Chapter XXI

1. 2-1 Chapter XXI Marketing of Rural Artisan Products

2. Learning Objectives • Understand who is artisan and what are handicrafts? • Understand characteristics of Indian handicraft industry and its importance in the Indian context • Be aware of key areas of production of different handicrafts and craft clusters promoted for enhanced export • Learn about key export markets for exports of handicrafts

3. Learning Objectives • Be sensitized with challenges for the rural artisan sector • Understand government policy and support for the handicraft sector • Develop an understanding about the SWOT analysis for the handicraft sector • Comprehend marketing strategies for promotion of rural artisan sector

4. Introduction • India is one of important suppliers of handicrafts to the world market and the sector has been amongst India’s leading foreign exchange earners. • Export earnings from Indian handicrafts industry for the period 1998-99 amounted to US$ 1.2 billion (Rs.5,400 crore). Yet, this sector is still not completely explored in light of capability and potential that exists for it. • Central and state government entities, voluntary non-government organisations and co-operatives all are trying to achieve holistic development of Indian handicraft industry, large part of which has its origin in tiny hamlets across India.

5. Introduction • The development of rural artisan sector will lay a strong foundation for the sustainable development of the rural economy. It will lead to increased disposable income of the rural artisans who are mostly belonging to the relatively under privileged sections of society. • This will save the relatively less informed and less privileged rural artisan from the exploitative designs of traders and intermediaries, who make the maximum at the cost of craftsmen and customer.

6. Artisans • The specialists, who produce goods and render services, for and to others, are what we call artisans today. • They are heir to the traditions and make it into a work of art. • Most craft people have learned their skills from their parents and grandparents as a continuity of tradition, which is being passed on from one generation to another.

7. Artisans • As a socio economic group, artisans are amongst the poorest. Research shows that households headed by artisans, in general have much lower net wealth and almost all (90%) are landless. Some have managed to adapt to changing times, and a few even thrive but most of them live in dismal poverty. • Many of artisans have given up, and moved away from their traditional occupations. Others continue because they do not know anything else.

8. Artisans • Research indicates that majority of the crafts persons and their progeny do not want to join the crafts sector; they would not even mind the tradition coming to an end. • In one of the studies it was revealed that in more than half the traditional leather artisan households, several family members have given up leatherwork, and are working as casual labourers.

9. Handicrafts • Handicrafts are rightly described as the craft of the people. In India, craft is much more than an industry; its produce is viewed as a creation and work of art. • As Craft Council points out, no Indian craft is ever purely decorative. Most of them while fulfilling a positive need in daily life of people, also act as a medium of self-expression.

10. Handicrafts • Craft is also viewed as one of the strategies adopted by individuals/ households to support themselves and to build on their existing assets. • Task Force on Handicrafts for the VIII Five Year Plan defined the term handicrafts in 1989 as: ‘Handicrafts are items made by hand, often with the use of simple tools, and are generally artistic and/or traditional in nature. They include objects of utility and objects of decoration6.’

11. Characteristics of Indian Handicraft Industry • Highly labour intensive • Low capital investment: minimum expenditure on infrastructure or training to set up, no expensive investment in energy, machinery or technology • Cottage or home-based based industry • Unorganised and decentralized sector: spread all over the country • Part of work executed on part-time basis • Uses existing skills and locally available materials. • In synthesis with socio-cultural milieu: does not disturb the cultural and social balance of either the home or the community.

12. Characteristics of Indian Handicraft Industry • Many agricultural and pastoral communities depend on their traditional craft skills as a secondary source of income in times of drought, lean harvests, floods or famine. • Handicraft skills are a natural means to social and financial independence • Traditionally have been viewed more as a part of the welfare sector, which needs to be propped up by subsidies and grants. • Institutions (Boards and Corporations) have been set up by central and state governments for institutional, financial and marketing support

13. Nature of Indian Handicrafts Handicrafts are classified in two categories on basis of use they are put for: • Articles of everyday use • Decorative items • Woodwork: India is known for its lacquered wood articles and includes: • Ornately carved decoration pieces • Absolutely simple wooden handicrafts • Toys • Furniture items

14. Nature of Indian Handicrafts • On basis of media on which they are developed, handicraft are classified: Textile handicrafts:This segment provides employment to 5 lakh people apart from those involved in designing, block making, weaving and packing. It includes: • Hand printed textiles: block and screen-printing, batik, kalamkari (hand printing by pen) and bandhani (tie and die) for bed-covers, dress material to upholstery and tapestry. • Embroidered articles of silk and cotton often embellished with mirrors, shells, beads, and metallic pieces. • Embroidered leather, felt and velvet products.

