economic efficiency through competitiveness, while seeking broader objectives of socio-economic development. 

Liberalisation, according to him, means simplifying business procedures, namely trade and investment and doing away with licenses, permits and regulations. “Government acts as a facilitator and not an interventionist in conducting business”, he emphasised.  

He defined the informal sector as highly heterogeneous, encompassing production units of different features and in a wide range of economic activities as well people (workers, producers and employers), working or producing under many different types’ employment relations and production arrangements. According to him, due to its multiple dimensions, it is difficult to describe the informal sector. 

Some interesting facts of the India informal sector emerged from Bhat’s presentation. These are: 

• Informal sector is growing rapidly in India due to close down of state enterprises or privatisation.  As a result, there is a rise in unemployment in the organised sector. The proportion of the active population in the informal sector (excluding agriculture) increased from 75% in 1990 to 94% in 2000. 92% total employment in India is from the informal sector. 75% of agriculture, 60% of construction and 75% of trade is in this sector. 60-65% of the output comes from the informal sector.

• There are two important reasons at the global level for enlargement of the informal sector:
  • Global economic crisis of 1997-99
  • Method of organising production by transnational enterprises
     
• In the foreseeable future, one can expect more deregulation and further growth of the informal sector.

• As far as production process goes, there are two segments in the informal sector
  • One segment which directly produces and meets consumers requirements and
  • Another one depends on the large sector, mainly downstream industries
     
• The dependent informal sector buys inputs from the organised sector and sells its output back. This is about 27% of the output of the units in the informal sector
• Rests of the informal sector units directly sell their output in the market. These units do not get any promotional incentives like subsidies etc
• Even in the informal sectors branded goods may gain and nonbranded goods may suffer due to consumers preferences for branded products in the recent times.
• Removal of regulatory restrictions will reduce transactional costs from the informal sector. This is a positive gain. At the same time, denial of promotional benefits will negatively affect them.
• On the other hand, removal of restrictions and denial of promotional benefits will not affect units in the informal sector. Therefore, their efficiency would remain intact.
• In this situation, informal sector efficiency will be critical for the survival of the formal sector due to their dependence
• Citing the example of the 1997-99 East Asian crises, he said that it destroyed 24 million jobs in East Asia alone, mostly in the industrial sector. For these jobless, in the absence of the social safety nets, the informal sector was the only option. The issue for India is the need to put in place a mechanism to protect the unprotected in the informal sector.
• Social safety net should be developed to give support to informal sector. The formal sector should be partners in their own interest.

Bhat concluded by saying that globalisation of industry is irreversible. It is driven by trade and investment liberalisation, rapid technological progress, new management systems, new global rules and regulations. India needs to be part of it and there is no option. However, the negative impact of globalisation maybe the exclusion of local producers from the benefits and the exclusion of disadvantaged workers, social groups and women.

Competitive efficiency is forcing greater flexibility in the use of labour. This means loss of secure jobs and employment in the informal sector. The corrective measures needed are:

• Enhancement of inter linkage between formal and informal sectors
• Increasing technological efficiency of production in the informal sector
• Organise informal sector labour and provide social safety nets
• Evolve economic policies to give preferential treatment and access to health and education to the socially disadvantaged
  groups.

D.S.Negi, General Manager, Small Industries Development Bank of India, New Delhi 

D.S.Negi through his discourse on the role of Small Industries Development Bank of India (SIDBI) in providing finance to the informal sector, brought to light the role informal lending can play in meeting the credit needs of this growing informal sector in India.  

SIDBI, he said, which is an offshoot of Industrial Development Bank of India, was created in 1990 with the mandate of financing, developing and promoting the small-scale industries sector in India.  SIDBI, is more of an ‘enabler’ than a promoter of small industries, which includes the informal sector. Income generation in the informal sector is through diverse activities, which largely involve home-based production. Given this and the proportion of the population that engages in informal sector activity in India, their credit needs, if estimated, can be incredibly high. 

According to Negi, the small industries growth relative to large-scale industries growth has always been higher. However, the poverty figures in India are staggering. There are some 400 million rural poor, most of whom are women. It is the women, in these diverse societies, who predominantly undertake economic activity. Despite this, their existence is not ‘visualised’. For rural poor there are poverty alleviation programmes like the Integrated Rural Development Programme and for the urban poor there are several employment generation schemes. However the impact of these measures on poverty in India has hardly visible. The credit channels, particularly, to the informal sector activities is still largely inadequate. 

Negi raised a crucial point that in spite of a network of 50,000 commercial bank branches and 14,000 rural bank branches all over India and small branches in the remotest of areas in the country, the informal sector is still starved of finances. In this context, he said, that the problem is that bankers want to lend but the small borrowers often do not comply with the various terms and conditions of commercial bank lending, like proof of creditworthiness to their name etc. A way out has to be found. 

SIDBI, he said has experimented lending ‘informally’ to the informal sector. SIDBI’s experience shows that the credit needs of the rural poor are large, and mostly composite in nature. For example, finances are required for part direct consumption, partly to build a house and partly for raw materials to be used in production. Credit demands of this nature make lending complicated for bankers.  

The trend adopted by SIDBI for informal bank lending involves, as a first step, the identification of well-accredited non-governmental organisations that understand the ethos of the informal sector environment best. SIDBI then prepares these selected NGOs with the capacity to provide micro-finance to the informal sector. Micro-credit financing involves little paperwork and SIDBI has a well-developed scheme for rating NGOs. Today, 150 NGOs are accredited to SIDBI and the micro-credit approvals obtained by SIDBI since 1994 is more than Rs. 112cr. 

SIDBI engages in two types of funding activities: preparing NGOs with the capacity to provide credit as micro-financing institutions, or providing them with grants, which are apportioned from their profits every year, for lending to the informal sector.  

The micro-credit approvals obtained by SIDBI since 1994 has been more than 112 crore rupees, though the disbursements have been little less. In SIDBI’s experience, the credit is returned with a default rate of less than one per cent, most of which have been minor delays in repayment rather than there being a chronic default.  

According to Negi, as of 2003, approximately 7,20,000 beneficiaries are assisted by SIDBI.  Through formal channels for lending, this reach would have been difficult. The Government of India, he said, has appreciated SIDBI’s efforts and achievement.  

