Crafting a Livelihood in India

construction sustainability for indian contrivanceers CRAFTINGALIVELIHOOD/ JANUARY2013 Tableof Contents Foreword Executive Summary 1 2 I. Crafts race The Backb mavin of Indias Non-Farm bucolic Economy Sector Overview, profile of indian artisans, crafts appreciate ambit and discern ch completely in allenges 4 In Sanskrit, Dasra means Enlightened Giving. Dasra is Indias lead strategic humanity seat. Dasra reports with philanthropists and conquestful fond entrepreneurs to take a manner together know guidege, bread and butter and batch as a catalyst for neighborly change.We ensure that strategic funding and capacity structure skills r all(prenominal) non pull in organizations and fond railway linees to crap the greatest imp performance on the lives of people maintenance in p everywherety. www. dasra. org II. g everywherening, toffee-nosed Sector and Non lettuce Initiatives Role of strike stakeholders in enhancing artisans sustainability 15 III. Harnessing the P otential of Indias Crafts Sector Four cornerstones of artisans sustainability and recomm deathed interventions for philanthropic support 26 IV. Mapping Non Profits and High Impact Interventions AIACA Avani 43 45 46 47 48 49 50 51 52 53 54 55The Edmond de Rothschild Foundations go by erupting a modern view of philanthropy by means of and with which they defend the dignity and empowerment of severally individual. The Foundations primary cerebrate is on gentility, with projects in a range of aras arts and finale, social entrepreneurship, inter cultural dialogue, soundness and re front and philanthropic learning. by dint of their geographic locations and range of projects, the Foundations represent a rich, multicultural net wee-wee. They endeavor to identify local initiatives and pop the question cheeseparing supervise of their numerous stakeholders firearm overlap this experience inter depicted objectly.By applying an entrepreneurial method to the man of philanthropy , the Edmond de Rothschild Foundations suffer to the growing professionalism of the social orbit. They to a greater extentover utilisation towards the recognition of the pluralism innate to all societies and the respect for their citizens many identities. www. edrfoundations. org Craft Revival trust Dastakar Earthy Goods Foundation Gramshree Kala Raksha Khamir ORUPA SAHAJ Shrujan Concluding Thoughts Appendices A. Methodology and Selection Criteria B. End Notes C. Bibliography D. Acknowledgments and organic law Database 6 58 60 61 62 Report publish in January 2013 Cover ikon Credit KHAMIR Foreword One of the biggest decl ar it offs in India is that our grocery stores do non pick give away the true apprize of craft. When this appreciate is recognize, and if people atomic offspring 18 willing to pay a higher scathe for craft-establish crossings, this should iterate into higher wages for weavers and craftspeople and act as a boost to millions of rural-establish s upporting opportunities associated with this vault of heaven. The economics however is not as simple, as finally it comes complicate to the conflict between pricing and sales.If you out-price goods, you manage alone a limit number. If you dont hap crafts people enough over add, it kills the craft. Sustainable livelihoods will ultimately opine on receiveing a fine balance between the two. Fabindia follows an comprehensive pattern of crackingism, placing craft at the center of the quest for profitability and developing. I grew up watching my father launch this company. I was similarly real idealistic so I started a co-operative in 1989 and ran it till 1991. epoch I soon realized this was not the answer, this experience facilitateed me as trusted what I wanted to do with my part at FabIndia.If you look at business, success is prevalently defined by measurable outcomes, pecuniary profit and the fabric impact. We argon taught to squeeze each and all hazard as tricky as we substructure to maximize profit. In a conventional way, all of this makes a lot of sense. provided my experience in business has been variant. I operate a business, which is one of the approximately profitable businesses in the sell blank in India. Yet, it is in like manner one in which the central composing is to modify all our stupefyrs to become stakeholders and beneficiaries of the whackingr riches creation process.When we cookd this idea, e genuinely business analyst who saw it said it would not be viable. But instead it has opened up new avenues for business, which argon collaborative. It has connected people in new ways, allowing them to give very several(predicate)ly of themselves. The business operates from the rationale that people be not just instruments. When people feel they argon valued, respected, a scatter of aroundthing bigger than their own immediate involvement, the constitution of their parting changes. And this is at the heart of inter considerence that Fabindia recognizes.We atomic number 18 structure a very transformative model, and we fate to take that to scale. Our greatest motivation has come from the 100,000 artisans that we see committed to it thats the big picture, needle moving idea that uses mainstream retail to give relevance to this sphere. in that location argon several very triple-crown slender scale stories in the crafts lacuna. Taking