Introduction

Chapter 3

TRADITIONAL INDUSTRIES IN KERALA

The discussion in the. last chapter inter alia showed that

industrial cooperatives in India are concentrated in traditional

industries. The industrial cooperatives in modern industries

accounted for hardly 6 percent of the total units and 2 percent of

the total membership of the aggregate industrial cooperative sector

in the period 1984-88, the latest years for which such data is

available. The promotion of industrial cooperatives in modern

industries has been rather haphazard and often a reaction to

isolated events rather than the result of any clear-cut policy of

the state. In sharp contrast, the development of cooperative

production in traditional industries has been the official policy

of the state. We therefore restrict our study exclusively to

industrial cooperatives in traditional industries in Kerala. The

choice of Kerala for the detailed study is also guided by the

consideration that the state has the highest number of industrial

cooperative members per lakh of population in the country. Besides,

state of Kerala has an industrial base dominated by traditional

industries. The present chapter gives a brief overview of the

nature of Kerala economy and discusses in detail the evolution and

characteristics of the traditional industries.

In section 1 we outline the emergence of traditional

industries. Their significance in the general context of the Kerala

economy is analysed bringing out its key role as a residual

employment sector absorbing the surplus population. In section 2 we

summarise the distinguishing features of traditional industries

with reference to technology, organisation of production, markets,

nature of capital and standard of living of the workforce. In

section 3 the contemporary crisis of the traditional industries is

analysed.

Section 1

Significance of Traditional Industries in Kerala Economy

Kerala with its low per capita state domestic product is one

of the economically backward states in India (see table 1). Its low

economic status mainly is due to the relatively poor performance of

its industrial sector. The agricultural sector is relatively more

dynamic with the dominance of high valued commercial crops like

coconut, rubber, tea, coffee and spices. In 1989-90 while the value

added in a hectare of land was Rs 9517 in Kerala, it was only Rs

5234 at the all-India level.

The coexistence of a dynamic agricultural sector with the

manufacturing sector of slow and stagnant growth rate has long

historical roots. The colonial integration of the region, even in

administrative terms by the nineteenth century, accelerated the

commercialisation of agriculture. Northern part . of Kerala was

directly under British rule and it made up the Malabar district of

Madras Presidency. The central and southern parts of Kerala were

under the indirect rule of the British and constituted the princely

states of Cochin and Travancore. The revenue pressures on the

princely states was largely responsible for various measures they

83

Table 1

Structural Characteristics of the Kerala Economy

Per capita State NSDP

1991-92

( 1) ( 2)

Andhra Pradesh 5570 ( 4) Assam 4230 (10) Bihar 2904 (14) Gujarat 6425 ( 3)

Karnataka 5555 (5) Kerala 4618 (8 Madhya Pradesh 4077 (11) Maharashtra 8180 ( 2) Orris a 4068 (12) Punjab 9643 ( 1) Rajasthan 4361 ( 9) Tamil Nadu 5078 ( 7) Uttar Pradesh 4012 (13) West Bengal 5383 ( 6) All India 5781

Notes: Figures in bracket indicating ranking; NSDP = Net State Domestic Product; Agl = Agriculture; Ind = Industry; PHAVA = Per Hectare Average Value Added * The contribution of various sectors of each state to NSDP is only available till 1988-89 therefore we have used 80-81 figures to calculate per capita productivity

Sources: Basic Statistics relating to States of India, September 1994, CMIE, Bombay

undertook to promote commercial agriculture and trade and revenue

from the latter formed their main income. There was also phenomenal

expansion in world demand for many products that could be grown in

the region and this external stimulus proved to be a prime mover in

the expansion of agriculture and changes in the cropping pattern.

The growth of trade provided impetus to the development of an

extensive transport network consisting of road, rivers and

backwaters. Another facet to be noted is the sharp increase in

84

population. In 1911 the population density in Kerala was the second

highest among the various Indian states. The growth of population

in the 1911-61 period was almost threefold the national average1.

By 1961 Kerala became the state with the highest population

density. The expansion in population rapidly increased the

requirements of food that had to be either grown within the state

or imported from outside. Given the facility for unlimited import

of rice from abroad at relatively favourable terms of trade for the

cash crops such as coconut, rubber, tea, coffee, spices etc., which

could be grown in the state, the latter became an attractive

option2• There was a rapid change in the cropping pattern in favour

of commercial crops. In the low land coconut replaced the paddy

while various plantation crops rapidly claimed the forest lands in

the hills. There was also expansion of cheap carbohydrate

substitute for rice like tapioca that almost became a staple diet

of the poorer sections. By 1931, 45 percent of the crop land in

Travancore was accounted by commercial crops while in Malabar,

where the conditions for commercialisation were relatively weaker

due to the persistence of traditional landlord system and

undeveloped nature of land and credit markets, the proportion of

commercial crops were relatively lower at 34 percent3•

The products of commercial agriculture had to be processed

before they could be exported. Thus commercialisation of

agriculture gave rise to many agro processing industries distinct

from the cottage industries that had primarily catered to domestic

consumption such as hand pounding of rice, toddy tapping and

distilling, basket making, mat weaving and village crafts for house

construction and tool making. Industries based on coconuts occupied

85

an important position among the new industries that carne up4. Copra

drying yards and copra traders sprang up in distant villages and

power driven small scale oil mills in towns. In terms of employment

the development of coir industry was more significant than oil

mills. Coir yarn spinning became the major source of employment

· after agriculture along the co as tal tracts.. Extraction of coir

fibre and spinning of coir yarn had a long historical tradition in

Kerala. But weaving of coir mats and matting with coir yarn was an

industrial process innovated by European firms in the middle of the

nineteenth century5. The coir weaving industry rapidly flourished

and was localised in and around the town of Alleppey. Till the

First World War rice mills and tea and coffee processing

establishments constituted the main food industries. During the

interwar period processing of cashew nuts rapidly grew, centred

round the town of Quilon, into the premier food processing

industry6. The abundant forest wealth and growing export of wood

gave rise to timber yards and saw mills. Kallayi became one of the

largest timber markets in Asia7.

The colonial domination and import of manufactured clothes

were a serious blow to the traditional weaving industry in Kerala.

Available evidence showed its rapid decline during the nineteenth

century. However, the weaving industry in the region received a new

stimulus by the intervention of the Basel missionaries8. The

missionaries in their efforts to create new job opportunities

outside the traditional caste system for the Christian converts

introduced many pioneering industries. They set up handloorn

factories based on superior fly shuttle looms producing non

traditional items of cloth that had assured markets outside the

86

region. At the end of the first decade of the century they had

established five weaving units employing 1394 workers. Similarly,

it was they, who introduced tile making into Malabar where they set

up four units employing 1134 workers 9• Calicut became a major

center of tile factories. Many tile factories also came up in

Quilon. The distribution of industrial employment in the region in

1921 is summarised in table 2.

Table 2

Industry Structure in 1921 (Numbers)

Travancore Malabar Industry

Units Employment Units Employment

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

Tea 51 8710 ( 3 5) 13 603 ( 4) Coffee 5 1704 ( 11) Oil 7 109 ( 1) Other food 7 237 (1) 49 1871 (12) Rubber 5 706 ( 3) 6 590 ( 4) Coir 90 5729 ( 23) 34 2609 (16) Weaving 33 797 ( 3) 58 3075 ( 19) Wood 4 330 ( 1) 13 904 ( 6) Tobacco 14 373 ( 2) Monazite 2 235 (1) Brick & tile 36 3357 (13) 24 3412 (21) Salt 7 303 ( 1) Printing 11 724 ( 3) 19 351 ( 2) Metal 4 721 ( 3) 3 399 ( 2) Others 8 3168 (13) 3 171 ( 1)

Total 258 25017 (100) 248 16171 (100)

Note: figures in () show percent share to total

Source: Decennial Census 1921, Quoted in Thomas Isaac and Michael Tharakan 1986 p.l2 and Kerala Sastra Sahithya Parishad, An Overview of Industrialisation in Kerala, (mal), Ernakulam 1986 p.10

It is not surprising that the commercialisation of agriculture

led to the development of agro processing industries. But what

needs to be explained is the peculiar trajectory of industrial

87

development that made it a relatively much more important claimant

on the workforce of the state, a distinctive feature of regions'

development. The literature on proto industrialisation though

generally focused on the experience of Europe, would throw some

light of this phenomenon in Kerala. Protoindustrialisation has been

identified as a distinct .stage in the industrialisation process

where large scale cottage manufacturing is organised by urban

merchants in subsistence farming regions for export to national and

international markets. But the empirical findings on the

prerequisites that determine the spread of proto industry in a

region have often been contradictory10 • Recent studies suggest that

links between subsistence agriculture and cottage industry were not

exclusive and that proto industrialisation did take place 1n

regions of commercial cereal agriculture and in regions of

subsistence agriculture.