Negi ended by reiterating the central message of his discussion, “ Formal lending has given way to informal lending”. 

Discussion Points from All Participants:

Negi’s presentation generated active discussion from the audience. The key points raised were:

• When asked if SIDBI’s lending activities, as described by him, are an ‘informal’ way of financing or an ‘indirect’ way, Negi answered that it was both.
• When asked the crucial question of how clients are chosen, or how their credibility is obtained, Negi said that it was a question of trust. A large part of the informal sector borrowing is in the form of community borrowing, which automatically is more credible.
• Another crucial point was raised from the participants that NGOs can be subject to a lot of political influence. In this regard, how does SIDBI establish the credibility of NGOs?
• When asked why local moneylenders still dominate, Negi responded by saying that moneylenders have been operating for ages. They however engage in a lot of arm-twisting which needs to be addressed.

Shyam S Sharma, President, Fair Trade Foundation
Samar Varma, OXFAM GB’s India Office 

Shyam Sharma depicted the bleak scenario of wage employment wherein the informal small-scale sector, based mostly on home-based jobs, acts as a viable alternative to absorb rapidly increasing workforce. The sector provides an essential and automatic training ground for developing the entrepreneurial skills that are essential to further employment and production.  

Defining the informal sector he mentioned that the sector is not supported or regulated by the government and is compelled by circumstances to operate outside the framework of law. He explained that the term home-based, has generally been used, in reference to piece-rate workers who complete specific steps in the production process, for an employer or sub-contractor from their homes.  They work at home and look independent, but in reality they are mostly dependent on employers and intermediaries for work.  He highlighted the meagre earning of home-based producers, which are lower than other workers and often less than the minimum wages.  

The constraints faced by the sector ranges from no or little access to organised markets, formal credit institutions to non-availability of formal education and training facilities. He then turned the spotlight of his discussion on the plight of informal sector workers having no social protection, labour legislation and protective measures at the work place. They are generally working in appalling and unhealthy conditions. Children are employed in hazardous labour and women are condemned to inequality. 

The presentation of Shyam Sharma penetrated into the lacking in periodic review process of the policies and schemes as also ineffective functioning of the existing provisions by the government. He also referred to the adverse impact on informal sector due to withdrawal of some benefits in the last budget as a result of difficult taxation policies. He emphasised the need to consider the ground realities so that the artisans and other players in the sector can take real advantage. The government and government sponsored organisations like Apex Bodies, State Emporia etc. can play a major role in accessing larger domestic markets for the crafts sector. 

Enunciating the role of government he pointed out that government policies should facilitate the availability of raw material at reasonable costs, encourage technical innovation to facilitate efficient and quality production and evolve mechanisms for less cumbersome inter-state movement of handicrafts and textiles.  He stressed the need for more government schemes to take advantage of the design input provided by the trained designers and government sponsored design institutes. Against the backdrop of changing socio-economic scenario, he proposed government consultation with various NGOs, private businesses, designers, management persons, to assess the requirements of the market and the limitations and needs of the artisans. This would help to formulate policies and execute plans to strengthen the informal home-based sector.  

The kingpin of his presentation was fair trade factor in market access and producers' development. He put special emphasis to develop the production process professionally and also to make it marketable and attractive in the world market.  He mentioned a number of producers' organisations in organising the grassroots to make them capable practically and professionally.  A large number of home-based producers, although comparatively still a small section, were trained to compete successfully in the fair trade market. At this point, he appreciated the commendable role of Oxfam GB in India and Oxfam worldwide, to enable the producers to compete in the market on one side and to make the fair trade market accessible to them on the other side.  He also narrated the role of the Fair Trade Forum of India, which is part of Oxfam’s BIG NOISE campaign and other such useful activities to make the world fairer. 

He eloquently explained the issue of human dignity and its linkage with fair trade practices. The fair trade in the world has supported millions of grassroots, engaged in the home-based informal sector of production, mainly in fields of handicrafts and commodities. He stated that the concept and practice of buying only ethically produced products, with a motive of human development, is catching fast in the west. For that the fair trade is in need of a better visibility and advocacy & lobbying of its ethically clean products made in dignity for the development of grassroots. 

Referring to the problem of market access, he mentioned that the home-based products are mainly being sold through the world shops now spread all over the world.  But still the number of world shops is very limited and the access of fair trade products to the mainstream global, regional and local markets is of utmost importance. His presentation ended with the clarion call to make a better liveable world for all with producers' development, human achievement and national advancement.  

Samar Verma thanked CUTS for inviting him to the conference and also acknowledged that he was in the presence of a number of experienced people. 

• Began his session with a brief background on ‘Fair trade’ or ‘alternate trade’. He specifically addressed issues related to market access with the fair trade perspective.
• Discussed the issues related to the Informal sectors/cottage industries and home-based industries. He reiterated the importance of these sectors and mentioned that because of these sectors, employment for a large no of people has been created. These are people who have not been absorbed by the organised sector. Today these sectors are faced with great challenges.
• Fair Trade today is faced with several dilemmas, such as:
  1. Increased poverty,
  2. Growing marginalisation of different margins of society.

This is largely due to the trade rules that exist today which are skewed more towards the Rich countries.

·         Cited examples of the IT sector and the handlooms and handicrafts industry

·         The IT sector began as an informal sector and today is one of the largest sectors of India. The reason for its development is largely due to absence of regulation. On several cases the failure of the informal sector has been assumed to be due to lack of regulation. But the mentioned example makes it quite clear that an informal sector can do better without regulations also. On a lighter note he said that by asking for regulation people are giving the chance to the government to increase work of agencies and NGO’s like those present in the conference, who have to struggle for people’s causes.

• Globalisation and Economic Liberalisation: Globalisation, these topics were unheard of ten years ago. Then why is there such a huge hue and cry about them for the last few years? It is because the ratio of globalisation has increased dramatically in the 90’s. The increase is due to the global commodity chain and also due to the improvements in technology. The driver of the global commodity chain is none other than the buyer himself. Hence more emphasis needs to be given to address problems faced by buyers.