15. Nature of Indian Handicrafts • Stone Craft: Includes carved stoneware made of marble, alabaster or soapstone, inlaid with semiprecious stones. • Glassware and Ceramic: Glass and ceramic products are a fast growing segment amongst the handicrafts that are exported from India. • Clay, Metal and Jewellery: They are made from precious metals, base metals, precious and semi-precious stones. Brass, copper, bronze, bell metals are used for a creating variety of handicrafts.

16. Key Areas for Production of Handicraft

17. Selected crafts clusters for enhanced exports

18. Country-wise Exports of Handicrafts

19. Handicraft-wise Key Target Market for Exports

20. Importance of Indian Handicraft Industry • Provides additional earning opportunity to rural population, especially during poor agricultural seasons when it is critical. • Adds to overall disposable income of rural economy. • High potential for export and foreign exchange earnings: According to the Director-General of Commercial Intelligence and Statistics, Craft exports in India were 16% of total exports, in 1972-83. From 1960-1984, craft exports earned 90 billion in foreign exchange for India.

21. Importance of Indian Handicraft Industry • Total exports of Handicrafts went up to Rs.9,27,050 crore from Rs.2,54,318 crore between the years 1992-93 to 2000-019. The average net foreign-exchange earnings for all handicrafts and handlooms is over 90% of the value of output, which is well above the level recorded by exports from more organized sectors- both small and large. • It provides employment to millions of artisans, which include a large number of women and people belonging to weaker sections of society. • The 1984 Report on Handicrafts published by the All India Handicrafts Board states that 21,76,740 people worked full time and 4,33,260 worked on part time basis for craft production. In the year 2000-2001 this figure went up to 4.761 crore persons per year.

22. Importance of Indian Handicraft Industry • The number of new jobs created by craft industries was almost as large as the number created by the private and public sectors combined. • For every rupee of value added in this sector, the capital required is roughly 1/3rd of what is needed in large industry. • For generation of employment of one person in large-scale sector it requires six to ten times more investment than in small-scale sector.

23. Importance of Indian Handicraft Industry • For a large and overpopulated country like India, only small scale can provide opportunities of work all over the country. • It can ensure more equitable distribution of national income. • This sector is maintaining the culture, heritage and tradition of a region that are so vital to the cultural identity of that particular region.

24. Challenges for the Rural Artisan Sector • Disappearing Markets: Substitution by Mass Production Goods: • Cheap plastic products have wiped out the market for earthenware in many types of handicrafts. • In hugely competitive market, advertising and global trade scenario, artisans are loosing on account of lack of viable support systems. Mass-produced goods are steadily replacing utility items of daily use made by craftspeople, destroying their very livelihood. • With ever-increasing competition from mill-made products and decreasing buying power of village communities due to prevailing economic conditions, artisans have lost their traditional rural markets and their position in community. • It means that craft producers need more support than ever if they are to become viable and competitive.

25. Challenges for the Rural Artisan Sector • Abject Poverty: In spite of the high percentage of people employed in this sector and huge export earnings most craft people live in abject poverty. The average income derived by a craftsperson is Rs 2000 per month. For an average family of five members this amounts to Rs 13.50 per day per head. • Lack of Financial Support: There is reluctance at the financial institution’s local branch level or procedural delay on account of lengthy paper work to provide financial assistance to the craft people. They sometime have to pay bribe even to get subsidies from the government.

26. Challenges for the Rural Artisan Sector • The Unorganised and Diverse Nature of Craft Activities: The nature of this industry has prevented politicians and policy makers in India from understanding or formulating effective policies or strategies by which this segment of the population can be part of a general advancement. • Lack of Proper Quality Control and Standardisation: Along with the aesthetic and traditional values that the handicrafts represent, they must maintain some degree of standardisation and quality control.

27. Challenges for Rural Artisan Sector • Correct Sizing: The sizes of the cotton made-ups need to be as per conventional standards so that the exquisitely designed fabrics and made ups can be ordered in bulk by the reselling institutions. • Lack of Training and Feedback on Product Design and Product Development: Market trends and consumer preferences for the colour, design, patterns change quite fast these days. By the time the rural craftsmen have changed to the newer set of preferences, they have already changed significantly to something different.

28. Challenges for Rural Artisan Sector • Lack of Marketing Avenues with Least Number of Intermediaries: The exhibitions, fairs and handicraft stores are now prevalent in much larger number than they were earlier. But still more needs to be done. • Fluctuating Rates of Raw Material: In carpet industry small producers making handmade carpets compete for same supplies with large factories. • Inadequate Infrastructure: The infrastructure with which rural artisans produce their handicraft is quite inadequate in comparison what there should be in order to satisfy the consumer demand.