The data for the year 1961 (see table 3), the earliest year

for which such information is available, shows the peculiar

structural specificities of Kerala agriculture. Population per

hectare of gross cropped area was the highest in the state and it

was more than twice the national average. The population per

hectare of food grain cultivated was also the highest; and it was

almost five times the national average. The food grain produced per

unit population was among the lowest, (after Rajasthan and West

Bengal), and less than one third of the national average. This was

despite the fact that per hectare productivity of food grain area

in Kerala was among the highest and around 75 percent higher than

the national average.

88

Table 3

Agricultural Scenario: 1961

State Pop./GCA Pop./FGA FGP/Pop. FGP/AP FGP/FGA

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

Andhra Pradesh 3045 3959 157 442 623 Assam 4667 6310 131 456 824 Bihar 4183 4678 143 449 668 Gujarat 2112 4272 124 445 531 Jammu and Kashmir 4402 12112 147 447 1779 Kerala 7196 20766 57 448 1186 Madhya Pradesh 1779 2098 273 658 572 Madras 4602 6603 140 509 926 Maharashtra 2101 3245 172 513 558 Mysore 2228 3110 149 464 463 Orissa 2899 3968 204 633 809 Punjab 2087 2946 272 1218 802 Rajasthan 1438 4974 18 50 91 Uttar Pradesh 3394 4012 175 597 704 West Bengal 5496 6591 27 154 181 India 2876 3788 187 626 710

Notes: Pop.: Population, GCA: Gross Cropped Area, FGA: Area under food grains, FGP: Food Grain Production, AP: Agricultural population (Agriculturists + Agricultural Labour)

Sources: Data for gross and net cropped area and agricultural population has been taken from, Central Statistical Organisation, Statistical Abstracts of India 1966, Cabinet Secretariat, New Delhi, 1966 and those for foodgrain from Centre for Monitoring Indian Economy, Agricultural Production in Major States: 1949-50 to 1987-88 Crop wise Data, CMIE, Bombay, April 1989

The heavy dependence on the agricultural sector was compounded

by the asset pattern, especially the land holding. The data for

1961 indicates that Kerala had the highest percentage of rural

households without any land holdings 11 • Similarly, the number of

rural households with less than one hectare of land, was as large

as 73 percent as compared to the national average of 44 percent.

Unlike in other parts of India, where the surplus labour was

absorbed in agriculture the agricultural sector in Kerala had a

relatively less elastic labour absorption capacity due to the

predominance of tree and other plantation crops. This prevented the

89

agricultural sector from absorbing the residual labour force as in

other regions. The high density of population and the resultant

scarcity of land required that the surplus population in the Kerala

economy be accommodated in other sectors. The result was a growth

in non agriculture occupations and the emergence of new resource

based industries, from a very. early period, as compared to the rest

of India.

The peculiar characteristics of the Kerala economy were

noticed even at the beginning of the century. The Decennial Census

of 1921 noted that "the comparative preponderance of industrial

population in these states (Travancore and Cochin) is due not to

the infertility of the soil or its unsuitability to agriculture but

due to certain natural advantages enjoyed by them which have

directed many people than in most other parts of India from

agriculture to industrial occupa tion12 ."

The traditional indus tries, which emerged along with the

commercialisation of agriculture, thus became an important avenue

for absorption of the surplus labour. They became a major source of

industrial growth and employment. For reasons that are beyond the

scope of our present discussion, the development of alternative

employment opportunities for the growing population in the modern

industrial sectors have eluded Kerala even during the post

independence period. Consequently, the traditional industries

continued to play the vital role of accommodating the growing work

force.

90

Section 2

Characteristics of Traditional Industries

The discussion in the last section has already brought out two

important characteristics of the traditional industries viz. ( i)

their link with local resource and (ii) their export orientation.

Only handloom and beedi industries depended upon imported raw

materials. Neither cotton nor beedi leaves or tobacco was being

cultivated in the state. Since the raw material supply for most of

the industries were locally available in abundance their supplies

were fairly elastic. The constraints to industrial expansion were

mainly from the demand side. Given the narrow basis of the domestic

markets, demand from abroad was the main stimulus for industrial

growth.·

It is interesting that almost all these industries were

concentrated in the major and minor port towns of Kerala. The fact

that almost all these industries were very much dependent on export

trade, especially in the early decades, would be one of the reasons

for this localisation. The growth of coir and cashew industries can

be almost exclusively attributed to the growth of foreign export

markets the tile industry was also dependent on outside the state

markets including foreign exports. It is surprising that even beedi

and handloom industries in northern Kerala which depended on

imported inputs, also largely grew in response to demand from

outside, both within the country and abroad.

91

Technological Basis of Production

The distinguishing feature of traditional industries is the

traditional handicraft technological basis. The motive power is the

manual labour of workers. In the early stages of industrialisation,

the technological basis of production does not undergo any change.

At best, the labourers are brought together in common work yards or

sheds by the employers in order to have better control over the

quality, regulation of skilled labour power or for the purpose of

introduction of limited division of labour. It was the labour

intensive technological basis of the traditional industries that

enabled them to play the vi tal role of a residual employment

sector.

Some industrial production process did not use even

rudimentary tools but just relied upon the craft skill of the

workers. The best example would be beedi rolling. The only tool

used by the worker was the scissors to cut the wrappers of

appropriate size from the tendu leaves. The production process only

required that tobacco flakes be placed across the cut wrapper leaf

that is then rolled into a conical shape by a twist of the fingers

after which the ends are closed and the beedi tied up. Similarly,

not even elementary tools were used in the processing of coir

fibre. Coconut husks retted in brackish water, were beaten with

wooden mallets to remove the pith and the fibre manually cleaned

and dried. The coir fibre was then spun into yarn using a simple

manual spinning wheel called ratt. In northern Kerala not even the

ratt was used for spinning13 . The fibres were twisted between the

palms of the hand and spliced together to form appropriate lengths.

92

Hand spinning facilitated the spinning of yarn of softer twists.

The looms in which coir fabrics was woven were an improvement of

the handlooms, but much larger _and sturdier to facilitate the use

of coarser coir yarn. In the coir weaving factories steam power was

used only in the baling process. In cashew industry in the place of

open pan roasting of nuts, hot oil bath roasting technique came to

be used14 . The new technique also did not require machine power.

The main process of extraction of nuts was undertaken by women, who

shelled the kernel with the help of little wooden rods and their

bare fingers. Surveying the above techniques of production one is

left to wonder whether it would have been possible to devise more

labour intensive process!