• It is important for people in the informal sector to explore the international markets. They should not restrict themselves to the domestic markets alone. This will largely depend on the quality of products produced and thus it has to be ensured that they are produced in line with export quality.
• The barrier between the domestic and international trade is fast crumbling, it is the ideal time for this sector to use this to their advantage. With the advent of new technologies such as Internet it is easier, cheaper and faster for one to carry on business internationally. But one has to realise that the products should be of high quality as competition at the international market as well as  in domestic market is increasing.
• Market Access: We all know that all international trade rules are rigged and that everyone present for the session were well aware of the plethora of the problems with international trade. The quotas that have been sanctioned will go away soon but the tariffs that have been decided will remain. The tariff barriers on the imports from India will crumble soon and this will greatly affect trade. Some of the issues that will be used for this are as follows:

1. Environment standards
2. Child labour etc.

These problems will contribute to this phenomenon and this will greatly affect people working for the informal sector.

• On a concluding note he said that the industry should provide an enabling platform to achieve competitiveness, especially for sectors such as handlooms and handicrafts. These sectors can be popularised by devising proper marketing strategies to market these product and make consumers aware of their utility.

He gave the example of the handloom and the handicrafts sector: the products manufactured by these sectors are usually considered cheap because poor people make it.

• With the help of the right marketing strategy one can market these products very well. It is a well-known fact that such handmade products are well appreciated in the overseas market. Hence such knowledge should be used to market the products. He said that it is the responsibility of the NGO’s and the people present here to bring about change in these sectors, and that they should not wait for the government and the authorities to do so.

• Oxfam GB and partner agencies intend to take up the cause of fair trade, which legitimately belongs to every individual. The rules that prevail today will be changed with the help of Advocacy and Capacity Building programmes.

Discussion from Participants:
 

Greater part of this session involved vibrant interaction and various queries from the participants. Some of the comments of the participants were: 

• The informal sector is badly in need of a marketing strategy, which will help them grow and develop faster.

• The quality of goods produced by these sectors has to be regularised. The quality of goods for export is much more superior to those produced for the domestic market. This difference in quality should not prevail and that all products should be produced of the best quality, this will help easy entry into international markets.

• Competitiveness is a myth. Addressing this issue the speakers opined that globalisation has increased competitiveness. Due to the presence of global commodity chain and the improvements in technology it is possible today to generate products in large and international scale by coordinating from different places using technologies such as networking etc.

• The issue of fair price for the informal sector products needs to be addressed with respect to market access in domestic economy as well. The small craftsmen of the informal sector are hardly getting actual return of their products, which stands as an institutional problem of the sector. Such problems urgently need proper redressal measures.

• Fair trade also implies ensuring dignity in the production process of the home-based informal sector.  There is need to generate awareness among the workers of this sector regarding the rules of fair trade and to sensitise them about the minimum standard of working conditions.

• Question rose on why the agricultural sector was not getting due importance. While turmeric production exhibited growth for the last 20 years trade of the same did not show any upward trend.

Finally Mita Dutta, CUTS delivered the vote of thanks.

  Regional Workshop on Non Timber Forest Product

17th and 18th July 2003 at Bhubaneswar

Sri Naveen Patnaik, Hon’ble Chief Minister of Orissa
Sanjoy Patnaik, Secretary, RCDC
Prof. Nabinananda Sen
Dasarathi Das, Acting Programme Manager, Bhubaneswar Oxfam GB’s India Office
Ms. Dalia Dey, CUTS 

In the beginning the Guest of Honour, Hon’ble Chief Minister of Orissa, Sri Naveen Patnaik lit the light for the two- day workshop. The welcome address by Sanjay Patnaik reflected his serious concern over the distress of primary NTFP collectors, mainly comprising the tribal women. He expressed good wishes for conducting a successful workshop and coming out with dynamic recommendations. 

Earlier Sanjoy Patnaik welcomed all participants and honourable resource persons. All participants were invited to introduce themselves. Apart from the representatives of CUTS, Oxfam and RCDC, this self-introductory part revealed a wide range of participation consisting of target beneficiaries of the NTFP sector, their associations, community-based organisations working among these groups, government officials, elected representatives of local self-government institutions, media persons, developmental agencies, etc. 

In his inaugural address, Hon’ble Chief Minister mentioned about the importance of NTFP in the livelihood of the tribals and other forest dwellers. He stressed that NTFP is a part of the socio-cultural life of tribal people who mainly maintain a symbiotic relationship with the forest and forest-based products. Considering the strength of the issue, his government took necessary steps after resuming power to decentralise the management of NTFP in Orissa and open up avenues for economic upliftment of tribal. 

Prof. Nabinananda Sen, representing CUTS, delivered the Keynote Address. He analysed the impact and implication of globalisation on NTFP trade, particularly in the context of multistakeholders encompassing producers, consumers, policy makers and indigenous groups. Explaining the terms globalisation and economic liberalisation, he emphasised that implication of globalisation is not clear to many of the stakeholders for which rigorous campaigning is of urgent need. His speech also enunciated Trade Related Intellectual Property Rights (TRIPs), Convention on Biological Diversity (CBD). He drew special attention to market access provisions of WTO and how developed countries are restricting free trade movement from developing nations using various non-trade barriers. Oxfam Make Trade Fair campaign had also been highlighted in the speech. 

Dasarathi Das in a short speech highlighted the rationale of the project and current activities of his organisation on poverty and livelihood issues initiatives that Oxfam is taking in Orissa. He mentioned that Oxfam is initiating the Fair Trade movement to benefit the marginalised communities. Communication gap between major stakeholders, he believed, had been solely responsible for the growing economic imbalances in the society. 

Ms. Dalia Dey from CUTS presented a brief overview depicting the objectives of the project and delineated the role and activities of CUTS in promoting Consumer Sovereignty based on social justice and economic equality within and across borders. 

The Inaugural Session ended with a Vote of Thanks by Ms. Anindita Tripathi from RCDC. 

Ardhendu Chatterjee, Service Centre, Calcutta
Rohini K Sahu, Srusti, Bhubaneswar
Ms. Sumita Sindhi, Freelance Researcher, Sunabeda
Chairperson: Sri Saroj Kumar Patnaik, Retired Additional PCCF 

Ardhendu Chatterjee focused on the wide diversity and rich traditional knowledge of medicinal plants by the indigenous people in the country. He identified the following direct links between globalisation and medicinal plants: 

·        Demand for use of medicinal species in the preparation of drugs is declining and its use in cosmetics is increasing.