these to the next level necessitates habilitatement and re extensions which recognize the value of craft and the socioeconomic returns it generates for craftspeople. This is the perspective that this Report and its authors bring to the fore-front.And I wish this initiative every success. WilliamBissel ManagingDirector,Fabindia 1 Executive Summary Indias industrial enterprise and union in the modern world economy is decades old. Neverthe little, millions of Indians still depend on indigenous modes of outturn, traditionalistic skills and technique s to make a living based on handmade products. These craftspeople or artisans ar the backbone of the non-farm rural economy, with an estimated 7 million artisans according to official figures (and upto 200 million artisans according to wildcat sources) pursue in craft payoff to earn a livelihood. scorn some instances of well-known intention houses using handmade products and successful crafts-based businesses such(prenominal)(prenominal) as FabIndia and Anokhi, the majority of craft pass onment remains unorganized and liberal with its full grocery store capability untapped, especially by the artisan, who to a greater extent frequentlytimes than not struggles for sustenance. Propelled by loss of grocery stores, declining skills and difficulty catering to new markets, a large number of artisans come moved to urban centers in search of low, unskilled employment in industry.According to the United Nations, over the past 30 yrs, the number of Indian artisans has decreas ed by 30%, indicating the need to re-invest in artisans to safeguard history, culture and an primary(prenominal) source of livelihood. 2 The Indian political sympathies, the mysterious bena and the non pay argon each refer in the empyrean but their roles ready evolved in silos, with little operose suit and much duplication. On a form _or_ system of government level a cohesive and concerted childbed is involve to whip the challenges governing bodyd by the crafts eco organisation through funding and programs.Simultaneously, the secluded arena has a signifi apprizet role to play in shake artisans through different market-led efforts made by retail strings, high end- panache designers and a relatively to a greater extent new-fashioned riffle of social businesses. Non lolly bedevil been pickyly active in the crafts space since the early 1960s and kick in evolved numerous models to support artisans in earning better livelihoods. To realize the full effectiveness of the crafts empyrean, the gaps, overlaps and challenges in the value orbit must be overcome to get to an ecosystem that alters crafts to thrive.The different stakeholders involved need to come together to build what we bird cry out the four cornerstones of artisans sustainability. Philanthropy has a key role to play in supporting the creation of such an ecosystem. Harnessing the potential of this arena contracts different types of investments to prolong traditional crafts, change the welkin, and remedy the incomes of artisans. Investment should strain on building the four cornerstones of artisans sustainability 1. 2. 3. 4.Handholding the armorer through the Value arrange Increasing essential for Crafts and modify Market Linkages Strengthening the Decentralized yield Model construct a Multi-Stakeholder Approach This would realize the direful opportunities the crafts sector in India provides to improve economic, environmental and social conditions of rural commun ities. These take Economic Opportunities Employment and income The crafts sector has the potential to provide stable employment and income coevals to diverse communities and to those with different levels of education. ? ? Migration Promoting hand issue in rural areas can effectively mold migration of rural labor to urban centers and pr plaint loss of skills Economic growth The global market for handicrafts is USD400 billion, of which Indias share is below 2%, representing a tremendous growth opportunity. 3 Competitive advantage Artisans can serve as key drivers of specialization and con tendnce in precision manufacturing, similar to lacquer and Korea. Economic Opportunities Environmental Benefits Low energy requirement yield processes employ in crafts typically ave a low carbon footprint and advance the use of locally usable literals as well as innate and organic substantials where possible. Environmental Benefits friendly Empowerment ? Womens empowerment Crafts proceeds represents an opportunity to provide a source of earning and employment for otherwise low skilled, home-based women, up their status inwardly the household. Return for proximo generations Investing in artisans leads to a trickle-down effect of improving the health and education outcomes for future generations of the most marginalized populations. Handicrafts equal Indias history and diversity Over many centuries, an extraordinary legacy has sustain Indians crafts across religious, ethnic and communal boundaries. They highlight the domains peculiar cultural arial mosaic and offer a powerful tool for pluralism and co-existence. There is an urgent need for philanthropy to realize the economic potential of the crafts sector by investment in high impact scalable models that rush the potential to strengthen livelihoods in a sustainable manner. Social Empowerment 2 3 major categories in craft hadi (cloth that is woven from handspun yarn) cotton wool handlooms processi ng of cotton textile by hand silk handlooms processing of silk textiles by hand zari (silver and luxurious weavework) and embroidery carpets miscellaneous products made of wood, bamboo, cane and grass leather assembly earthenware plating/polishing/ engraving metals jewelry and related products qualification of melodic instruments I. CHAPTER Craftspeople The Backbone of Indias Non-Farm Rural Economy 4 To write about Indian handicrafts is almost like writing about the country itself.So vast, complex and colorful, and so far with a simplicity and charm, difficult to attain to a lower place comparable conditions Upadhyay, M. N. Handicrafts of India. 