Even when innovations were introduced in the traditional

industries there was no break 1n the handicraft base. We have

already mentioned the introduction of handlooms and frames in the

coir weaving industry. Another important example is the handloom

technologies introduced by the Basel missionaries in the cotton

weaving factories. These new looms were far superior to the looms

in usage and allowed for significant product diversification. But

there was no move towards power loom production. Similarly, the

technology in the tile industries was also labour intensive. It is

not that alternative machine technology was not available. In fact,

some of ~he very firms that owned coir handloom weaving factories

in Alleppey were associated with powerloom mills abroad 15 . But it

was found that handicraft handloom production was cheaper in the

Kerala region and that a powerloom factory could not compete with

the cheap handicraft production16 •

93

Petty Production organisation and Dominance of Merchant Capital

The handicraft technology and the simple nature of the

production process did not provide much scope for division of

labour and therefore economies of scale. On the other hand,

establishment charges could be reduced by allowing the labourers to

be self employed in their own houses or in small scale production

units. The scattered nature of production was also well suited to

the fluctuations in the export demand. The best illustration of the

scattered petty production organisation of traditional industries

was the coir yarn spinning. Almost the entire hand spinners were

self employed in their own houses 17 . In rare instances merchants

directly employed labourers to process fibre in work yards to be

supplied to the hand spinners. In ratt spinning where productivity

levels were relatively higher, the production was more organised18 .

But even here typical production units employed one or two ratts

where the family members worked alongside with few hired workers.

Only in the district of Trivandrum did the large scale ratt

spinning units became significant so that hired workers became the

dominant segment of the labourers. In Trivandrum the share of units

with one ratt each was only 33 percent in 1955 as compared to 70

percent in the whole state19 . Similarly, units with three or more

ratts formed 34.6 percent of the units in Trivandrum while the

comparative figure for the state was only 11.7 percent.

Only cashew processing and coir weaving saw the emergence of

large scale manufacturers. In coir weaving the scale of production

units was a response to the need for control over labour skills and

labour turnover during the early decades of the century. But we are

94

not able to give a rational explanation why the cashew industry has

been organised on a large scale from its inception. Supervision in

a single work yard may have been easier method for prevention of

pilferage of cashew kernels by the shellers.

In the beedi and handloom industries the organisation of

production showed significant regional variations, the influence of

which has survived to this day. These industries have been more

organised in northern Kerala than in the south. Within handloom

weaving, there existed a large segment where production units were

organised by the master weavers. The weavers either worked in their

own homes or in the small scale units owned by the master weavers.

Equally important was the production undertaken by the independent

units. Most of them were indebted to cloth merchants and totally

dependent upon them. Few of them were purely independent weavers,

who catered to the demand in the locality. These forms of small

scale production dominated central and southern Kerala. In

contrast, factory scale handloom units dominated the industry in

~orthern Kerala particularly in the north Malabar region. Superior

randloom technology and diversified production structure that

required closer production supervision gave rise to these large

scale establishments. Even in 1921 th<=>r.e were 58 large weaving

establishments employing 3075 workers in Malabar ?S compared to 33

units with 797 workers in Travancore (see table 3). By 1940 the

number of such units in Malabar had increased to 144 20

Similarly, beedi rolling in most parts of Kerala particularly

in the south was undertaken by individual beedi rollers, who also

operated local pan shops. However, in north Malabar large units

95

employing more than a hundred workers producing beedi under a

single brand had made their appearance by the 1930 's 21 • Better

supervision of quality could possibly have been one of the

advantages of centralised production. The large scale of production

in some traditional industries in short rested on a fragile b~se.

They could survive only as .long as any serious diseconomies of

scale failed to surface.

An important consequence of the scattered nature of the

production units was the preponderance of intermediaries and the

domination of merchant capital in the traditional industries.

Intermediation was required for the supply of raw materials to the

small scale producers either because the raw materials had to be

brought from outside as in the case of beedi and handloom

industries or the raw material had to be collected from the

scattered agricultural farms as in the case of coconut husks and

cashew nuts. The export demand could be catered only by the large

scale exporters in the port towns who dominated most of these

industries. The husk merchants in coir industry and the yarn

merchants in the handloom industry were infamous for their shrewd

operations. The coconut being a small-growers crop in Kerala, the

husk had to be collected from a wide stretch of area and brought to

the retting sites in backwaters. The retting required blocking up

of capital for fairly long periods and therefore it was rarely

undertaken by small scale producers. Therefore, the husk merchant

was also the commercial retter. It has been estimated that a few

commercial large retters (with a turnover of more than 50000 husks)

monopolised 74 percent of the retted husk market though they formed

only 10 percent of the total retters. 22 Because of their control

96

over the husk market, the commercial retters were able to set the

price of husks. Similarly, the yarn spun by the petty producers was

sold to the local vendors to ~holesalers in bazaars and finally to

the exporters in the port towns. The long range of intermediaries

not only absorbed the surplus produced but often denied the petty

producer even his subsistence. Statistical analyses have proved how

the husk prices have tended to move closely with the yarn prices

denying the petty producer even little advantage that may accrue in

periods of price buoyancy. The largest share of the surplus went to

the exporter23 The export market largely controlled by half

a dozen European coastal trading firms who often worked in

collusion with each other. Some of these coastal trading firms were

also owners of large scale coir weaving and cashew processing

units. Thus, it may be argued that they had direct interests in

production. However, given the low level of fixed investment

required in these industries their production interests were

peripheral. The strength of larger capital lay in the control of

markets.

The Subsistence Standard of Living of the Workforce

Given the low productivity of handicraft technology and large

number of intermediaries often involved in the product and raw

material markets the actual producers did not even receive bare

minimum subsistence. The conditions of work in the early years, as

described in the minimum wage's committee's reports, were very

infamous with below subsistence wages and the work place lacking

even the basic amenities 24 . The wages were very much below

subsistence level and the conditions of work were harsh. Work time

97

often extended from before sunrise to late in the night. The work

sheds were unhygienic and lacked basic amenities. The employment of

the workers depended on the whims and fancies of the employer who

often usurped a significant share of workers income using very

primitive methods.

The situation of the self-employed domestic workers was worse

than that of the wage labourers. According to the Minimum Wages

Committee Report 1959 the average earnings of coir spinners were

highest at 10 annas in the larger workyards in Trivandrum25 .

Average earnings of a coir spinner in central Kerala dominated by

single ratt owning household units were only Rs 0.80 to Rs 1.65 1n

the mid sixties. 26 In contrast the average earnings of hand

spinners in Malabar were only a pal try Rs 0. 42 to Rs 0. 60. An

examination of the actual work hours of the hand spinners reveals

that they worked two to three longer than the ratt spinners. It was

abnormally low wage costs of hand spun yarn that sustained hand

spinning against inroads by ratt. As we noted before, it was the

cheapness of labour that gave the handicraft a competitive edge

against superior technology.

Not only was the wage rate low in the traditional industries

but there was also high level of underemployment. High incidence of

underemployment is inherent in the very logic of a residual

employment sector. Customary division of labour and regional

product differentiation ensured a sort of sharing of the available

limited work among the entire work force. The work in the

traditional industries was often seasonal in nature and closely

followed the fluctuations in demand in the export markets. Apart

98

from the low wage rates the severe underemployment also depressed

their earnings.

The emergence of the trade union movement was a response to

the above abominable conditions. Not surprisingly during the

preindependence period the trade

confined to the organised sector.

union movement was largely

It was in the Alleppey coir

weaving industry that the first union emerged in early 1920s27 •

Before the middle of thirties unions have been formed in the major

centres of traditional industries like Quilon, Calicut, Feroke and

Kannur. The depression period saw a general transformation of the

trade unions in terms of militancy and radical politicisation. The

general labour surplus situation created by the depression,

increased inter capitalist competition and decline in product

prices resulted in sharp deterioration in working conditions and

reduction in wages. Militant struggles broke out against the wage

reductions, arbitrary fines and deductions and for government

intervention in regulating the service conditions through extension

of Factories Act and other labour legislations. These struggles

were partly successful and significantly contributed to the

improvement in the labour

establishments 28 .

conditions in the large scale

The expansion of the trade union movement in the unorganised

sectors of traditional industries was a post independence

phenomenon. Demand for statutory minimum wages became the chief

slogan of labour agitations. By the early sixties the wages in all

the major traditional industries were regulated by Statutory

minimum wages. Implementation of the minimum wages became a

99

rallying point for trade unions in various localities and demand

for their periodic revision a central demand for state wide

campaigns. As a result the wage rates in all the traditional

industries began to climb up. Initially the early minimum wage's

committee fixed only a flat wage rate. But the later committees

also began to recommend a. variable dearness allowance linked to

cost of living index apart from the basic wages. There was even

improvement in the real wages.