·        Indian value system seems to be against the traditional medicinal system but now demand is increasing for traditional medicines.

·        Degradation of forest is on the rise and important medicinal species would become extinct, as the current development model itself is the reason for deforestation.

·        The major threat is from the patent laws – earlier only the process was being patented but now efforts are on to patent the products for about 20 years so that no one can do any further research and development on the product.

·        The Indian scientists in US are the critical players in patenting the products as well as process as they understand the availability and use of the products in India. 

He strongly recommended a vigorous campaign against proposed conversion of patenting provision from process patent to product patent. He suggested that NGOs and other civil society actors should initiate wider debate on patenting of living organisms and building up public opinion to register local traditional health practices. 

R K Sahu brought to the fore the transition from community knowledge system to property based regime through the introduction of Intellectual Property Rights (IPRs). The focus areas of his speech were types of protections, micro patents and their relevance, new patent Rule 2003, drainage of local knowledge due to promotion of capitalist and corporate interests and relevance of community knowledge and scope for protection. 

Sumita Sindhi delved deep into the issues of NTFP certification. She proposed the requirement of thorough certification process for the complete cycle from harvesting to marketing of NTFP through ‘chain of custody’ approach. This approach would be promoted through vertical linkages between the stakeholders. She advocated for the need of certification of NTFP in order to get more premium from the international markets. Referring to the positive impact of certification of defined forest area she stated that it has improved forest management systems, environmental provisions and skills She suggested that the criteria for such certification could be fair trade, organic production and sustainable management. She mentioned that 60 percent of the forest revenues and 70 percent of employment from forestry sector come from NTFP. NTFP provide 4-6 month of livelihood source to the poor forest dwellers. Elucidating the various issues and challenges in NTFP certification she focused on legal bottlenecks, low consumer consciousness and lack of experience on NTFP certification procedure in India. She emphasised the need to conduct research on NTFP silviculture, genetics and biochemistry and building institutional capacity i.e. co-operatives, Joint Forest Management committee.  

A K Mohapatra, Managing Director, Tribal Development Cooperative Corporation, Bhubaneswar
G Raju, Gram Mooligai, Bangalore
A K Patnaik, Special Secretary, Forest Department, Government of Orissa
R K Agarwal, Natural Remedies, Bangalore
Chairperson: Ram Vir Singh, IFS, Convener, Poverty Task Force 

The participation of government officials from the Department of forest added a remarkable flair to the proceedings of this session.        

A K Mohapatra mentioned that among developing countries, India is in a better position to avail of the opportunities of globalisation in NTFP trading. He urged the need to promote the national market first and then think of global market. Till now it is a trader driven market. He anticipated that the policies would become people/ trade friendly if globalisation happens but the support prices and subsidy will be removed. According to him high competition will boost up quality consciousness among the producers. 

G Raju made slide presentation on Globalisation and Changing Scenario in Medicinal Plants. He mentioned that there are about 8000 medicinal plants in India. The business of herbal products is about Rs. 4000cr, which is growing at the rate of 30 per cent. The export of medicinal species is to the tune of Rs. 400cr annually, which is next to IT and Biotechnology. He projected an in depth analysis of positive and negative impact of globalisation on herbal NTFP. He made a mention about the Bio-diversity act, which has imposed a lot of restriction of the harvesting and trading of medicinal species. He proposed to build up collective effort by NGOs working in NTFP sector and formulate very precise actions to promote NTFP trading within a stipulated cost limit. He anticipated that along with globalisation fair trade would be flourished, cultivation of some medicinal plants would be stepped up and buy back arrangements would become possible. However, he was sceptical about the effect of commercialisation, role of small cultivators and forest dwellers, rights of the forest dwellers in the changing situation. 

A K Patnaik described the link between biodiversity and sustainability of forest management. His presentation touched upon the issues of medicinal plant strategies and priorities, objectives and opportunities of national policy on Indian system of medicines, perceived threats of exploitation by intermediaries and extinction of rare species in herbal NTFP trading. He also said that scope and opportunities exist for medicinal plant linked tourism. He put special emphasis on the strategy for development of medicinal plant sector in Orissa through SMPB 2002. 

The kingpin of the discussion by R K Agarwal was impact of globalisation on medicinal plants with special emphasis on the problems faced by the primary collectors, traders and industry. He made a detailed presentation on how to ensure the quality parameters in NTFP harvesting and processing. He emphasized that what needs to be done is to promote and establish competitive markets in NTFP. His company has developed quality standard for 120 products and he expressed his intention of building up the capacity of the primary collectors on how to have quality production of NTFP. He stressed the need to provide proper training of sustainable forest management to primary collectors. He posed the problem faced by industry in getting desired quality of raw material for which more emphasis need to be given to quality control of NTFP products. He proposed that to avoid bio piracy by any other country, it will be wise to develop a database of the wealth of traditional knowledge and put it in electronic media so that the patent offices of other countries will be careful while granting any patent. 

R.V. Singh concluded the session by expressing appreciation to R.K. Agarwal and desired that the participants should carry the indication and exposure of him with a promising spirit. New opportunities are coming up. If the producers start learning how to process the NTFP products and be quality conscious, then definitely the future will be bright.

Ms. Vidya Das, Agragamee and Ama Sangathan
Nihar Ranjan Misra, Bana Banijya Samiti  
Biswajit Pande, Srusti  

Vidya Das gave a picture of tribal women’s initiative in Kashipur to procure, process and sell NTFP. She raised the legal and administrative bottlenecks in processing and marketing of NTFP in Orissa. She alleged that middlemen are benefited much in the process of NTFP marketing. She suggested that the government agencies like TDCC should provide better marketing linkages to the primary collectors. With proper processing techniques the products by illiterate tribal women can hold a better market-standard. She raised a crucial point of considering NTFP not only from the angle of commercialisation but also from symbiosis. 

Biswajit Padhi made a presentation on their work for creating alternatives at the local level to deal with NTFP. He explained the initiatives of SHGs to make Pachan Amla, Amla facial and also Triphala, which clearly brought to the fore the aspect of cost benefit. He explained that if the market can be established then there would be a substantial margin from the local value addition and enterprise development. He emphasised on the local use of NTFP and creation of alternatives for local consumption. He called for a synergic approach from all sectors for a successful outcome. 