29. Challenges for Rural Artisan Sector • Wages for the Craft People are Meager: Even the highest wages are low relative to the earnings of many others in the agriculture or other non- farm activities. Weber, in her study on Chikan embroidery workers in Lucknow, India discusses that low skilled work been promoted for very low wages. Quality of work can only be sustained if the craft people can obtain a living through working for the market. • Irregularities in the Supply of Work: It means there is forced underemployment. Even though the State Governments have opened various centers for the sale of finished products, these do not ensure sales high enough to sustain craft people (through out the year would be ambitious) even for six months.

30. Challenges for Rural Artisan Sector • Lack of Working Capital and Easier Access to Credit: Lack of finance and cash flow is crux of craft people’s problems and restricts the economic development. Inability to access government funds leads them to taking loans from local middlemen and moneylenders- at exorbitant rates of interest. This leads many Indian craftspeople into a form of bonded labour. As more than 90% of rural artisan households are landless they have minimal resources to mortgage or use as collateral for a loan. Thus, informal credit plays a critical role in the production and expansion of artisan’s enterprise.

31. Challenges for Rural Artisan Sector • Technological Obsolescence: This gives factory sector an edge over artisan sector in terms of efficiency and quality. Modern technology has enabled machines to imitate even the most intricate designs that were once the exclusive domain of the artisans. Any form of innovation implies an element of risk and investment of capital. Given that most Indian artisans live on the margin of subsistence, they have virtually no reserves to invest in technological innovation (physical capital).

32. Challenges for Rural Artisan Sector • Lack of Marketing Acumen: The rural artisans belong to lowest rungs of the caste hierarchy knowing only how to create handicrafts as means of livelihood to support their families in the hard conditions in the backward regions of the country. But, they might not be good at skills to market them in the remunerative markets in bigger towns and cities. • Lack of Access to Key Markets: Difficulty of access to urban areas that are the main markets for craft products. • Production Problems: Rural artisans lack guidance in product design and development based on an understanding of the demand of the market. Even when they know what has to be done in most of the cases they do not have adequate means to do so.

33. Government Policy for Handicraft Sector Policy Instruments: • Central and state governments formulate different policies for the promotion of artisans and handicraft sector. But, states assist particular set of handicrafts which represent a viable existing or potential export resource and manifests the cultural prominence of those handicrafts. • The Central government provides consultation, funds, grants and loans to encourage the states to boost the production and sale of their handicrafts.

34. Government Policy for Handicraft Sector • There is no dearth of schemes to provide artisans with working or fixed capital. Mayox points out that for often than not, craft people are unaware of the schemes and when they have the information there are problem in accessing those schemes. If they have heard of a particular scheme, they cannot cope with the complex procedure to avail its benefits and if they do manage to follow the procedure, bureaucratic bottlenecks and delays more often than not discourage the intending borrower.

35. Government Policy for Handicraft Sector • Review of the government plans reveals that schemes up to the end of the Seventh Plan have not been able to provide assistance to large sections of craftspeople, production–related inputs and the marketing of their products is still out of the realm of artisans reach. They largely depend on private tradesmen, or ‘middlemen’ who act as intermediaries between craftsperson and market: and reap all the profits. • The Government of India (Planning Commission, 1988) itself has pointed out the lack of coordination both at the grassroots and at the national level, as they are looked after by different departments/organisations.

36. Government Policy for Handicraft Sector • In spite of schemes that exist for them, craftspeople are unable to benefit, as there is lack of strong institutions working in their favour. Transformation in organisational structures and processes can help in increasing craftsmen’s access to schemes and services that are planned for them.

37. Institutional Infrastructure Network for Development of Rural Artisans • Khadi and Village Industries Commission (KVIC): A statutory body established by an Act of Parliament. It provides employment opportunity to 82.77 lakh persons. Central Handicraft Corporations / Bodies / Associations • The All India Handicrafts Board: The board studies technical, marketing, financial, organizational, artistic and other aspects of handicrafts and formulates plans on these lines. It also advises and provides assistance to the state Governments for planning and executing schemes for the development of handicrafts.

38. Institutional Infrastructure Network for Development of Rural Artisans • All India Handloom Board: It advises the Government on various aspects of handloom development. • Central Silk Board: Central Silk Board supplements efforts of states by providing necessary support for R&D and extension and training through its countrywide network of units. It organises production and supply of quality silkworm seed, mulberry cuttings etc. and undertakes directly and with State Sericulture Departments, implementation of various projects.

39. Institutional Infrastructure Network for Development of Rural Artisans • Jute Advisory Board: It advises Govt. on matters of Jute (Licensing & Control) Order, 1961 including production estimates of jute and mesta. • The Handicrafts and Handlooms Export Corporation of India (HHEC) is a subsidiary of the State Trading Corporation of India, which designs strategies to develop new foreign markets and expand traditional ones and to introduce new products suitable to the needs of the consumers abroad. The Corporation undertakes and executes wholesale orders, conducts retail sale operations through retail shops abroad, and participates and sells in major exhibitions of the world. HHEC also helps private exporters by affiliating them as business associates. It undertakes publicity and promotional measures for the export of handicrafts and handloom products.