Lacking any published time series data regarding the wage

rates in traditional industries we are forced to rely on the trend

as indicated by the wage rates that are periodically fixed by the

various minimum wages committee reports. The wage rates fer major

activities in each of the traditional industries for selected years

are given in table 4a. The real wages deflated by the cost of

living of industrial workers are given in table 4b.

As seen in Table 4A the nominal minimum money wages 1n the

cashew industry increased significantly in the late fifties and

again in the late sixties. The increase in coir and tile industry

minimum wages was very significant in the latter half of the

sixties. The beedi industry also registered a significant i~crease

in wages in the sixties. The increase in money wages was also

reflected in the real wage rates (see Table 4B) . In the cashew

industry the real wages peaked in the early sixties whereas in the

coir industry the real wages declined from mid fifties to :he mid

sixties and then registered an increase. But real wages in the

beedi industry increased from early fifties to early sixties after

which it declined. The data for the tile industry shows that it

100

declined significantly between 1958 and 1965 after which it revived

to some extent by 1969.

Table 4a

Increase in Nominal Minimum Wage Rates in Traditional .Industries

(A) Money Wages

Cashew Industry 1958 1960

Shelling (per Kg) 0.15 Peeling (per kg) 0.19

Source: Bmam Beevi A J, 1978 Kannan K P: 1981

Coir Industry

Counting of raw husks* Counting of retted husks* Putting husks into pits*

0.35 0.40

Taking out husk from pits* Beating the fully retted husks* Cleaning with willowing machine** Cleaning manually Spinning*** Hand spinning Beypore (kg) Quilandy (kg} Thirur choodi (kg)

* thousand husks ** hundred husks

1956

0.37 0.50 1. 75 1. 75 1.12 0.44 0.57 2.50

(Rupees)

1967

0.36 0.44

1964

0.46 0.56 2.00 2.00 1. 40 0.55 0.70 3.00

0.22 0.27 0.28

1975

0.76 0.94

1971

0.92 1.12 4.00 4.00 2.80 1.10 1. 40 6.00

0.44 0.54 0.55

*** Angengo yarn 13-14 score, 2807 rn runnage

Source: Thomas Isaac T M, 1990

Beedi Industry

Year 1952 1958 1963 1964 1965

!Rolling* 1.14 1.50-2.95 2.10-3.00 1.87-2.82 2.30

Note:* +For rolling thousand beedis Source: For 1952, 1964 & 1965: Government of Kerala, Report of the Minimum Wages Committee for Beedi and Cigar Industry, Trivandrum, 1965 For 1958: Government of Kerala, Report of the Tripartite Committee for Beedi and Cigar Industries, Trivandrum, 1958 For 1963:the wage rates were notified by IRC in Mathrubhumi dated 1963 December 9

Continued

101

Tile IndustrY Average minimum wages

1958* R 1965** N 1965** R 1969

Class A 2.5 2.68 1.95 4.10 Class B 1. 75 2.43 1.70 3.85 Class c 1.75 2.18 1. 45 3.60 Class D 1.75 1. 93 1. 20 3.35 Class E 1. 44 1. 72 1. 00 3.15

*The wages refer to those in Trichur area which are put in l three categories namely skilled workers like carpenter,masonl and blacksmith, unskilled workers and other workers **The wages are given for three regions (Quilon, Calicut andl Cannanore, Ernakulam, Alleppey and Kottayam and Trichur and I Palghat regions 1

R=Recommended, N=Notified I Source: Government of Kerala, Report of the Minimum Wages I Committee for Employment in Tile Industry, Trivandrum, 1958 I Government of Kerala, Report of the Minimum Wages Committee I for Revision of Minimum Wages for Employment in the Tile I Industry, Trivandrum, 1970

Table 4B

Increase in Real Minimum Wage Rates in Traditional Industries

Real Wages (CPI: Trivandrum 1939=100) I Cashew Industry (Rupees) I

1958 1960 1967 1975 I I !

Shelling (per Kg) 0.03 0.07 0.04 0.05

! Peeling (per kg) 0.04 0.08 0.06 0.05

Coir Industry I

1956 1964 1971 !

Counting of raw husks* 0.09 0.08 0.10 I I

Counting of retted husks* 0.12 0.10 0.12 I I

Putting husks into pits* 0.45 0.36 0.45 I Taking out husk from pits* 0.45 0.36 0.45 I

I

Beating the fully retted husks* 0.28 0.25 0.32 I I

Cleaning with willowing machine** 0.11 0.09 0.12 I Cleaning manually 0.14 0.12 0.16

I Spinning*** 0.64 0.54 0.68 Hand spinning I Beypore (kg) 0.04 0.05 Quilandy (kg) 0.04 0.06 Thirur choodi (kg) 0.05 0.06

Continued

102

Beedi Industry

Year 1952 1958 1963 1964 1965

Rolling (I 000 beedis) 0.32 .36-.72 .42-.56 .33-.50 .38

Tile Industry Average minimum wages

1958* R 1965** N 1965** R 1969

Class A 0.61 0.44 0.32 0.49 Class B 0.42 0.40 0.28 0.46 Class c 0.42 0.36 0.23 0.43 Class D 0.42 0.31 0.19 0.40 Class E 0.35 0.28 0.16 0.38 Note: Refer notes of 5A Source: For consumer price index see State Planning Board and Bureau of Economics and Statistics, Statistics for Planning: Serial No 5 Prices, Trivandrum 1972

Section 3

Nature of Crisis in Traditional Industries

The rise in the wages however has often been accompanied by

decline in employment. In fact, growing underemployment and

consequent decline in real earnings has been the key manifestation

of the contemporary crisis in traditional industries. Accurate

trends in the employment data in these industries are not

available. Even the census data has serious limitations for inter

temporal comparisons arising from changes in census definitions and

efficiency of enumeration. It is particularly true of employment in

the household sector with high incidence of underemployment and

female workers.

103

Table 5

Structure of Employment in the Coir Industry

Category Employment

1.Retting 50000 (11) 2.Spinning

Hand 119000 (27) Ratt 97000 (22)

3.Defibreing 132000 (30) 4.Manufacturing

Mats weaving 15000 ( 3) Matting 4700 ( 1) Rechanting 2700 ( 1) Rope making 12000 ( 3) Rubberised coir 1100 ( 0) Allied work 11000 ( 2)

5.Total 445900 (100)

Note: Figures in parentheses indicate rank

Source: Coir Board, Annual Report, 1980

Even by official statistics of factory employment, the number

of cashew workers has tended to decline in the eighties, from

104727 in 1983 to 59505 in 1990 29 • The days of employment in the

cashew industry also declined steadily in the sixties and

seventies. The three digit's industrial classification for the

cashew industry from the 1971 and 1981 censuses are only for the

main workers. The census figures estimate ~he main workers in the

cashew industry to be 72280 in 1971 and 26755 in 1981. The break up

of workers in the coir industry as given by the Coir Board are

given in tabl~ 5. These estimates were made from various studies

made in the early sixties and include part time and marginal

workers. Coir Board has not published any revised estimates of

employment in the recent period. Examining the trends in the

industry it is obvious that the estimate would have to be seriously

revised downwards if it has to reflect the present employment in

the industry. For example, it is universally accepted that there

104

has been a decline in handspun yarn and therefore the number of

handspinners would probably be 30 to 40 percent of the coir work

force in the sixties. Simila~ly due to the spread of mechanical

defibreing there would also be a significant decline in the number

of people engaged in this activity. In fact the estimates made by

the Department of Economics of the Kerala Government places the

employment in the industry between 2.7 to 2.8 lakhs 30 • A declining

trend in employment in the coir industry is also confirmed by the

trends revealed by the census data. The total workers in the coir

industry were 251078 in 1961. The number of main workers in the

industry was 158607 in 1971 and 46178 in 1981.