The deliberation of Nihar Ranjan Mishra focused more on the adverse impact of globalisation. He mentioned that because of globalisation the country is losing economic sovereignty and now more emphasis is given on promotion of corporate/capitalist interests. On this backdrop cooperatives are being promoted to collect, process and market NTFP emphasising economic democratisation. The cooperatives have taken up the challenge of structuring the local market and trade. 

The daylong session ended with the vote of thanks by Sanjay Patnaik.

The second day of the workshop started with a vibrant video presentation by Rohini Sahu. The presentation traversed through a number of grassroot level examples drawn from different rural areas of the country. He explained how simple and cost-effective technological innovations and improvisations dovetailed to the existing rich traditional knowledge of the farmers and their farming techniques have been user-friendlier and have significantly enhanced productivity. Many such experiments by the scientists and technologists of the IITs and other institutions with the cooperation of the farmers have already been patented. 

There was presentation from women representatives of target group and Self Help Groups working in the NTFP sector. This was a vibrant session with the grassroots experiences narrated by the practitioners themselves. The tribal and the NGO representatives who work in the field were in the fore to express their reactions. The emerging crisis faced by the sector as came out of their deliberation comprised tedious job of collecting raw material and processing, not getting fair prices because of the exploitation by middlemen, hurdles in marketing, non availability of timely and adequate finance. Most of them mentioned that after they have been united, they are able to earn significantly higher amounts and this also enabled them to enrich the supply base to the marketing channel. Demand for more facilities and support from government for marketing the tribal products also have been stressed. 

All the participants were then divided into four groups for Group Discussion on selected thematic areas. Post-lunch sessions covered the group presentations.

Prof. Nabinananda Sen
Mr. Bijayshree Routray, Hon’ble Minister, Forests Orissa  
Vinod Kumar, Director Commercial, OFDC 

Recommendations:

The key issues and recommendations that came out of the two-day workshop were presented by Prof. Nabinananda Sen. The focal points were: 

1.      Rules and regulations are to be developed for sustainable forest management and potential assessment of NTFP.

2.      Protection, management and usufruct rights of NTFP are to be handed over to the village communities to provide livelihood security.

3.      NTFP trading in larger market to be encouraged only after meeting the local need.

4.      Infrastructure base to be developed for sharing of technical knowledge and support to the primary collectors’ organisation.

5.      Appropriate legal and operative framework to be created by the government for primary collectors’ organisations to procure, process and market the NTFP.

6.      State has to play an important role in promoting marketing opportunities of NTFP products and exploring market for non-traditional products.

7.      Proper recognition of federation model by the government in marketing of NTFP.

8.      Long term policy on NTFP need to be developed by the government, which will take care of quality parameters and sustainable management of forest and NTFP.

9.      Both the government agencies and cooperatives should announce the requirement of different produces well before the NTFP season.

10.  OFDC, TDCC, ORMAS/DSMS will not only function as trading organisation, but they would also work as facilitating organisation and they should become accountable to the cooperatives and primary collectors’ organisations.

11.  Government to create facilitating environment for Panchyat Raj Institutions (PRIs) to exercise their ownership control over NTFP.

12.  NGOs should play vital role in ensuring proper fixation of prices by the government and building up capacities of Panchyat Raj Institutions (PRIs).

13.  Government should not promote plantation/ monoculture and should not concentrate only on timber based forest management.

14.  Civil societies to pressurise the government to tune the policies and practices concerning NTFP to reality.

15.  Civil societies need to build up public opinion in favour of Community initiative in Forest Management (CFM).

16.  Financial institutions to support enterprise development based on NTFP trading.

17.  Role of media to disseminate information, to promote publicity and advocacy for the promotion and growth of NTFP trading activities.

18.  Civil societies should play an important role for generating consumer awareness on use and/or utility of NTFP and its superiority over substitutes.

Vinod Kumar advocated the issues of greater consumer demand for agro produce, greater productivity level, increasing demand for certification, popularisation of success stories and environmental audit and media coverage.  

Honb’le Forest Minister of Orissa, Sri Bijayshri Routray chaired the Valedictory Session. He put forward a comprehensive analysis of current status and emerging trends of NTFP trading in Orissa against the backdrop of globalisation and economic liberalisation. He raised the issues of increasing importance of the forest, encouraging women participation, operation of JFM with dynamic objectives and need for ecological awareness campaigns. 

Vote of thanks by Nirmalendu Jyotishi, RCDC marked formal conclusion of the two-day workshop.

 Regional Workshop on Handloom

28th and 29th July 2003 at Hyderabad

D. Narasimha Reddy, Project Coordinator, CHIP
Bipul Chatterjee, Director, CUTS, Jaipur
G. Venkata Swamy, Former Union Minister for Textiles
B. V. Subba Rao, President, CRE, Hyderabad 

D. Narasimha Reddy welcomed the participants of the workshop and explained the objectives of the workshop. He further explained the schedule for the two days.  

Bipul Chatterjee referred to the Tenth Five Year Plan which had recognised the importance of the Indian informal sector. However, there is no budget allocation to match to this recognition. He stated that though WTO is aiming to make trade free, the rules framed for this to happen are being interpreted to suit the interests of a few developed countries. To obviate this, a number of initiatives have been taken up. Oxfam has initiated Make Trade Fair campaign with a belief that international trade can help in poverty alleviation and sustainable development. He projected the contribution of handloom sector in providing large employment to people in India. He mentioned when the textile quota regime ends on 31^st December, 2004, India needs to take advantage by linking up organic cotton production with handloom sector to enable value addition to handloom production. He expressed hope that the year 2005 holds the promise of a better future for India, but also stressed the need for better policies and programmes. 

G. Venkataswamy lamented that despite enormous hard work put in by handloom weavers, their income has not risen, and is in fact shrinking. He felt anguished that in the process of liberalisation and modernisation the specific handloom skills are being lost. Due to problems in this sector, many weaver families have diversified into other areas and power looms. He wanted the governments to focus on policies which improve the living and working conditions of the handloom weavers. He pointed out that there exists a large market for handloom products. He proposed independent institutions to do research and help the weavers in improving their marketing skills. 

