Tuesday, August 4, 2009

Mat(Madur)InduatryOfSabong

INDIA IS TRADITIONALLY a country of artistic crafts and handicrafts. For a long period of time these craft works in India were found to be concentrated in specific geographical locations based upon a system of occupational specialisation which in small segments of community created a special art folk. Mat weavers, specialised in weaving of varieties of mats constitute a section of such Indian art folk.
The history of mat weaving in India dates back to the Indus Valley Civilisation. Its socio-cultural relevance can be had in ancient literature. Records of the Medieval Period provide the first information of mat weaving in West Bengal. Further, authorities like : Hunter (1876), O’Melley (1911), Porter (1933), Mitra (1951) and others have highlighted the socio economic aspects of mat industry during the 19th and 20th centuries.
Mats in India are of different kinds and are produced in different parts of the country. However, the finer variety of mats, especially manufactured from madur grass (Cyperus tegetum) is concentrated in south-eastern part of the district of Midnapore. Weaving of mats has developed itself as an important cottage industry in the district, offering employment to rural masses, particularly the women and children in villages. The industry thus helps them to earn subsistence income. The production of mats, if taken together, accounts for Rs 6 to 7 crores in the aggregate annual income of the district.
In spite of such positive aspects, no systematic and scientific study has yet been attempted on the industry. Endeavour has, therefore, been made for a systematic study into the different aspects of mat industry in the district of Midnapore. An independent primary survey has been conducted with a view to studying the general features of the industry, its organisational and capital structure, aspects of employment and output, marketing network and also the cost-price structure. Attempts have also been made to provide some recommendations in the form of suggestions which can help the industry to overcome its present problems and finally to attain the standard level of efficiency.
However, just one comprehensive study cannot be sufficient to fill the gaps in knowledge about the industry which is of very ancient in origin and is relevant even today for rural economic development. The present study is restricted to the economic analysis of a sample of 303 mat weaving units drawn scientifically on the basis of ‘Stratified Multi-Stage Sampling’. Since the present study is first of its kind, further research on other dimensions of the industry deserves proper attention. The present study may provide basis for further research. It appeared in the process of the present study that an indepth interdisciplinary study of the industry may be highly rewarding.
Methodology and Sample Design
Essentially, the study is explorative in nature and based on primary data collected through field investigation. The technique of ‘Multi-Stage Random Sampling’ has been adopted for the purpose of sample selection. Initially from the 220 mat producing villages of police station Sabang, 35 have been selected as sample villages after two stage stratifications. Thereafter, from each selected single and double mat producing sample village, 10 per cent of the mat weaving households subject to a minimum of 5, have been selected as sample units on random basis. However, for masland producing units, complete enumeration has been made. Thus, altogether a total number of 303 sample mat weaving units have been selected for intensive study. Data have been collected through personal contact from sample units. Analysis of data
has been made with the help of manually operated calculators. The time period covered by the study extends for a period of two years from 1988-89 to 1989-90.
Salient Features of Mat Industry Information collected from field survey reveals that mat industry in the district of Midnapore typically represents the nature of a household industry.
Production by the units is run in a household environment with the active
participation of household members. As such, the units in general are tiny in size. In terms of number of looms possessed, it is seen that nearly 86 per cent of the sample units are having one loom, while 14 per cent of the units operate with double looms. In terms of the number of artisans employed and annual value of output also, the mat weaving units by and large are smaller in size.
Weaving operations of the units are carried on within the dwelling premises of the weavers. For all the sample units studied, work place is found to be attached to the dwelling place of the artisans. In fact, poor resource capacity and engagement of family workers, particularly the women and children in productive activities do not require a separate work place.
In terms of duration of work, sample units have been classified into seasonal and perennial units. Data shows that 63.7 per cent of sample units are perennial in nature and the rest 36.3 per cent are seasonal. This indicates that majority of the mat weaving units carry on their operations almost throughout the year.
Study as to ownership pattern reveals that the industry runs absolutely under individual ownership. Existence of ‘co-operative units’ or ‘joint owned units’ is not evident. Inheritance is the general mode of acquisition of units.