The handloom industry also registered a significant decline in

employment. The 1961 Decennial Census estimates the number of

weavers to be 65413. The state wide handloom census in 1968 also

made a comparable estimate of 50674 workers in the industry31 . The

second handloom census in 1976 showed an increase in weavers to

1, 76138"'. But the third census in 1987-88 put the number of weavers

to be only 47155 33 • This sharp decline in number of handloom

weavers is also reflected in the census data on main workers in

1981 that estimates the main workers in handloom weaving to be

49107. The only exception to the declining trend in employment is

the beedi industry where there has been an increase in employment.

The Decennial Census data where 1971 and 1981 figures are

restricted to main workers alone shows that even the number of main

workers in 1971 and 1981 was higher than the total employment in

the industry in 1961. The total workers in the industry were 64311

in 1961 while the number of main workers alone increased to 89834

in 1971 and 119000 in 1981. These estimates of beedi employment are

105

severe underestimates as the growth of the industry in the eighties

was mainly accounted by the spurt in employment in the household

sector. But the Decennial Census data shows that the household

sector main workers have declined from 55 percent in 1971 to 47

percent in 1981. The informed opinion, which puts the share of

household employment at around 65 percent, indicates the extent of

d . t. 34 un erest1ma 1on .

There are three many factors, which have contributed to the

decline of traditional industries. A set of factors related to the

migration of some traditional industries to the neighbouring states

or the displacement of workers through mechanisation. Both these

phenomenons have been the response of the employers to labour

militancy and rise in the wage rates. They also attempted to

circumvent the militant union and statutory legal obligation

through decentralising the production. We shall first examine the

responses of these industries to unionisation and rise in wages,

and then proceed to analyse issues related to crisis in the raw

material markets and the decline in the demand for the products of

traditional industries.

Structural Changes in Traditional Industries

The rise of trade union movement and consequent erosion of

cheap labour based industrial base has had serious consequences. As

we noted, it was the large scale establishments that were the

centres of trade union activities and were initially brought within

the ambit of labour regulations. Therefore, a major response of the

employers has been to decentralise the production system. In some

106

industries (e.g. beedi, employers broke up their large scale

establishments into smaller branches that would legally be outside

the purview of the Factory's _Act35 . But often their response was

to withdraw from management of direct production and subcontract

production to smaller units either directly or through

intermediaries. The former large scale employers thus increasingly

became pure traders, who nevertheless continued to control the

production through various subcontracting arrangements and their

control over the market.

A classic case has been the coir weaving industry. The large

producer exporters of the colonial period almost completely

withdrew from direct production. Of 18500 workers working for the

large producer exporters in 1949-50 only 2200 remained in 1979-

8036. It is estimated that only 15.25 percent of the output

exported by the large firms were produced in their own

establishments during the latter period.

In the coir yarn spinning the large fibre processing yards of

the husk merchants disappeared from northern Kerala and also the

large spinning units in southern districts. In the coir weaving

sector there were 653 coir units under the purview of the Factories

Act in 1949-50. But by 1980 their number drastically declined to 82

. t 37 un1. s . It was estimated that 3425 of the total of 3507 coir

weaving units in 1980 employed less than 20 workers. Similarly, of

the thousand odd ratt spinning units employing more than 20 workers

in 1955 only half remained in the early eighties. Thus, almost 95

percent of the workers in the coir industry were employed in small

household establishments by the early eighties38 . Consequently,

107

there has been a very rapid decline of the organised sector of

traditional industries during the post independence period {see

table 6). The withdrawal form direct production was also visible to

some extent in the handloom industry in northern Kerala especially

in the post sixties.

Table 6

Trends in Registered Factories and Employment in Traditional Industries.

1959 1964 1969 1974 1979 1984 1990

{1) { 2) {3) { 4) {5) {6) {7) (8)

Coir No.of units 158 147 144 260 296 303 86 Employment 12186 7159 4247 4313 4322 2186 Avg.emp. 77 49 29 17 14 25

Beedi No.of units 77 62 38 32 Employment 2249 2166 1076 99 Avg.emp. 29 35 28 31

Cotton No.of units 265 238 193 375 763 625 336 Employment 19669 16852 15192 18706 24976 19609 Avg.emp. 74 71 79 50 40 58

Cashew No.of units 170 199 264 265 263 243 304 Employment 65562 83850 97494 119999 104727 59505 Avg.emp. 386 421 369 453 431 196

Tea No.of units 120 125 121 117 113 104 102 Employment 5754 5789 5131 5080 5530 1435 Avg.emp. 48 46 42 43 53 14

Note: Avg. = average; Emp. = employment {Number of persons)

Source:For 1959, 1964 and 1969 see State Planning Board and Bureau of Economics, Statistics for Planning Series 3, Trivandrum 1972 For 1974 see Bureau of Economics and Statistics, Factbook on Manpower Kerala 1976, Government Press Trivandrum, 1977 For 1984 see Bureau of Economics and Statistics, Statistics for Planning 1988, Government Press, Trivandrum, 1988 For 1990 Bureau Of Economics and Statistics, Unpublished data.

108

In sharp contrast to these experiences, the cashew industry

continued to be predominant in the factory sector. Thus, it

accounted for 35 percent of the factory employment in the state

although only 2 percent of the total factories were in the cashew

industry in the period39 • The attempts made to decentralise

production in the cashew industry to the workers households in the

early seventies were thwarted by the workers. Cottage processing

was banned. The regulations introduced in the raw material market

in the mid seventies which ensured that raw material availability

was dependent on proportion of workers employed in the factories,

helped curb this phenomenon to some extent. Therefore, the cashew

employers favoured shift of production to Tamil Nadu. It is

estimated that the share of cashew employment in Kerala to total

employment in Indian cashew industry declined from 91 percent in

1961 to 72 percent in 1976 while share of Tamil Nadu and Karnataka

increased from 7 to 19 percent 40 • Cashew employment in Kanyakumari

increased 12 folds and output 6 folds during 1966-74. The increased

access to imported raw materials and the growth of cashew

cultivation in the neighbouring states also facilitated this shift.

The shift of production in the cashew industry was primarily

due to the wage costs differentials between the two states. In

1977-78 the wage costs for processing one kilogram of cashew kernel

in Kerala were Rs 5.19 in government owned units and Rs 4.36 in

private sector units as compared to Rs 1.60 in Tamil Nadu41 •

Despite the migration of cashew industry to Tamil Nadu the

apparent number of factories and workers in Kerala does not seem to

have declined. It points to the severity of unemployment in the

109

region 42 . Experience of beedi industry has also been similar to

that of cashew. Initially, during the sixties the workers fiercely

resisted sub contracting arrangements. Consequently, a major

segment of the organised sector in northern Malabar closed down

their operation and shifted to the neighbouring state of

Karnataka 43 . The low wage in the .north Kerala beedi industry had

been completely eroded by the mid sixties. The minimum wages in the

different states in the late seventies indicate the extent of

differentials. While minimum wages in Kerala were Rs 7. 03 for

rolling 1000 beedis it was only Rs 5.20 in Karnataka, Rs 4.75 in

Tamil Nadu and Rs 4.00 in Andhra Pradesh. 44 The available

information shows that none of the private sector units in the

different states paid the minimum wages in the industry. But even

then the wage cost of production was substantially higher in

Kerala. It is seen that emoluments paid to labour for production of

1000 beedis in the organised and unorganised sectors in 1979 was

only Rs 6. 50 and Rs 5. 00 in Kerala, Rs 4. 50 and Rs 3. 20 in

Karnataka and Rs 4.50 and 2.50 in Tamil Nadu. 45 The lower wages in

the neighbouring states were the prime reason for the shift in the

industry.