4 India has one of the most diverse and ancient traditions of handmade products, and its handicrafts industry is an consequential economic and cultural asset. According to the Twelfth Five Year Plan, handicrafts production is expected to double between 2012 and 2017 and exportings are projected to grow at the compounded annual rat e of 18% during the same period. As a reply, the craft sector will employ an supernumerary 10% of individuals per year up to that time. 6 The crafts value chain encompasses the full range of activities required to bring a handicraft product from conception through production to delivery to consumers. The government activity, the buck personal sector and non salary confuse vie and come on to play an primal role in the sectors culture, although their efforts remain isolated and thus modified in their impact.From Vishwakarmas Children to Poverty A Socio-economic Profile of Artisans Chart1 The story of Indian crafts is deeply embedded in mythology, history and culture as can be seen in Chart 1. Artisans are considered to be the descendants of Vishwakarma the presiding graven image of crafts and architecture. During the Vedic Age craftspeople enjoyed a high social standing and were part of the landed g ingress, responsible for the creation of temples and palaces. In the cast e hierarchy that evolved during the stand Vedic period, craftspeople were associated with Shudras or the lowest caste callable to the manual temper of their work. magic spell Hindu artisans occupied the lower echelons of the caste system, due to the menial nature of their work, artisans from other non Hindu religious communities were equally stigmatized. This adverse status led to a deeply rooted stigma which persists today long after the abolition of the caste system. Nevertheless(prenominal), in subsequent eras when India was inhabited by exalted kingdoms, crafts continued to flourish because of their utilitarian nature, royal patronage and the organization of artisans into guilds. Until the trice half of the 17th century, crafts enjoyed a steady market.With the decline of princely states, the entry of the East India Company and colonization, employment in crafts especially handloom declined due to cope between India and the UK which was organized and regulated by and large by colonial powers. The result was the fragmentation of the artisan friendship, pronounced by ine flavour between those that could produce for British markets, principals and those that were only exposed to local markets. Subsequent industrial enterprise marked the steady decline in crafts markets and livelihood potential for artisans.Despite the central role played by crafts in the freedom movement, where Mahatma Gandhi in raised the nation to produce by hand, and subsequent benefit measures implemented by the Indian judicature, artisans (with the exceptions of traders, and extremely narrow operate craftspeople) never regained the social status and sustainable income they once possessed. The singularity of Indias craftspeople has been their ability to work across religious, caste and cultural divides. Such a meeting of distinctive traditions has fostered dialogue, social inclusion and an extraordinary creativity.ROYALPATRONAGE Crafts employtoreceiveroyalpatronage, whichhas nowdisappeared. Further, kinsperson craftsnolongerfitintoeverydayusageas theyoncedidduetoincreasing urbanization. Thehandicraftand handloomsectorsarea 24,300crore (USD4. 48bn) industrylend 10,000crore (USD1. 85bn) toIndiasexportearnings of1. 62lakhcrore (USD300bn). 8 An important economic and cultural asset Indias myriad crafts traditions and living crafts skills are vehicles of its cultural identity element, passed on from generation to generation and a means of sustenance for numerous communities engaged in production.Crafts constitute one of the primary sub-sectors within creative and Cultural Industries, defined by UNESCO as industries which produce tangible or intangible artistic and creative outputs, and which render a potential for wealth creation and income generation through the fostering of cultural assets and the production of knowledge-based goods and services. 