Of the total sample as many as 76 per cent of units are inherited and 24 per cent have been started afresh. Among the newly started, 18 per cent have emerged as separate units for family fragmentation and the rest 6 per cent, in reality, are completely new endeavour. Before undertaking this endeavour most of them were daily labourers. Possibility of financial support from Governments and other institutions have encouraged them to undertake this new venture, The traditional mat weavers are Baities by caste. But it is found from the study that of sample size of 303 units, only one unit belonged to Baiti caste. The traditional cultivators, i.e., Mahishyas, at present are the dominating caste in natural mat industry. Thus, traditional caste nexus in mat weaving is already disturbed and the industry at present conforms to the class structure rather than caste structure of society.
Production process of mat manufacturing is traditional and involves a number of labour intensive activities. The whole process of production consists of three distinct phases : (i) pre-loom weaving, (ii) loom weaving, and (iii)post-loom weaving. Pre-loom weaving phase consists of preparation of basic raw-material i.e., cultivation of mat sticks, the processes of sizing and dyeing them according to requirement. The manufacturing of finished mats through setting the sticks by threads on loom forms the part of loom-weaving. Throughout the whole process of mat manufacturing it is the most important and time consuming part. On the other hand, cutting of stick edges or in cases, covering the stick ends by coloured clothes and polishing, form the final phase of post-loom weaving.
Technology as well as tools and equipments used in mat weaving are age old and highly labour intensive. Besides, the tools are fabricated locally and are usually purchased from local markets. Many of the units inherit these from their ancestors.
Organisational and Capital Structure of the Industry From the stand point of nature of involvement, mat weaving units are classified into three important categories of organisation like : (i) simple, (ii) semi-composite, and (iii) composite. Lack of adequate resources to cultivate basic raw material of their own or procuring those in bulk at early stage, restrict the operations of simple units to loom weaving and finishing. Units of semi-composite organisation on the other hand, collect unfinished raw material, duly season and size them in required form before use. But the entire processes of production right from stick cultivation to post weaving finishing are completed by the composite units. The scope for cultivation of raw material facilitates these units to weave mats according to their own choice and preference. Results of field investigation reveals that, 73.6 per cent of sample units are of composite nature, followed by simple units (17.8%) and semi-composite units (8.6%). This distribution indicates the dominance of composite organisation in mat weaving pursuit.
Fixed capital investment in the mat weaving units is small. Units of simple and semi-composite organisations possess looms and some other accessories as their fixed assets. For the composite units, fixed assets include the value of land used in cultivation of basic materials over and above the items of looms and accessories. The investment in fixed assets of the sample units varies in between Rs. 385 and Rs. 18,580. Variation in the quantum of fixed capital investment, is for the reason of variation in the constituent items, particularly the land, the number of looms in possession and for using a few more tools and accessories.
Stock of raw materials consisting of stock of mat sticks, stock of threads, stock of colour and dye and stock of gum, is the lone component of working capitals. Other likely components of stock of finished goods, semi-finished stock, credit due to units and cash in hand or bank do not exist in the industry. Difference in stock holding period for different items of raw materials gives birth to differences in working capital investment in between Rs 56 and Rs 2565 among the operative units. Among the components, stock of mat sticks is the most important and it accounts for 95.9 per cent of the total.
Distribution of sample units in working capital investment ranges, shows that 81 per cent of the units operate within an investment range of Rs. 1000. Average investment in productive capital by the mat weaving units varies widely from Rs. 485 for a unit in simple organisation to Rs. 6237 in composite organisation. However, product-wise classification of such investment does not show any significant variation. In the total capital structure fixed capital occupies a relatively more important place compared to working capital. For all the units fixed capital constitutes 92.5 per cent in the total productive capital. While for units in simple and composite sectors, fixed capital is more important, in semi-composite units working capital is dominant. Analysis of capital structure in terms of products, indicates that in all product categories fixed capital is predominant.
The industry suffers from paucity of funds in general. Observation from field survey shows that 43.4 per cent of the units run their operations solely on own resources; while 56.6 per cent have to depend on external agencies.
Dependence over external agencies ranges in between 44.5 and 59.7 per cent among units in different organisations and 53.3 to 60.3 per cent when units are shown in terms of product categories.