B. V. Subba Rao mentioned that despite the supposed policy focus, government has not been able to reduce rural poverty and unemployment. Government has the role and responsibility of providing social security. He brought it into sharp focus that the question before the country today is how to restore the self-esteem, self-confidence and self-respect of handloom weavers. Further, he said, handloom sector requires support from a broad spectrum of the society, and not just from within.

Session I: Changes in Handloom Sector

Macherla Mohan Rao, Founder President, Rastra Chenetha Karmika Samakhya (RCKS)
Karnati Venkatesham, Member, State-level Handlooms Programme Coordination Committee
Ande Narasimha Rao, President, Andhra Pradesh Chenetha Karmika Sangham
Tadka Yadagiri, Lecturer, Nizam College, Hyderabad
Chair Person: D. Narasimha Reddy 

Macherla Mohan Rao said handloom sector is being squeezed by the globalisation and economic liberalisation policies. Major change in handloom sector can be seen after the 1985 textile policy. This policy allowed import of new textile machinery, cotton and yarn. The number of looms decreased by nearly two lakhs within the one year span of 1985 to 1986. According to him, technology upgradation has always been associated with increased exploitation of handloom weavers. He highlighted the positive impact of reservation policy. He expressed his anguish over the fact that modern looms to a large extent have copied the traditional knowledge and have been demonstrating those varieties as created by them.  

Karnati Venkatesham mentioned that handloom sector is in severe problems. He emphasised the need to bring government’s attention to the problems being raised in the workshop. It is imperative to take suggestions from intellectuals basically to protect the handloom sector. 

Ande Narasimha Rao stated that some of the policies are being introduced ignoring the protests from handloom weavers. Powerlooms are being pitted against skill-based cloth production. WTO agreement is leading to problems in handloom sector. Due to improper access to yarn, and lack of proper support to market their products, handloom weavers have been committing suicides. Handloom sector with the support of other sectors has to fight these policies. 

Tadka Yadagiri focused on the changes in handloom sector after 1985 textile policy and economic liberalisation policies brought in 1991. Presently, there is an argument that one needs to look into opportunities under the WTO regime. However, the need of the hour is to understand the present conditions. Competition, quality and price are the three criteria on which handloom sector is supposed act upon once the textile quota regime is phased out.  He mentioned that powerloom production in the total textile production is increasing because of globalisation and economic liberalisation. 

Ms. Manjila, Handloom Weaver, Kerala
Sridhar, Thanal, Kerala
Prof. Jamal Kunju, Kudumbasree (Poverty Alleviation Mission), Kerala
P. B. Muhammed, Kerala
Chairperson: Prof. K. Sudhakar Reddy, Dept. of Fine Arts, Andhra University 

Ms. Manjila spoke on the problems being faced by them in Kerala which are much similar the problems in Andhra Pradesh. She pointed out that because of severe competition from powerlooms, handloom sector is suffering. As a result, unemployment is increasing and wages are also very low. The burden on women is more since they have to work on the looms and also complete the family chores. Highlighting the exploitation by the intermediaries, she said that handloom weavers should be able to market their own products, avoiding intermediaries.  

Sridhar spoke on his assessment of the situation in Kerala. The state has very strong cottage industry, of which the biggest are agriculture, fishing, coir and handloom sectors. Lakhs of people are dependent on these sectors. But employment in handloom is decreasing. He cited the example of Kannur district in Kerala where no. of workers in handloom sector  has drastically come down from 80,000 to 18,000. He mentioned that Kerala has two different patterns. Northern Kerala is mostly export-oriented, and the southern Kerala produces for domestic market only.  

Prof. Jamal Kunju stressed the need to tackle the intermediaries so that the handloom weavers get proper return. According to him non-availability of yarn is big problem.  He explained that handloom implies producing commodities with hands and not with sophisticated machinery or technology.  He raised the issue to advocate people to wear the handloom cloths. Here he mentioned that the cost of handloom cloth is much higher than that of power loom cloths which the poor people are unable to afford. The value addition to handloom products aboard is much higher than what the weaver gets for his production. He put special emphasis to provide proper education to the handloom weavers.  

P. B. Muhammed spoke of two distinct groups in Kerala: traditional and non-traditional weavers. They belong to different classes and castes. Families who are still sticking to traditional varieties are below poverty line. He proposed that handloom weavers need to explore new ways to survive. Reiterating the problem of middlemen he called for the initiative to find way out to avoid the middlemen. He narrated the collaborative initiatives from their organisation with Andhra Pradesh and other states to initiate programmes helping the families to face poverty with skills, confidence and knowledge. 

Prof. T. Sudhakar Reddy is his remarks said that although most of the issues raised in the discussion merits serious pondering, some positive impact of globalisation on handloom weavers also needs to be taken care of.  

Tadka Yadagiri, Lecturer, Nizam College, Hyderabad
Yeshala Ashok, General Secretary, AP Karmika Chenetha Sangham
Ele Bhikshapati, Rastra Chenetha Karmika Samakhya
Dusa Munender, Weavers Cooperative Society, Karimnagar
Madaka Rammohan, Chittoor district
Shankar, Emmiganur, Kurnool district
Chair Person: Kodanda Ram Reddy, Dept. of Political Science, Nizam College, Hyderabad 

Tadka Yadagiri said in Andhra Pradesh, the government has a favourable thinking towards globalisation and economic liberalisation policies. He stressed the importance of implementation of previous projects in terms of their efficacy and access to the intended beneficiaries. Budgetary allocations have been decreasing for the handloom sector. He mentioned that patenting of handloom varieties needs to be taken into serious consideration. 

Yeshala Ashok appreciated the initiative to organise such workshops on handloom sector. Many societies of handloom weavers are closing down because of lack of work. There is an opinion among the government circles that handloom would not be able to withstand the WTO-related trade. Agitations by labour unions against privatisation have been going on in Andhra Pradesh. He emphasised the need for united movement by handloom weavers to pressurise the government for making policies in favour of the sector. He also criticised the policy of imposing high taxes on raw materials for handloom weavers. 