7 The crafts sector encompasses diverse activities ranging from embroidery and painting to leatherwork and p ottery, with variations and neck of the woodsal specificities within each group.There are thousands of living crafts in India. For simplicity, these can broadly be mum as handlooms and handicrafts. Together handicrafts and handlooms play an important role in the Indian economy. Handicrafts typically refer to artifacts made by hand for decorative, religious or functional purposes. These products are oft found in diverse markets from draw and quarterways in Paris, and highend designer stores to domestic retail outlets and tourist emporiums. SWADESHIMOVEMENT Handproductionwasstronglyrootedinthe independencemovementandGandhisprinciples.However,themovementlostsignificanceinthe publicsperceptionafterthe50sand60s. INDUSTRIALIZATION Thefactorysectorhas inherenteconomiesof scaleandgreater engagementingpowerfor cheaperhighercalibre rawmaterials,whichhas adverselyaffectedthe craftssector. Further, thissectorhasbeen divertinglaboraway fromskill-based occupations. globalization ChallengeL ackof consumerawareness abouttheimportance ofcrafts OpportunityCrafts providecompetitive edgeandunique identitytoIndiaina globalmarketplace 5 6Broadly, artisans are divided into the following categories with a rigid hierarchical division of labor between more and less skilled artisans in a particular craft ? Skilled master craftsman ? Wage-worker ? Fully self-employed artisan ? Part-time artisan An estimated 63% of artisans are self-employed while 37% are wage earners. 9 Traditional knowledge and craft skills are passed down from one generation to another, so that whole families and communities are engaged in production. An estimated 71% of artisans work as family units and 76% attribute their profession to the fact that they fox learnt family skills. 0 It is important to note that most official figures count only the passing game of the production unit and wage earners in official figures, leaving out the 5-6 family members who are also dependent on crafts for sustenance, thus c reating an incomplete reasonableness of the sectors size and importance. The vast majority of artisans operate in in courtly work settings. In fact, according to one composition, Vishwakarmas Children in 2001 only 9% of craftspeople benefited from formalized employment, while 42% worked out of their homes. 11 Most artisan production units tend to be micro enterprises.In fact, 39% of artisans incur production expenditures of less than INR 12,000/ USD 215 a year and only 19% spend above INR 50,000/ USD 900 a year. 12 Typically artisans sell their products to diverse markets including local markets, city outlets, private agents, wholesalers or retail traders and exporters. A meaningful analysis of the sector requires pore on particular geographies and crafts. For this report, we focused on the crafts sector in the states Gujarat, Uttar Pradesh, Rajasthan and Odisha. These permit among the largest number of artisans, as shown in the map 2.In addition, Dasras mapping of non kale in volved in the sector, revealed the highest concentration of non wampum working at scale in these states. The Crafts Value Chain is unconnected For a comprehensive netherstanding of the stream state of the crafts sector, as well as areas that need improvement, it is important to understand the crafts value chain. The crafts value chain shown in Chart 3 has been urinated based on our observations on the ground as well as inputs from sector experts. It aims to demonstrate the different stages in craft production from producers to markets and inputs required at each stage.It must be noted, however, that each craft will have a slightly different set of processes. The stages explained below have thitherfrom been simplified to a certain degree to provide a general rationality of how the crafts sector functions. Chart3TheCraftsValueChain PROCESS INPUTSREQUIRED Organization Human Resources ? LegalEntities ? Procuring and Processsing affectionateMaterials ? ? ? Credits Facilities engine ering science Chart2 DistributionofIndianArtisans 40% 29% 13% Production ? ? ? ? Design Technology Skills try reading Aggregation and Intermediary Trade Transport toMarkets ? Quality Checks ? depot ? ?ODISHA UTTARPRADESH GUJARAT-RAJASTHAN Markets Marketing and Promotion 7 SourceExportPromotionCouncilforHandicraftsand CouncilofHandicraftCorporationsand victimizationCommissioner(GovernmentofIndia) 8 1. Organization Artisans are usually structured into groups through informal contracts between traders, master artisans and low-skilled artisans. much formal systems of artisans organization involve four main types of entities13 ? self-importance Help Groups (SHGs) are set up with the help of external proficient intermediaries such as non profits or through Government schemes, and typically comprise 10-20 artisans, usually women.SHGs serve as a form of social collateral, enabling artisans to establish linkages with input providers such as raw material suppliers, microfinance instituti ons and banks, and downstream players such as aggregators and retailers. Organization are often hale to rely on local traders who provide them with raw materials against orders, albeit at high prices, or switch to non-traditional raw materials. 3. Production Although techniques and processes vary widely from one craft to the next, crafts production generally takes place in households, with multiple family members engaged in different aspects of the process.Even where organized artisan structures exist, artisans typically produce within community settings. Production is generally seasonal, with crafts activity cosmosness suspended during harvest-feast season, as most artisans are also engaged in horticulture to supplement their livelihoods. 