In the case of handloom the shift of production was restricted

to popular locally consumed items. The produc~ion of these

varieties of cloth needed no exemplary skills and many handloorn

entrepreneurs from Cannanore shifted whole or part of their

production to Tamil Nadu

costs 46 • But the shift of

to take advantage of the

export oriented handloom

low labour

i terns from

northern Kerala, which formed the core of the industry, was

restricted as the weaving skills for specialised export items like

110

furnishings and other items of superior quality were exclusively

limited to the region.

Apart from inter state migration there have also been

significant locational shifts within Kerala in certain industries

like tile. The post independence period show ~he growth of many

smaller tile mills in Trichur belt where unions were weak and wages

lower47 .

The phenomenon of industrial migration to low wage areas were

strong in industries where mechanisation was not technologically

feasible as in cashew and beedi or legally not possible as with

handloom. In contrast, the coir industry, where technological

alternatives were available, witness8d a protracted struggle

between the employers and trade unions over the issue of

mechanisation.

In the coir weaving industry the complete erosion of the cheap

labour supply following the spread of trade union activity to the

petty producers and the household sector was the primary factor

that motivated these attempts. The exporters found it difficult to

retain profit margins and some of them set up mechanised weaving

units both inside and outside the state. The move met with fierce

resistance from the workers, who feared massive displacement of

labour. The resistance of labour was an effective barrier to these

attempts and the mechanisation of the weaving sector w~s confined

to around 60 looms in 4 units 48 . This experience was also

replicated in the yarn spinning sector. Attempts to mechanise fibre

production grew in momentum following trade union struggles to

111

illlplement minimum wages in the later seventies. The number of

mechanical defibreing units increased from 6 in 1955 to 400 1.n

197349 . But the fierce resistance to this forced the government to

ban the use of defibreing machine in the three southern districts

where the industry was concentrated. But there are around 200

defibreing units in the other districts 50 •

Wood and tile industries also offered scope for mechanisation.

The introduction of machinery in these industries was accompanied

by limited diversification of their product structure viz. products

J.ike plywood I pipe making 1 pottery and bricks 51• The scattered

nature of the wood industry and the gradual introduction of

machinery in individual units prevented any large scale industry

wide resistance to such efforts. In the tile industry the

mechanisation was generally limited to introduction of a few new

mechanical contraptions to increase the pace of handling of raw

materials and speed up production. The noticeable improvement in

efficiency of production has also been documented. 52

Problems Related to Raw Material Markets

The traditional industries that expanded drawing upon the

locally available raw materials are today faced with supply

bottleneck's. Availability of materials like clay and wood

decreased sharply. In the case of clay though deposits of 82

million tons have been identified53 along the coastal tracts in

Trivandrum, Quilon, Cannanore and Kasargod most of the existing

mines have been overworked. The non-availability of ext.ensi ve

vacant plots in coastal areas made development of new clay mines

112

near user industry locations very difficult. The increasing

urbanisation restricted availability of clay bearing land on long

term lease from the government. Further, the pollution and

environmental degradation caused by clay based industries met

increasing resistance from local communities. Thus, the existing

clay based industries are faced with severe problems in increasing

raw material supply.

Besides this, the tile industry finds it difficult to get

cheap wood fuel to feed its heating requirements. The fast

depletion of the forests in the recent dP.cades has increased fuel

costs 54 . The possibilities of importing cheap coal are limited. The

depleting wood supplies are being increasingly diverted to other

modern wood based industries like paper and rayon where the value

added is higher. Though some large wood based industries even

resort to imports to meet their needs, the traditional wood

industries are unable to procure the needed raw materials in

adequate quantity.

The bottlenecks in availability of raw materials also confront

other major traditional industries like handlooms, cashew and coir.

Though production capacity of handloom yarn is almost adequate to

meet the needs of the handloom industry in the state the spinning

mills flout the regulations of the central government and restrict

yarn supplies to the handloom sector. According to stipulations of

the central government 50 percent of the yarn manufactured in the

spinning sector should be in hank form to meet the requirements of

the handloom industry. The production of hank yarn . in the 30

spinning mills in the state (including 14 cooperative and

113

government owned mills) in the late eighties amounts to only 5.5

million kilograms or 26 percent of total output of 21 million

kilograms while the requirements of the cooperative sector and the

handloom industry were 3. 75 million kilograms and 7. 55 million

k . . 1 55 1lograms respect1ve Y .

But the deficit in yarn is much higher than the 25 percent

deficit implied in these statistics as only 1.37 million kilograms

of the hank yarn produced is sold within the state. This increases

deficiency in yarn availability to the handloom sector to 80

percent56 • More than 75 percent of the hank yarn produced is sold

outside the state. Many reasons are attributed to the flow of hank

yarn outside the state the main one being the difference ~n sales

tax that make Tamil Nadu yarn cheaper for the Kerala handloom

industry. But it is ~lso seen that there i~ a mismatch between the

kind of yarn produced and the requirements of the handloom industry

in the state. Production of hank yarn of low counts (upto the 40s)

accounts for only two-thirds of the state output while it accounts

for three forth of the yarn consumed in the state. Si:;ilarly,

production of combed yarn used in the state is virtually nil. High

prices and poor quality of local yarn are also pointed to be

factors that divert local producers to yarn produced outside the

state. On the whole, the problems caused by the shortage of yarn

have been increasing over the years further adding to the ~oes of

the handloom industry57 •

In cashew industry though cashew cultivation increased

substantially from 37460 hectares in 1955-56 to 142203 hectares in

1980-81 the area under cultivation declined to 1.1 lakh hectares by

114

1992-93 58 . The production of cashew nuts was inadequate to meet the

full employment needs in the industry. Initially, the deficiency in

raw nuts was met by imports. Between 1946-47 and 1972-73 the import

of cashew nuts increased form 32000 tons to 198000 tons. But since

then there has been a steady fall in imports to 24000 tons in 1979-

8059. Though imports increased iubstantially to more than one lakh

tonnes in the early nineties the share of Kerala ranged only

between 10000 and 30000 tons in the latter half of the eighties.

Prices of imported nuts also increased significantly from Rs 1735

per ton to Rs 12682 per ton during the period60 . Further, Kerala's

share of imported nuts was also reduced due to policy changes in

the early eighties. In the domestic market the share of Kerala in

the total Indian cashew output has decreased from 61 percent in

1966-67 to 52 percent in 1974-75 and further to 43 percent by 1992-

9361. Though the government enforced monopoly procurement of cashew

from 1977 to ensure supply of nuts to the industry the availability

of nuts did not increase substantially as large amounts continue to

be smuggled outside the state. The total availability of nuts ln

fact dec 1 in e d from 1 . 1 9 1 a k h ton s i_ n 1 g 7 n to 0 . 61 1 a k h tons l n

1983 62 . Due to the lower labour costs prevalent in states like

Tamil Nadu and Karnataka they can pay a higher price for cashew

nuts. In 1980 the price per quintal of cashew nut was Rs 763 ln

Karnataka and 764 in Tamil Nadu as compared to only Rs 600 ln

Kerala63 • This disparity in prices, which increased substantially

in the eighties, have encouraged the smuggling out of cashew nuts

on a large scale. Unofficial estimates show that a major segment of

the cashew nuts produced are smuggled outside Kerala 64 . The

inadequate availability of raw materials resulted in a drastic

reduction in employment. It is seen that the workers of the Kerala

115

State Cashew Development Corporation, the largest cashew employer

in the state, received only 12 days of employment in 199365 .