Ele Bhikshapati said handloom sector is in crisis, and is decreasing in size. Many weaver families are encouraging their children to find alternative employment. Today, organisations working for the welfare of handloom sector are divided in terms of thinking, and are not able to come together. Many popular handloom varieties are on the decline. Opportunities available earlier for handloom weavers earlier are not seen today. There is a need for struggle for revival of the handloom sector through mobilisation of handloom weavers. 

Dusa Munender articulated that handloom is a globally recognised, oldest profession. There is still lot of scope for this profession to prosper. He expressed his grief over the present neglect in government policies for handloom sector. He reiterated the need to unite and mobilise handloom weavers to rejuvenate the sector. 

Madaka Rammohan portrayed their activities for the welfare of the handloom weavers. With their successful endeavour, government has issued identity cards and houses for the handloom weavers. They also worked to identify forged weaver cooperative societies, which had been gnawing into funds allotted for handloom weavers. 

Kodandram in his remarks emphasised the need to understand and analyse the age old problems faced by the sector as also the emerging challenges of liberalised trade regime. In the context of WTO-motivated trade regime, impelling need is to work upon a programme to clear myths and misunderstanding among the people, which probably would help develop proper policies. 

Shankar pinpointed the issue of helpless conditions of the poor handloom weavers. He stated that many looms are lying idle, despite enormous handloom market for sarees and in other niche areas. However, a few weavers who turned traders are earning enormously. He mentioned that apart from the government, weavers also need to change their attitude through knowledge and information.  

Kodandram in summing up emphasised the need for united struggle to overcome the problems like marketing and availability of raw material, critical conditions of weavers, suicide, hunger deaths, etc. The policies would come about only when the weavers would understand their responsibilities, rights and requirements more thoroughly. There is a need to understand the changing dynamics within the sector for proper perspective and approach, individually and socially.  

29^th July, 2003  

Ms. Kalpana, Sangamitra Society, Pochampally
Ms. Shashikala, Weaver
Chair Person: Macherla Mohan Rao, Founder President, Rastra Chenetha Karmika Samakhya (RCKS) 

In his opening remarks, Mohan Rao illustrated the vital role of women in handloom sector. Pre-loom processing is entirely done by women. Also, on the loom, women do assistance and even weaving. In addition, they take care of family needs, children and their needs, etc. Thus, they have multiple responsibilities.  

Ms. Kalpana said sixty percent of the work in tie and dye variety of weaving is done by women. She brought to fore the distress of women who are working for more than sixteen to eighteen hours everyday. Women participation in debates related to their profession is limited because of illiteracy and language problems and lack of information on. globalisation and economic liberalisation as also on different government welfare activities and women schemes. She emphasised the need to organise more such meetings which enable women to learn and participate fully and effectively. The debate organised in Pochampalli on 27th July, 2003 (done as part of this workshop) helped larger participation of women. She said media has to take the responsibility to bring about awareness among them. She went on explaining that because of marketing problems, the self-help movement among women weavers has not been a great success. While the raw material prices have increased, there has not been commensurate increase in prices of their products. She proposed that through a linkage with women groups in other sectors, the market for handlooms can be expanded. She also threw light on the issue of modern consumerism adversely affecting traditional, cottage industries.  

Ms. Shashikala referred to a number of problems faced by them. She says women do not get any social or family recognition of the work done by them. Economic benefits for such work are entirely ruled out. In their family, they tried out alternative professions since handloom weaving was not fetching sufficient earning.  

Mohan Rao projected the link between export-orientation, increased physical burden and accumulation of problems for women. Operation of Jacquard loom which is used for production of export varieties is very strenuous. He opined that such export-oriented production, basically necessitated by globalisation, increased the stress on the health of women.

Participants were divided into five groups. Issues were divided into five groups. These Groups were asked to come up with recommendations related to each of the issues identified above. Each of the Group selected their own Coordinator who presented the summary of the discussions.

Chair Person: Tadka Yadagiri, Lecturer, Nizam College, Hyderabad  

All the five groups presented the summary of their respective group discussions.

Chair Person: Dr. Naresh Sharma, Dept. of Economics, University of Hyderabad  

The spotlight of discussion in the session mainly focused on possibilities and requirements of patenting of handloom products.  The major points emerged out of the discussion were need for patenting traditional varieties of handloom products and benefit of community patenting.  

At this point Nishant Pandey from Oxfam GB, Hyderabad, talked about the need to present the recommendations in two broad categories. One part highlighting the handloom sector as a whole, and the other part dealing with the relationships between handloom and powerloom and dynamics within the handloom sector. This differentiation would help understanding the recommendations more clearly. He also proposed to think of some sort of community patenting which is being done in other areas already. He also raised the point of varying performance between handloom centres of different areas. Sridhar responded to Nishant’s query by explaining that in Kerala, there is a place where two communities have been producing for two different consumers – expensive and cheap. This also indicates that there is huge diversity in handloom.  

Bipul Chatterjee said community patenting is a good idea. He also put special emphasis to look into the mechanisms for the intended beneficiaries. There should be a definite mechanism for community sharing of the benefits coming out of community patenting.  

Naresh Sharma in his remarks said there are problems with the patenting. He pointed out that unlike textile sector, there are no research institutions for the handloom sector. Reservation has to be done at the level of the production to protect the handloom sector.  

Prof. Jamal Kunji put forward the suggestion to form a Handloom Welfare Board to cater to the social needs of the handloom sector. Mohan Rao said when law is not being implemented and the welfare of the people is being compromised, it would not be wrong to ask the government to implement the same. He emphasised that the relationship between the employer and employee should not be based on exploitation but sharing of labour and the value of the production.  

Harikrishna from Textile Committee, Government of India, gave his personal opinion. He said one should not expect government to market the handloom products. Weavers should develop their own markets. In response, Mohan Rao made it clear that the demand is not that government is to market the products. But, considering its contribution to the GDP and employment government can help the sector by asking departments like Defence, Railways, SC, ST hostels, and others to buy handloom clothes. This would help the sector to sustain.

Chair Person: Konda Laxman Bapuji  

Recommendations:  

1.       Raw Material: Yarn prices have to be reasonable, decentralised spinning mills have to be established, tax on hank yarn should be removed, colours should be provided at affordable prices, training should be provided on designs and colours, protection of designs and varieties.  