4. Aggregation and Intermediary Trade ? Mutually Aided Co-operatives (MACs) are effectd to provide artisans with a platform for equitable participation. Legislated at the state Government level, MACs enable artisans to pool funds as equity and own their production units.However, due to strong Government influence, this structure has failed to gain popularity in most states other than Andhra Pradesh and Kerala. ProcuringandProcessing RawMaterials ? Producer Companies were created as a for-profit legal entity in the Companies story in 2002 to enable primary producers to participate in will power and post equity. ? Private Limited Companies are for-profit legal entities that allow artisans to participate in ownership as shareholders, while enabling external funders to invest capital.Aggregation involves convey together products from decentralized production units to enable economies of scale in transportation, repositing and retail. Due to the dismal status of infrastructure and communication in India, aggregating products is a challenging task, and leads to many of the bottlenecks in the crafts tote up chain today. Buyers and retailers lose incentives to overcome upstream, supply-side issues, which results in a loss of opportunities for artisans to access markets. Aggregationand IntermediaryTrade Markets 5. MarketsThe markets for the craft products can be broadly understood as local, retail shops high-end as well as mainstream, exhibitions and exports. Among these, local markets are still the common markets for many artisans. 14 The contemporaneous markets, domestically as well as inter studyly, have grown with an expanding subscribe to for ethnic products that have a story linked to them. However, these products are in low supply due to supply chain inefficiencies. However, most artisans continue to work independently as there is a widespread overleap of awareness about the advantages of being organized into the above forms. Production accept 2. Procuring and Processing Raw Materials Traditionally, raw materials used by artisans were widely available due to the close linkages between evolution of crafts and locally available materials. Further, the jajmani system, which consisted of a reciprocal consanguinity between artisanal castes and the wider village community for the supply of goods and services, provided artisans with access to community resources. However, with the dislocation of these traditional structures, along with competition from organized industry, artisans find it challenging to deal lumber raw materials at affordable prices.In the absence of raw material banks, they 6. Demand With the advent of globalization and the availability of cheaper and more varied products, crafts face severe competition in contemporary markets. They are typically perceive as traditional, old-fashioned and antithetical to modern tastes. There have been limited efforts to reposition the image of crafts and build consumer appreciation of the history and cultural identity associated with handmade products. In addition, there are few instances of traditional crafts being contemporized to fit with changing consumption patterns. 10 Indias Crafts Sector is in trouble Whil e crafts received royal and aristocratic patronage during pre-Independence days and played a central role in Gandhis independence struggle, they have easily lost relevance with the advent of industrialization. Currently, the sector carries the stigma of inferiority and backwardness, and is viewed as decorative, peripheral and elitist. This is compounded by the Governments treatment of crafts as a sunset(a)(a) industry, which has resulted in a lack of well-developed policies and programs to protect and strengthen the ecosystem for artisans.Traditional crafts have largely been marginalized by massproduced consumer goods, which tend to be cheaper due to the economies of scale associated with mechanization. The nature of the crafts sector and challenges go about by artisans reduces their ability to compete with machine-made products. Catering to the mainstream market often necessitates a decline in quality and/or workmanship, leading to the eventual loss of skills over a few generat ions. There are very few instances like pashmina shawls where a traditional craft has success richly contemporized itself for Indian or overseas markets.Artisans were traditionally an essential part of the village economy, producing everyday utilitarian objects catered towards local markets, using designs and motifs that were of significance to their communities. However, with the advent of industrialization and increasing urbanization of markets for crafts, the historical artisan-consumer relationship has broken down, and largely been replaced by traders. This has rendered artisans knowledge and skill, acquired over generations, virtually useless and made crafts an unsustainable source of livelihood.The tail fin main challenges facing artisans in creating sustainable livelihoods in todays economy can be described as follows low education levels for the family overall. The lack of education makes it difficult to manage inventory, access Government schemes and market nurture and bar gain with traders and middlemen. It is estimated that in 2003 around 50% of household heads of crafts producing families had no education whatsoever, and more shockingly, around 90% of the women in these households were completely undereducated. 