40. Institutional Infrastructure Network for Development of Rural Artisans • The North-Eastern Handicrafts & Handloom Development Corporation, Shillong: Tries to develop and boost the sales of handloom & handicrafts goods from northeastern region. • The Central Cottage Industries Corporation, (CCIE): It is a registered society, which had taken over from Indian Cooperative Union. • The All India Handloom Fabrics Marketing Cooperative Society Ltd.: It is a society, sponsored and supported by All India Handloom Board.

41. Institutional Infrastructure Network for Development of Rural Artisans • Attached Offices • a. Office of the Development Commissioner for Handlooms • b. Office of the Development Commissioner for Handicrafts

42. Institutional Infrastructure Network for Development of Rural Artisans • All India Associations • There are all India organizations for India’s three most popular handicrafts items: hand printed textiles, carpets and zari. These associations serve as a platform for consultations among manufacturers and exporters on one hand and the Handicrafts Board on the other. The Board uses the following associations to disseminate information useful to craftsmen: • a. All India Carpets Manufacturers Association, District Varanasi, U.P. • b. All India Federation of Zari Industry, Surat, Gujarat. • c. All India Textile Handprinting Industries Federation, Mumbai.

43. Institutional Infrastructure Network for Development of Rural Artisans • Related Organisations • National Handlooms & Handicrafts Museum (NHHM), New Delhi • State and Union Territories Corporations / Departments • Social- Voluntary Organizations Certain voluntary organizations are running Regional Handicrafts Training Institutes for Women, under the All India Handicrafts Board. • Handicrafts Teacher's Training College (The Arts and Crafts Society), Mumbai. • Regional Training Institute of Handicrafts (Bharat Sevak Samaj), Dharwar. • Regional Handicrafts Training Institute for Women, (Andhra Mahila Sabha) Hyderabad. • Regional Handicrafts Training Institute for Women, (Karma Kutir), Calcutta.

44. SWOT Analysis of Indian Handicrafts Industry Strengths: • Indian handicraft are quite competitive on the price front because relatively low wage labour is available in the craft sector in a good number • Low capital investment and high ratio of value addition • Aesthetic and functional qualities of Indian handicrafts • Indian handicrafts have a traditional appeal • Indian handicrafts are unique and are based on age old cultures • Increasing emphasis on product development and design upgradation

45. SWOT Analysis of Indian Handicrafts Industry Weaknesses: • Inconsistency in quality • Inadequate market study • Inappropriate marketing strategy • Lack of adequate infrastructure and communication facilities to develop/modify handicrafts as per market • Limited capacity; so Indian craftsman and organisations can handle relatively smaller orders • Untimely delivery schedule; becomes a challenge in demanding export markets • Unawareness of international standards by many players in the market

46. SWOT Analysis of Indian Handicrafts Industry Opportunities: • Rising appreciation for Indian handicrafts in the developed countries • Widespread novelty seeking buying behaviour • Large discretionary income at disposal of consumer in developed countries • Growth in search made by retail chains in major importing countries for suitable products and reliable suppliers. • Use of e-commerce in direct marketing

47. SWOT Analysis of Indian Handicrafts Industry Threats: • Better quality and reliability of products produced by competitors from Europe, South Africa, South Asia, etc. • Better terms of trade by competing countries • Consistent quality and increasing focus on R&D by competing countries • Better packaging of handicrafts exported from other countries • Stricter international standards

48. Marketing Strategies for Development of Rural Artisan Sector • Market Research: Rural artisans need to conduct at least informal market research to understand the changes in the preference of customers with respect to colour, shape and design. • Entrepreneurial Training: Provision of entrepreneurial training for rural artisans can help them to better manage their micro-enterprises.

49. Marketing Strategies for Development of Rural Artisan Sector • Niche Marketing: Price competition has been intensified by increasing quantity of Chinese and Asian products. • Non-institutional Credit (by NGOs etc): This can be of vital help for purchasing raw materials or to expand production systems and assist in breaking out of the stranglehold of technological obsolescence and also to ensure quality production.

50. Marketing Strategies for Development of Rural Artisan Sector • Establishment of Web Presence: Internet is very effective tool to establish an organisation without the help of intermediaries. • Support in Establishing Retail Outlets: Govt. can help the organised co-operatives of craftsmen to establish retail outlets in the cities where there can be good demand for rural craftwork. • Provision of Marketing Platforms by Voluntary Organisations: Voluntary organisations can provide a platform for marketing of handicrafts, learning and experience sharing amongst rural crafts entrepreneurs.