Shirt in the Market

How do local traders take advantage of farmer’s poor financial condition?

After a small farmer finished cotton balls are collected, sold to LTs for meagre prices. Farmers have to go back to same traders cuz borrowed money for seeds, fertilisers, etc. for cultivation and bcz loan, promise to sell all their cotton to them.

One of the biggest cloth markets in the world -

Bi-weekly market Erode in Tamil Nadu

What is the putting-out system?

The arrangement of merchant and the weaver, merchant gives the raw material (yarn), takes back the finished product from weaver

The advantages of putting-out system:

1. Weavers don’t spend money on purchasing yarn.
2. Don’t have problem of selling the finished cloth

The disadvantages of putting-out system:

1. Weavers lose freedom.
2. Weavers depend on the merchants for raw materials and markets.
3. Weavers at loss - get a very small amount cuz don’t know price of cloth

Explain the weaver’s cooperative.

1. eliminates role of merchant
2. functions as a merchant but without profits
3. The government buy cloth from them at reasonable price for support
4. Ex: The Tamil Nadu government’s “free uniform” programme - buys cloth from the power loom weaver’s co-operatives.

How does a chain of markets link the producers of cotton to the buyers at the supermarket?

The shirts sold at Rs 200 (cost price 100 & profit 100) by the garment export centre sells at Rs 900 in the US. (600 cost price & 300 profit)

What are the three main demands made by foreign buyers on garment exporters?

1. High standards of production quality
2. Timely delivery of goods
3. Lowest possible price

How is there a gross inequality in earnings in the market?

The foreign businessperson makes the most profit

then garment exporter

merchants and traders

factory workers, weavers and farmers receive the lowest amt of profit

forming cooperatives of producers ensure laws are fllowed strictly