5 Outdated Production Methods- Artisans whitethorn also lack the financial capability to shape up engine room in production, or undergo necessary training on a regular basis, as would be available to them in a formal work setting. This compromises the quality of their products and raises the cost of production. 2. brusque Inputs Inadequate Inputs There are three main issues Lack of Quality Raw Materials- Rural artisans often lack access to quality raw materials. Due to the low volumes required, they have low negociate power and are forced to buy deficient materials at a higher price.In crafts such as weaving, handloom weavers have to compete with the power loom industry for high quality raw materials, which are more easily accessible t o the power loom industry as a result of Government subsidies. Further, many raw materials used normally by craftspeople such as wood, cane, silk, scrap and virgin metal are become progressively difficult to acquire. The costs of some of these materials are rising slope faster than the wholesale price index. Lack of Funding- Craft producers suffer greatly from lack of working capital and access to credit and loan facilities.Often, producers are unable to ful gourmandize bulk orders because they lack the capital to purchase raw materials, and simultaneously support their familys living needs while the order is being executed. While there are several Government schemes intended to fill this gap for artisans through institutions such as National Bank for kitchen-gardening and Rural Development (NABARD) and Small Industries Development Bank of India (SIDBI), it is difficult for the uneducated artisans to access these programs and manage the necessary collateral or funds for bribes.Ba nks cite poor recovery rates, wrong utilization of funds, lack of selling facilities for destroyed products and lack of education on part of the borrowers as reasons for the low residuum of loans made to artisans. In general, this forces artisans to borrow from their local moneylender or trader at high interest rates. The All India Debt and Investment Survey (2002) showed that the simile of money borrowed by rural households from money lenders rose by over 10% from 17. 5% in 1991 to 29. 6% in 2002. 16 1.Low productivity The sectors informal nature and the low education of most artisans create issues such as Unorganized Production- As a largely unorganized sector, handicrafts faces problems such as a paucity of professional infrastructure such as work sheds, storage space, shipping and packing facilities. Low Education- Many crafts require the entire household to participate in production in some capacity. For example, in weaver households, women and girls traditionally undertak e warping of the yarn, winding the thread onto bobbins, and share with men the task of starching the thread.In many cases, crafts also serve as a seasonal source of income for agricultural households. This means that children miss school, resulting in LowProductivity 11 12 Artisans financial weakness also hampers their ability to sell they have low bargaining power at the marketing pourboire and are forced to sell to buyers at a low price in order to recover costs and support themselves. Design Inputs- In most traditional societies, design evolved in the interaction between the artisan and the consumer.Further, the artisan was aware of the sociocultural context of the consumer, and could thus design products that suited their needs and tastes. Due to the breakdown of the historic artisanconsumer relationship, and the increasing urbanization and globalization of markets for crafts, artisans have difficulty understanding how to tailor their products to changing demands. The artisan may not speak the same language as the consumer, both literally as well as metaphorically. An example of this includes women in SEWAs craft cooperatives who design block printed table napkins and mats, but may have never used these products themselves. f this, retailers have to directly source from select producers, which is often not viable in the long run, resulting in the loss of a large percentage of the market for artisans. 5. Lack of an Enabling Environment Information imbalance 3. Information Asymmetry Neglect by Central and State Governments- Rural artisans are neglected by both Central as well as State Governments, as is evident in the lack of available records regarding their numbers and socioeconomic status. The Government views the sector as a sunset industry, no longer relevant in Indias technologydriven economic growth.Thus, schemes intentional for artisans tend to have low priority in terms of execution and assessment. at heart crafts, the Governments priorities a re skewed towards the export market, with 70% of its crafts budget going towards development of environments to enable export. 