2.       Production: Supreme court order on handloom reservation should be implemented, patenting of all handloom varieties, research on loom improvement, implementation of minimum wages act, implementation of second national labour commission, provision of working capital and credit facilities, subsidies for handloom equipment.  

3.       Mechanisms: Autonomy for handloom cooperatives, higher budget allocation, direct marketing process, publicity and advertisement for handloom products.  

Bapuji appreciated the recommendations and considered most of those as purposeful. He stated that cooperative sector was considered as an answer to many of the problems faced by handloom sector long back in 1940s. Now cooperatives are very weak and it has no leadership. In this regard, the recommendations of this workshop are appropriate. He said handloom reservations should be implemented by the Central Government.  He mentioned that Shivraman Committee and Abid Hussain committee had brought out some good recommendations. However, he criticised Satyam Committee recommendations which in his words proved detrimental to the sector. He called for strong public pressure which would force the government to rethink on the recommendations of Satyam Committee and other such policies. To promote the interests of handloom sector he recommended the establishment of an independent weavers representative body - elected, non-official, non-commercial body, supported by the government. Everyone in the sector including the Master Weavers should be member of the body. This body should coordinate the development of handloom sector. Only the members will be entitled to get the raw material and other benefits.  

Nishant Pandey mentioned about the programmes organised by Oxfam GB for the handloom sector. He declared that soon Oxfam would organise an exposure trip of handloom weavers to Rajasthan. Oxfam GB has a long term programme for the handloom sector.  

At the end, D. Narasimha Reddy thanked everybody for participating in the workshop.

Regional Workshop on Handloom

7th and 8th August 2003 at Ahmedabad 

D.D. Bhuptani, Chairman, ICECD
Rajeev Mathur, Director, CUTS
Ms. Hina Shah, Director, ICECD 

D.D. Bhuptani inaugurated the one and half day's workshop. In his welcome address he welcomed representatives from CUTS and all the participants of the workshop and gave a brief introduction of ICECD. He also talked about effects of globalisation. He said that globalisation is inevitable, the policies should be framed such a way the maximum benefit can be reaped. 

Rajeev Mathur in his keynote address, gave the overview of the GELIIS project and set the tone for the conference by precisely identifying the issues at hand. He explained how the forces of globalisation and economic liberalisation were affecting the Indian informal sector and what were the issues that needed serious deliberation. He also stressed on make Trade Fair Campaign launched by Oxfam, GB whose aim is to ensure effective implementation of extant trade rules and to endow the grassroots procedures in developing countries with gains of free trade. 

Ms. Hina Shah said that globalisation should be taken positively.  She cited example of tea, which was originated in China and with time has become one of the most popular drinks worldwide. This is nothing but a glaring instance of globalisation of commodity. She pointed out the inability of Indian policy maker in taking advantage of globalisation Referring to the South Korean case she mentioned that both the countries got independence in 1947 with same per capita income and same growth strategies. But in 1970s South Korea opted for export substitutions and now its GDP is $13,417 compared to India’s GDP of $ 277.  She emphasised the need to eradicate poverty through globalisation by strategising proper policies.

Zaverbhai Chavda, Member of Handloom Board
Ms. Manda Parikh, RUDMI (NGO)
Prabhash Ranjan, Legal Researcher, CUTS
C.D. Kalker, Bank of Baroda
Ms. Usha Jumani, Jumani Foundation 

Zaverbhai Chavda spoke on technical aspects relating to Handloom sector. He discussed the problems that the weavers are facing because of increased competition from power loom and the economic liberalisation process. To remedy this situation, he argued for more government intervention in the form of subsidies. He then went on to deliberate that though machine made items are cheap and homogeneous, they can hardly emulate indigenous and creativity of the handloom weaver. He enunciated that preference for cotton fabrics has increased worldwide and therefore the demand for handloom products has also got a boost. Hence handloom sector has a great future. He also discussed the present unemployment in the handloom sector and called for a review of the labour laws. 

Ms. Manda Parikh highlighted the marketing and market related aspects of handloom sector. She started her presentation by stating that globalisation is a reality and is here to stay.  She emphasised the need of  different sub-systems:

i)   Input - Output sub-system

ii)  Processing sub-system

iii) Technology sub-system

iv) Marketing sub-system 

Projecting the contribution of handloom sector in total GDP and its employment potential, she emphasised the need for a decentralised marketing system, which would take care of problems of small producers. To develop markets and foster marketability of Indian handloom products, she advocated a cluster-based approach that can deal with the Global Marketing System. The role of credit for Micro Enterprises was also emphasised for easier availability of credit. She also advocated the need of developing the process of quality standardisation, quality equalisation and brand equity in the handloom sector to enhance markets and marketability. 

Prabhash Ranjan expressed his views on the legal dimension of the handloom sector. He endeavoured to put the legalities of the handloom sector in proper perspective by identifying the context in which the handloom sector is presently placed. He first identified the relevant International Trade Agreements under the WTO that could have a possible impact on the handloom sector. After providing the broader picture of international trade law in terms of challenges and opportunities, he went on to scrutinise the efficacy of domestic legislation on handlooms to meet these challenges and opportunities. The Handloom Act of 1985 was analysed and the need to re visit this Act in light of the changed economic scenario was emphasised. The need to have a comprehensive law on standards in handlooms was also advocated. 

Mr. C.D. Kelkar shared different bank policies in the workshop.  He categorically explained the availability of abundant credit with the Nationalised Banks and that too at lower cost.  Govt. has launched Technology Upgradation Fund (TUF) Scheme, which offers interest subsidy. He emphasised the need to develop better entrepreneurial capabilities, which in turn would help in developing better credit utilisation propensities. Government will have to play a proactive role in providing support services to industry to help it compete in international market. He said that the future prospect of handloom sector is immense and in next five years period the demand for ready made garments is going to increase worldwide and also in India.  

Ms. Usha Jumani spoke in the context of gender issues related to this sector.  She argued that the handloom sector employed a lot of women and thus the growth of the sector had a direct linkage with women empowerment. Mentioning that the status and contribution of women in handloom activities remain undermined, she put special emphasis to take up gender issues effectively.  She suggested serious pondering on the issues of recognition of women's contribution as a work