The raw material availability in the coir industry also

declined significantly. This was due to varied reasons. There was

the absolute d·eclin·e in coco.nut proP,uction from the mid seventies

primarily due to decrease in area of coconut cultivation and

yield66 . The decrease in output was further accentuated by the

growing spatial mismatch between coconut and coir production. It is

seen that the decline in production was most acute in the southern

districts, where the coir industry was localised, while coconut

output increased in the northern districts. Further, the fibre

content of the coconuts in the southern districts also decreased

~~~~Q~ v~ LUU~ WlL~ 01sease. It is estimated that the

four southern districts that account for 70 percent of the spinning

capacity account, for only 40 percent of the available husks. The

figure show that only less than 30 percent of the husks are used in

the northern districts while the utilisation of husks in the state

as a whole is around 50-60 ~ercent of the total production. The

regulations in the husk market introduced to ensure husk supply to

the cooperative sector through a levy system further intensified

the problem. The flow of fibre from the husk surplus northern

districts has been severely curtailed by the regulations. Thus, the

coir industry in southern Kerala faces increasing shortage of husks

and higher prices. To some extent, the deficiency is met by imports

from Tamil Nadu.

One traditional industry that faced no substantial problems in

securing raw material supplies is the beedi industry. Though raw

116

materials are imported from states like Orissa, Andhra Pradesh,

Gujarat and Karnataka the movement of raw materials has usually

been very smooth and regular_. However, there have been sharp

increases in raw material prices and especially of tendu leaves. On

the whole, however, the raw material availability is significantly

better than of most other industries.

Problems in the Product Markets

As with raw materials the traditional industries also face

increasing competition in the product markets. Many products are

losing to competition from other countries. The higher wages in

Kerala have also eroded the competitive strength in local markets.

The export of tiles outside the state has become very

insignificant. The changing construction styles in favour of

concrete buildings have also effected domestic demand67 . In coir

products the share of India in the international coir market has

declined from around 50 percent in the mid sixties to around 25

percent in the eighties 68 . Exports have steadily dwindled from

70694 tonnes in 1950-51 to 24672 tonnes in 1985-86. The steady

decline in coir yarn was because of the stoppage of coir matting

production in Western Europe. The increasing share of brown fibre

in international trade also greatly affected coir exports from the

state as Kerala coir production is largely restricted to production

of white fibre. Over the years Sri Lanka has substantially

increased its share in total world production to 38 percent. The

lower costs of Sri Lankan machine spun coir yarn products enabled

them to compete in the international markets and improve their

market share.

117

Though the domestic market accounts for around 85 percent of

the industry output, the Kerala coir industry is facing increasing

competition from Tamil Nadu that has been increasing its share of

the internal market. As with exports the flow of Kerala coir

products to other states also declined from 48769 tons (80%) in

1965 to 22507 tons (49%) in 198669 . The lower wages account for the

increasing competitive strength of the coir industry in the other

states. The estimates in the late seventies show that wage per 100

kilograms of fibre ranged between Rs 216 to Rs 360 in Chiryankil in

southern Kerala while it was only Rs 55 in Salem and Dharmapuri

districts of Tamil Nadu70 . The prospects of the industry picking

up further in Tamil Nadu and Karna taka, with their increasing

coconut production and cheap labour, is substantial since

production of brown fibre is significantly concentrated in these

states. The share of brown fibre in total output increased from 12

percent in 1976-77 to 34 percent in 1987-8871 . It is seen that the

share of total coir traffic originating in Kerala has declined from

82 percent in 1965 to 49 percent in 1986.

The handloom, cashew and beedi industries in Kerala also face

increasing competition in the product markets. Though exact figurP.s

are not available for the beedi industry it is seen that

low-priced beedis from neighbouring states are making substantial

gains in the Kerala market. Though this is largely limited to the

southern districts and the eastern highlands the trends suggest

that the Kerala industry will face increasing competition in the

future. Moreover, it is to be noted that the Kerala beedi industry

that expanded in response to external demand has almost completely

lost the outside state markets. Exports were only Rs 3.87 crores in

118

1975-76 and Rs 4.77 crores in 1980-8172 . I~ fact of late the state

has become a net importer of beedis. Estimates show that import of

beedis into Kerala has increased from Rs 4.53 crores in 1975-76 to

Rs 5.75 crores in 1980-81 raising net imports from Rs 66 lakhs to

Rs 98 lakhs.

The most serious threat faced by the Kerala handloom industry

is the shrinking share of the handloom market. The local

consumption demand for handloom products is increasingly met by

cheaper Tamil Nadu handlooms that have developed extensive retail

f~cilities in the state73 . However, the export import data do not

give the break up for h;:mdloom products. The crisis to Kerala

hand looms is more severe in thP. so11 t:hern districts, where the

industry is more fettered by its failure to r;::.spond to market

tastes. In sharp contrast, many handloom units 1n northern Kerala

continue to produce for the export market74 . But the sharp

fluctuations in export demand limit the stability and growth of the

industry in the region. Similarly, the handloom industry in the

region, like the beedi industry, grew in response to demand from

distant markets, are losing to the cheaper handloom imports from

other states who have made significant inroads in the local market.

Cheap handloom cloth from Tamil Nadu was not only able to compete

and capture a large segment of the Kern1a market but also produce

cheaper cloth for the traditional outside the state markets of

Cannanore handloom products.

The cashew industry that mainly relies on the export market is

facing increasing competition in the world market. Many countries

in Africa and Latin America have made substantial inroads into the

119

international market. India's share of total international trade in

cashew kernel declined from 98 percent in 1947 to 54 percent in

197975 . The other cashew producing countries, who shifted from

exports of raw nuts to cashew kernels, have been the gainers in the

international market. The share of Mozambique increased from 2

percent in 1947 to 30 percent by 1974 while Brazil and Tanzania

increased the share in world trade to 17 and 6 percent respectively

by 197876. Their access to increased raw material supply and lower

prices is slowly eroding the competitiveness of Kerala cashew

industry. In the late seventies the per ton export price of cashew

kern€1 was only Rs 2557 in Mozambique and Rs 2976 in Brazil as

compared to Rs 3594 in India.

Thus, the efforts to ra1se wages and improve the standard nf

living of the traditional industry workers tended to decrease

employment either through industry migration or due to labour

displacing mechanisation. In decentralisation of production eros1on

of bargaining power of the workers and increased claim of

intermediaries on the surplus produced by the petty producers. It

was this situation that strengthened the demand for cooperative

reorganisation of these traditional industries.

Conclusion

In this chapter we attempted to discuss the characteristic

features of traditional industries in Kerala and analyse the

historical role that they have played in the regional economy of

