Notes - A Shirt in the Market
Category : 7th Class
A Shirt in the Market
You have understood that there are different types of markets where you can buy different types of goods. You have read about the supply chain briefly in the previous chapter. In this chapter, you will get to know in detail about how goods pass through various stages till they reach you, the consumer, and how different people play different roles in this chain.
In a supply chain, there is a network of people and activities involved in trading to move a product or service from the supplier to the customer. The people involved in the supply chain earn money at their level. As the product or service moves in the chain of supply towards the consumer the rates of the product or service increase. Hence, the more the people involved in the supply chain, the higher is the price of the service or product.
STORY OF A SHIRT
Cotton is produced at a farm and undergoes various stages of spinning, weaving, dyeing, tailoring, etc., before it becomes a shirt. The wholesalers and retailers who earn the major chunk of profit are merely agents in the chain of sale.
A Cotton farmer
Shivram is a cotton farmer in Salem, Tamil Nadu. He grows cotton in his small field. When the harvest is ready and he collects enough kapas1 in his godown; he loads them in a lorry or a bullock cart and takes them to the wholesale market or mandi. Shivram sells his cotton to Ratan, a wholesaler at the mandi in pothis2. He earns Rs. 0,000 for his entire produce of cotton. Shivram will use this money to buy new seeds, farming equipment and fulfil his daily needs over the next few months. Ratan, on the other hand, sells the same cotton in quintals and earns much more than Shivram.
Q. Do you think the money Shivram gets is sufficient to lead a good life?
A wholesale market of cotton
Textile mill owners approach the wholesale dealer at the mandi to buy cotton. Ratan sells Shivram's produce at Rs. 5,000 for each quintal to Shambhu and earns a profit.
A wholesale market of cotton
Shambhu owns a cotton gin in Tirupur. He has employed many spinners who spin cotton into yarn. After the cotton yarn is spun, Shambu sells it at a high price to traders at the Tirupur cloth market.
Raghu is a trader at the Tirupur cloth market. Raghu buys the yarn from Shambu and gives it to his weavers to weave cloth. He pays each of his weavers a salary of 2,000 per month. Sita is a weaver employed by Raghu. She works
10-12 hours in a day. She has bought a loom worth Rs. 15,000 on loan. She pays a loan of Rs. 500 from her salary every month. It will take her more than 3 years to pay off her loan. However, she is grateful to Raghu for giving her work so she does not bargain for a better salary.
Sita's father was a weaver himself. He used to buy yarn and dye it and weave it in designs of his choice. Then he used to sell it to the local customers. However, he was not able to keep up to the changing fashion and tastes of the customers and slowly his investments in the yarn, dye, etc., went waste, and more and more
Find out the farmer's price, the wholesaler's price and the retailer's price on: a cereal, a fruit and a vegetable.
Ready stock began to pile up. Finally, Sita's father faced heavy losses and fell into debt. Thus, selling his products directly to the consumers did not benefit him. He had to sell his loom to pay off the debts. However, he had taught his wife Main and his daughter Sita, the trade of weaving so the family manages to earn a living.
Putting out system is generally used by merchants for getting their work done. Putting out system is where people work in homes using their own tools such as looms and spinning wheels using the raw materials provided to them by merchants. Hence, they earn from their skills and do not have to make any investment.
Raghu sells the cotton cloth woven by Sita and other weavers to knitwear manufacturers in Tirupur. An exporter also buys cotton fabric from him. Tirupur, in the Coimbatore district of Tamil Nadu is known for production of T-shirts. It is one of the oldest centres of cotton hosiery, popularly known as banian.
Raghu, therefore has many avenues to earn money by selling the cotton cloth to a large number of manufacturers and exporters. Many manufacturers produce cotton knitwear for the local market. The exporters make knitwear and sell it overseas. Their tailors work hard to meet the market demand and export orders. The salaries of the tailors range from Rs. 2,500 to Rs. 3,000 a month.
A retail chain of stores buys knitwear garments from the exporter. The same shirt that the manufacturer sells in India for Rs. 300 in a shop, is sold in a shopping mall in India for Rs. 1000 and abroad at the chain store for Rs. 3000. The customer in the US or UK are used to buying products that have been manufactured in countries like Vietnam, China, Indonesia and India. The foreign customer pays the price quoted on its price tag. Thus, the chain stores make the most profit.
India has seen a huge growth in Cooperative societies serving mainly the farming sector. For example, most of the sugar production takes place at mills owned by local cooperative societies in Maharashtra.
Cooperatives also play a great part in dairy marketing. Amul is a dairy cooperative. Cooperative banks in India serve both the rural and urban societies.
Q. After reading the whole process, try and answer the following questions.
1. The cotton grower who works the hardest earns just enough to sustain himself. The weavers are also exploited as temporary workers and given daily wages or a meagre monthly salary. Do you think this is fair? Have a discussion in class.
2. What should be done to better the plight of the growers and weavers?
3. Who are the producer, the intermediaries and the consumer?
MARKET AND EQUALITY
There is evident inequality in the market chain of supply. The people involved in the various activities at their level have limited or insufficient information related to the movement of the product or service in the chain and the interest of the intermediaries in the chain. The levels encountered in the supply chain also seek to maximize the revenue of each person within their sphere of interest. This leads to exploitation and lesser revenue for those that are in the beginning of the supply chain and are lesser educated that the others. Example, farmer and wholesale dealer.
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