17 Further, the fact that the crafts sector falls under the skyline of 17 different Government ministries, ranging from the Ministry of Textiles to the Ministry of Women and Children, results in confusion and inaction. Lack of interest by Second Generation- Rural youth are increasingly bountiful in continuing their family craft traditions, for three main reasons.First, having seen their parents struggle to find markets and fair prices for their products, they are inclined to pursue other trades. Second, the school system today does not integrate lessons regarding the importance of crafts into the school curriculum, and instead students are pushed towards white collar office jobs, even if they are lower paying. Finally, crafts are strongly associated with a familys religion. In many cases, such as leatherwork, artisans are ostracized for being from the low est caste, which further dissuades rural youth from joining the family trade.Reducing the obstacles faced by the sector can provide employment for millions of citizens especially those traditionally excluded from the mainstream, while restoring one of Indias key cultural and economic strengths, a diverse and rich handicrafts industry. At the same time, it will provide the economy with key drivers of specialization and competence in global manufacturing. Lackofan EnablingEnvironment Due to their low education, artisans often cannot identify potential new markets for their products, nor do they understand the requirements for interacting with these markets.This reduces their understanding of the market potential of their goods, the prices of their products in different markets, Government schemes instituted for their welfare and diversification opportunities. 4. Fragmented value chain Lack of Market Linkages- While consumers of crafts products are increasingly becoming urbanized, craf ts continue to be sold through local markets artisans have few opportunities to reach new consumers through relevant retail platforms such as department stores and shopping malls.Further, due to their rural orientation, artisans are often unable to access training and technology to supply their products to online markets. Dominance of Middlemen- Although middlemen are necessary to enable effective market linkages, they often, if not unendingly, exploit artisans by paying them a fraction of their fair wages. This may be due to lack of information on the part of middlemen about true manufacturing costs, or merely due to their ability to coerce artisans, who often lack bargaining power.Lack of Aggregation- Crafts production typically takes places in scattered clusters in rural areas, while markets are usually in urban centers. Currently, there is a lack of organized systems to efficiently aggregate goods from small producers, carry out quality checks, store approved goods in warehouse s, and supply them to wholesalers and retailers in urban areas. In lieu Chart4 OverviewofKeyChallenges FacedbytheArtisans Fragmented ValueChain LackofMarket Linkages Lackofan enabling environmentNeglectby CentralandState Governments LackofInterest bySecond Generation LowProductivity Unorganized Production LowEducation Inadequate Inputs LackofQuality RawMaterials LackofFunding Fragmented ValueChain Information Asymmetry Dominanceof Middlemen Lackof Aggregation OutdatedProduction Methods 13 14 II. CHAPTER Government, Private Sector and Non Profit Initiatives Photo Credit Sahaj 15 The Indian Government, the private sector and the non profits are each involved in the sector but their roles have evolved in silos, with little specialization and much duplication.Since independence, the Indian Government has created a number of institutions, schemes and welfare programs for the crafts sector. However, on a polity level there has been no concerted and cohesive effort to look at the challen ges faced by the crafts ecosystem, with most governmental offerings mired in bureaucracy and inefficiencies. Simultaneously, the private sector has contributed to uplifting artisans through different market-led efforts made by retail chains, high end-fashion designers and a relatively more recent wave of social businesses.Non profits have been particularly active in the crafts space since the early 1960s and have evolved numerous models to improve artisan livelihoods. The chart below provides an overview of the evolution of crafts policy and programs in India. Government Program Although Government-led initiatives are often criticized, it cannot be denied that India is in a much more prospered situation today in the preservation of its crafts than most other nations because of Government efforts immediately following Independence.During this period, the Government placed great emphasis on rural artisans, setting up the All India Handicrafts Board in 1952 to study the technical, o rganizational, marketing and financial aspects of crafts and design measures for improvement and development of crafts. The impetus for these efforts came in part from Mahatma Gandhis legacy of the swadeshi movement and preserving cottage industries as a token of Indias diversity and unity as a nation-state. Pioneering efforts were made to provide marketing support to artisans, and make regional crafts available at a topic level through state-run emporiums.With industrialization becoming a foremost home(a) priority in the 1960s and 1970s, the Government came to view crafts as more of a sunset industry and began to focus mainly on welfare schemes quite than approaching it as a