Kerala. They have been the residual employment sectors absorbing

the surplus population. We discussed the features of traditional

industries with reference to the technology and the organisation of

120

production that allowed them to play the accommodating role to

surplus labour. Basically, there are two sets of factors that have

tended to undermine the viability of the sector and create

disequilibrium. First is the emergence of the trade union movement

that pushed up the real wages and improved the working conditions

and thereby eroding the competitive stre-ngth of the handicraft

technology. The second set of factors is related to the

developments in the product and raw material markets that are also

threatening the viability of the handicraft industries. In this

situation cooperative reorganisation of these industries has had an

added significance. It has tended to become a slogan from below.

Though the origins of the cooperatives in the traditional

industries date to the colonial period, the development of the

cooperatives was largely the result of government interventions to

revive and stabilise the traditional industries. Cooperative

reorganisation was the most favoured form of. government

intervention 1n most of these industries though the periods of

cooperative expansion differed depending upon the severity of

crisis. Cashew industry is an exception where public sector

ownership rather than cooperative reoraanisation became the

favoured form of government intervention. It was hoped that the

cooperative structures would improve the aeneral working of these

industries and provide better living conditions by (a) removing

middle men, (b) ensuring payment of minimum wages, (c) implementing

regulations in product and raw material markets, and (d) regulating

the technological change and maximising employment. These were the

reasons behind the consensus on industrial cooperatives in the

traditional industries.

121 7}1-bl;/3

Notes and References

1. Table 1 Population pressure on land : 1911 -1961

I state Area Total population Population density*IPopulation

IAndhra Pradesh Assn .

!Bihar Gujarat

IJaatu and lashtir Kerala Madhya Pradesh Madras Kaharashtra I My sore Orissa I Punjab Rajasthan Uttar Pradesh llest Bengal India

sq.k1. 1911 1961

275281 21447412 359834471 121965 4482864 12241972 174038 28316916 464556101 187115 9803587 20633350 138992 2292535 35609761 388551 7147673 16903715\

4434521 19440965 323724081 130357 20902616 33686953 3074771 21474523 395537181 192204 13525251 235.86772 155825 11378875 175488461 122005 11945019 203068121 342274 10983509 201556021 294364 48152273 737464011 876171 17998769 349202791

31923331251273444 437844504

1911

78 37

163 52 16

184 44

160 70 70 73 98 32

164 m

79

Wote: * = Population density in persons per square kilometer

1961

131 100 267 110

26

m( 73

m( 129 123 113 166

59\ ml ml 137

growth (%)

0.01 0.03 0.01 0.02 0.01 0.03 0.01 o.o1 I 0.02 1

0.01 o.o1 I o.o1 I o.o~ 1

0.01 o. o2 I

Source: Government of India, Census of India 1961, Paper No 1 of 1967, Subsidiary Tables B-1. 6 and B-11. 3, Workers from 1901/11 to 1961 by States and Union Territories and by Cities, New Delhi, 1968 and Central Statistical Organisation, Government of India, Statistical Abstract of India 1961, Government of India Press, New Delhi, 1961

2. Panikkar P G K, Krishnan TN and Krishnaji N (1974), p.28.

3. Varghese T C (1970), p.71.

4. Thomas Isaac T M and Michael Tharakan P K (1986), p.13.

5. Thomas Isaac T M (1984), p.20.

6. Oommen M A (1979), pp.67-68.

7. Kallayi was the second largest timber yard in the world in the early decades of the century. See Sreedhara Menon A (1962), p.339.

8. Jaiprakash Raghaviah (1986), p.55.

9. Ibid., p.55.

10. For a broad discussion of these aspects refer Gay L Gullickson (1983), pp.831-850; Gay L Gullickson (1986); Frank Perlin (1983), pp.30-95; Clarkson L A (1985); Mendels F F (1972), pp.241-262.

122

11. Table 2 Land holding of rural households 1961

lstate\Rectare Above sl

IAndhra Pradesh I 7 I ol 6 51 23 Assn 28 42 8 50 14 Bihar 9 42 9 49 16 Gujarat 15 34 3 63 40 Ja11u and [asbtir 11 23 I 8 69 17 Kerala 31 59 14 27 5 Madhya Pradesh 9 26 I 3 71 44 Madras 24 55 1 7 38 11 I Maharashtra 16 38 I 2 60 38 llysore 19 32 4 64 41 Orissa 8 38 I 7 55 20 Punjab 12 49 I 4 47 29 Rajasthan I 1;

16 I 2 82 55 I Uttar Pradesh 29 I 8 63 21 I

Illest Bengal I 11 ol 8 49 14 I 12 I I

India 38 I 6 56

Source: Cabinet Secretariat, Government of India, NSS Ho 144. Tables with Notes on Some lsEects of Land Roldir." in Rural ~reas: State ond All India Estimates /Seventeenth Round\. Sentember 1961-Julv 1962, New Delhi

12. Government of India (1932), p.3. quoted ln Jay~sankar

Krishnamurthy (1970) 1 pp.205-206.

13. Thomas Isaac T M (1990) 1 pp.11-23.

14. Emam Beevi (1978) 1 p.16-17.

15. Thomas Isaac T M (1984) 1 p.56.

16. Ibid. I p.56-57.

17. Thomas Isaac T M (1990) 1 pp.11-23.

18. Ibid. I pp.23-33.

19. Ibid. I p.26.

20. Rajagopalan V (1986) 1 pp.23 & 23.

21. Pyaralal Raghavan (1986) 1 p.22.

22. Thomas Isaac T M (1990) 1 p.49.

23. Thomas Isaac et al (1992) 1 p.35.

24. For descriptive details see the early minimum wages committee reports in coir 1 cashew I beedi 1 hand loom I tile and wood industries.

25. Mathew Tharakan K (1959) 1 p.18.

26. Thomas Isaac T M (1990), pp.19 & 33.

123

27. Thomas Isaac T M (1992}, p.38.

28. For Details of development in coir industry see Thomas Isaac T M (1984) and for details on beedi industry see Pyaralal Raghavan (1986}.

29. See Table 7 for more details.

30. Department of Economics and Statistics, Government of Kerala (1982) I p.15.

31. Department of Industries and Commerce, Government of Kerala, (year not given) pp.89-90.

32. Ministry of Textile, Government of India (1990}, p.25.

33. Pyaralal Raghavan (1986), p.57.

34. Ibid., p.65.

35. Ibid., pp.32-34.

36. Kerala Sastra Sahitya Parishad (1987}, p.80.

37. Ibid., p.80.

38. Kerala Sastra Sahithya Parishad (1986}, p.57.

39. The total workers in 232 cashew units registered under the Factory's Act was 291788 in 1985 whereas total number of units and factories stood at 11097 and 291788 respectively, Department of Economics and Statistics, Government of Kerala, (1989) I pp.101-104.

40. Oommen M A (1979), p.95.

41. Ibid., p.98.

42. The number of working days per annum declined steadily in Kerala from 262 in 1963 to 80 by 1977. For further details see Emam Beevi (1978), p.57.

43. Pyaralal Raghavan (1986}, pp.82-84.

44. Oomen M A (1979}, p.129.

45. Ibid., p.129.

46. Rajagopalan V (1986), p.74.

47. Pillai V R (1958), p.S & p.39.

48. Kerala Sastra Sahithya Parishad (1986), p.68.

49. Ibid. I p.68.

50. Ibid., p.68.

124

51. Pillai V R (1958), p.9.

52. Ibid., pp.11-17.

53. A F A Research Bureau (1992), p.126.

54. Kerala Sastra Sahithya Parishad (1988), pp.137-138.

55. Mridul Eapen (1991), p.15.

56. Ibid., p.15.

57. For reason for yarn shortages in the nineties see Srinivasulu K (1994) I pp.2331-2333.

58. Kerala Sastra Sahithya Parishad (1986), p.59 and information provided by the Industries Secretary, Government of Kerala in the Hindu dated 6.12.94

59. See Kannan K P (1981), p.50 and State Planning Board, Government of Kerala (1994), pp.110 and 252

60. Kerala Sastra Sahithya Parishad (1986), p.59.

61. Kannan K P (1981), p.70 and State Planning Board (1994), p.110.

62. Kerala Sastra Sahithya Parishad (1986), p.60.

63. Kannan K P (1981), p.86.

64. Estimates place the share of cashew nuts that are smuggled out to be as high as 50 percent. For details see Kerala Sastra Sahithya Parishad (1988}, p.171. Also in 1992 the government could only procure 8306 metric tons of cashew against a target of 14000 tons, Economic Review(1992}.

65. Deyanandan M N (1994}.

66. Thomas Isaac et al (1992}, pp.120-134.

67. Arun A V (1994).

68. Thomas Isaac et al (1992}, pp.47-60.

69. Ibid., p.105.

70. Oomen M A (1979), p.l54.

71. Thomas Isaac et al (1992), p.97.

72. Thomas Isaac T M and Ram Manohar Reddy (1992), pp.51 and 60.

73. Mridul Eapen (1991), p.37.

74. Rajagopalan V (1986), p.64.

125

75. Kannan K P (1981), p.21.

76. Ibid., p.21.

126