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