Among the sources available for borrowings, commercial banks play the most crucial role. Loans from commercial banks constitute 59.7 per cent of total borrowings, and those from Government agencies and co-operative societies are 26.9 and 4.9 per cent respectively. These are not sufficient to meet the credit needs of the units. For the reason of lower rate of interest, units in general, try to mobilise funds from these organised sources.
In practice the private money lenders charge higher rate of interest. Yet the weavers prefer to borrow from them because they do not insist for sufficient security. The process of negotiation is also very simple and direct as against complex process and requirement of securities of organised sources.
This source constitutes 4.4 per cent of the total borrowed fund. Even to meet their short term requirement, incidence of borrowings by the units is to the extent of 4.1 per cent from friends and relatives.
Employment and Output
Employment structure of the industry shows that production of mats are basically run by household workers. Only in few cases, engagement of outside labourers is evident, particularly, to complete the processes of pre-loom weaving phase. Of the total sample of 303 units, only 6 units constituting 2.0 per cent of the total, employ hired labourers in loom weaving over and above the services of family workers. From the study of the occupational background, it is evident that two-thirds of the units are controlled and managed by middle aged persons of whom a significant portion (32.4%) are illiterate. Hence, there exists very little scope for the occupation to come out of hereditary bondage.
Among the units studied, 57.9 per cent units are seen to be primarily dependent on mat weaving, and for the rest of the households representing 42.1 per cent of the total sample, mat weaving is the secondary source of income.
Classification of workers shows that women artisans are the most predominant among the mat weavers. Even the children of families are seen to take part in mat weaving in significant number. Results of field survey show that employment of woman workers forms 58.1 per cent followed by men and children to the extent of 29.3 and 12.6 per cent respectively. The size structure of employment by the number of workers shows that the maximum concentration of sample units is in the employment size of 1 to 4 workers.
The occupation of mat weaving being an artistic pursuit demands precision and high level skill, particularly in weaving of exquisite maslands. The total work force employed in sample units into skilled and unskilled workers shows that seggregated 60.6 per cent of the workers are skilled and 39.4 per cent are unskilled. Dominance of skilled workers is highest (85.1%) in masland weaving units followed by double mat weaving units (63.2%), while dominance of unskilled workers (53.3%) is evident in the single mat weaving sector. Organisation-wise distribution of skill factor discloses that in all the organisations, there is the dominance of skilled workers.
Both the finer quality of masland and the coarse varieties of mats, viz., single and double mats are produced as the principal items of production.
Product mix of the industry shows maximum concentration in single mat weaving 55.0%), followed by double mat (30.0%) and masland (15.0%). The output size per unit both in terms of value and volume, is very low. The smaller size of operations as well as the use of traditional technology are found to be the responsible factors for the low volume of output. Variation in output size is noticed among units in different product varieties. The monthly output size of double mat weaving sector is the highest and this is on an average Rs. 625 per unit. Variation in monthly output for a unit varies between Rs. 583 and Rs. 469 in response to variation in organisations. However, concentration of units is found to be in the monthly output value range of Rs. 200 - Rs. 600.
Capital output ratio, i.e., the amount of capital required to produce a unit of output in the industry is Rs. 0.89. This varies with the variation of organisations. Variation extends from 1.20 unit in composite organisation to 0.11 unit in simple organisation. The value of the ratio seems to be higher (1.07 unit) in single mat weaving sector than that of (0.89) in masland weaving or (0.69) double mat weaving. The reason behind such high proportion of capital output ratios is for the lower amount of output produced by the productive units of the industry.
The labour output ratio or productivity of labour on an average is Rs. 1788 per worker in mat industry. The ratio varies in between Rs. 2797 and Rs. 1523. When the ratio is worked out against product varieties, the variation ranges from Rs. 1860 to Rs. 1708. Among others, the level of skill and competence of workers are identified as factors responsible for the variations in labour output ratios.
Marketing Aspect of Mat Industry
Structure of marketing shows that mat products are sold to its users through some specific channels. A multiple number of middlemen play their respective roles in these distributive channels. Among the five distinct middlemen in the market, mahajan paikars are the most influential ones.
Sales of finished mats are effected through some specialised village markets, conventionally known as hats. There are as many as 11 such markets in Sabang. Among them 8 markets are weekly and the 3 others are bi-weekly. These markets are situated within a distance of 3 - 5 kilometers from the mat producing units. Variation in the value of transactions is noticeable from Rs. 1,50,000 to Rs. 5,000 in a particular market day depending on specific advantages in one market over the other.
The process of marketing of finished mats is the traditional one. All sales and purchases are performed in cash, be it with the direct users or withthe middlemen. However, prices of mats, on a particular market day, of different varieties, sizes and qualities are determined by paikars. Such price determination is influenced by users demand and seasonal fluctuations.
Customer-wise distribution of sales shows that, direct sales to users constitute 14.3 per cent while sales to middlemen are to the extent of 85.7 per cent. Product-wise distribution of sales reveals that 35.5 per cent of maslands are sold directly to users mostly under ‘work on order’ basis and the major part of the other products is sold to intermediaries. Sales to intermediaries account for 91.8 per cent for single mat and 92.4 per cent for double mat. Among the intermediaries mahajan paikars alone purchase 48.8 per cent of total mat produced.
Unlike other industries, mat weavers do not require to incur any marketing cost to sell their finished products.
Among the problems of marketing lack of adequate weaver-user linkage,near absence of organised marketing support, absence of initiatives for product diversification, inadequate programmes for demand generation are identified as the most important ones.
Cost - Price Structure
Analysis of cost structure of the industry under the accounting concept of cost, reveals that under fixed cost category, major cost components are depreciation and interest on capital. Interest on capital borrowed and the imputed value of interest on own capital taken together, form the total interest cost. Other possible items of fixed cost are rent and insurance which have not been considered for this purpose.
Under variable cost heads, raw materials, wages, fuel and light, repairs and maintenance have been considered. Except the wages, all these costs have been calculated on actual basis. However, for wages of family workers, imputed value has been considered along with wages paid to hired labourers.
Distribution of different cost elements shows that variable cost accounts for 90.1 per cent and the proportion of fixed cost in total cost is only 9.9 per cent. Component-wise cost analysis shows the dominance of wage cost (60.2%) followed by raw material cost (28.6%). Cost of fuel and light (0.4%) and repairs and maintenance (0.9%) are too insignificant in the cost structure. Except the imputed value of interest cost (7.4%), other fixed cost items like depreciation (0.7%) and interest on borrowed capital (1.8%) are not of much significance.
Variation in cost elements as per organisations shows that in composite organisation, proportion of fixed cost is more (12.8%) than that in semi-composite (2.4%) and simple (l.8%) organisations. Product-wise distribution of cost elements indicates that in masland weaving units, wage cost (66.3%) is significantly high and raw materials cost (24.6%) is considerably low. The phenomenon conforms to the exquisite nature of masland variety.
For mat industry, ex-unit cost has been considered. Prices of mats widely vary depending on the size, variety, quality and demand situation. Demand pattern is again influenced by seasonal fluctuations. Since peak season price of mats significantly varies from slack season price, average prices have been taken for profitability calculation.
Profitability of mat weaving units has been estimated on the basis of difference between cost and price for products, following the standard accounting norms. Under this calculation it shows that all the sample units on an average sustain a loss to the extent of 19.7 per cent. Variation in loss between 29.4 and 4.5 percent is noticed when units are shown as per organizations. However, product-wise distribution of units shows that the extent of loss varies in between 2.9 and 45.8 per cent.
As per the perception of the weavers, cost means the cost which is usually known as ‘out of pocket’ cost. Imputed cost is never considered by the weavers as part of cost-of their production. Accordingly, if from the cost worked out as per accounting concept, the elements of imputed cost are eliminated, mat weaving occupation becomes a profitable one. It is more so because the producers can use free family labourers. Such calculation of profit shows that the operating units in the industry can earn profits to the extent of 62.2 per cent. Organisation-wise analysis reveals the earnings by units in semi-composite division as much as 70.1 per cent followed by the
units, composite (63.3%) and simple (53.5%). Such profit earnings as per product division shows that double mat producing units earn comparatively more (67.9%) than their counter parts engaged in masland (60.2%) and single mat weaving (58.7%). Thus, when the opportunity cost of labourers, particularly, the women and children in the villages is zero, the industry earns reasonable profits or surplus as is generally believed to be by the mat producers.

This is a doctoral thesis of MANISHANKAR MAITRY, published in FINANCE INDIA, Vol. X No. 3, September 1996.
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