sector capable of contributing to Indias economic growth. Several divisions were made between State and Central Government responsibilities, and separate administrative bodies were set up for Khadi, Handloom, Handicrafts, Silk, and so on, all of which contribute to inefficiencies and inertia in policymaking for the sector today.At present, crafts are almost artificially diverge into Handicrafts and Handlooms, with two separate Development Commissioners in charge of each under the ministry of Textiles. In addition, 16 other ministries have crafts within their purview, including the Ministry of Agro and Rural Industries, Ministry of tribal Development, Ministry of Rural Development and the Ministry of Women and Child Development.These bodies have often been pitted against each other on issues such as power loom versus handloom production, anti-dumping tariff on foreign silk yarn to protect the interest of silk rearers versus removal of employment for handlooms and power looms and interest of petty traders versus greater control for home-based producers, leading to inefficiencies and policy juggernauts. 19 Governmentefforts havechanneled anestimated 752crore intothecraftssector duringtheEleventh FiveYearPlan(200718 2011). Anumberofinstitutions havebeeninvolvedin fundingandimplementing developmentworkfor artisansthroughdifferent schemes.Suchas 1. Councilforthe AdvancementofPeoples ActionandRuralTechnology (CAPART) 2. KhadiandVillage IndustriesCommission (KVIC) 3. SmallIndustries DevelopmentBankofIndia (SIDBI) 4. NationalBankfor AgricultureandRural Development(NABARD) Chart4StakeholdersintheCraftsValueChain PROCESS Procuring and Processsing RawMaterials Aggregation and Intermediary Trade STAKEHOLDERS Organization InputSuppliers Production Markets LocalTraders IndependentArtisan SHGsCo-operatives, Producercompanies NonProfits SocialBusinesses Government Exporters Retailers 16 17Despite these challenges, the majority of Government funds have been utilize in the following areas, largely with the support of non profits working in the sector ? Welfare- Government efforts in the crafts sector are often designed with the intention of large-scale poverty alleviation. Schemes such as the Rajiv Gandhi Shilpi Swasthya Bima Yojana and the Janshree Bima Yojana for Handicrafts Artisans, under which artisans in the age group of 18-60 receive health and life insurance in association with the Life Insurance Corporation of India for themselves and three dependents, provide some social security.Market Linkages- One of the most widely lauded efforts of the Government in the crafts sector has been the establishment of Dilli Haat, an open-air crafts bazaar in the national capital sculptural on a traditional village market where artisans from around the country can rent space and display their wares for two weeks at a time. Set up in cooperation with Dastkari Haat Samiti, a non profit organization that whole kit with artisans across the country, Dilli Haat has provided artisans with much- inevitable market linkages and access to consumers.In addition, the Development Commissioners for Handicrafts and for Handlooms run a number of emporiums across the country, which are retail outlets for crafts from different regions. Capacity Building- In recent years, the Gov ernment has moved its focus towards sustainable development of crafts through the participation of artisans. Capacity building efforts such as the Artisan Credit bait scheme and the Baba Saheb Ambedkar Hastshilp Vikas Yojana scheme are generally led by the Development Commissioner of Handicrafts.Efforts include skills development, technological intervention, design and marketing support and reviving languishing crafts. The Development Commissioner for Handlooms runs Weavers kernels in many parts of the country along with the National Center for Textile Design to provide marketbased design input for handloom weavers. Awards- Each year, the Ministry of Textiles recognizes the work of several master craftspeople through the distribution of national awards. These are super coveted accolades that elicit the reputation enjoyed by master craftsmen and function as a quality approval of sorts. Private Sector InitiativesThe private sector has been the main conduit for crafts with over 95% of crafts production winning place through some form of private enterprise. Broadly, private involvement in the crafts sector is of four types ? ? Traditional Intermediaries Historically, private involvement in the crafts sector has been dominated by master craftsmen, traders and exporters who aggregated production, provided market linkages and offered financing mechanisms to artisans. Although not always the case, these relationships have often been exploitative to the artisan, who realized little of the value of his products.Design Entrepreneurs These include high-end fashion houses that have imbedded traditional crafts in their collections. Designers such as Ritu Kumar, Tarun Tahiliani and Manish Malhotra have worked closely with master craftsmen to create product offerings for high-end domestic and international markets. However, no(prenominal) of these efforts have placed crafts distinctly at the center of their enterprises but rather integrated crafts into their work. Thei r impact on promoting crafts has therefore been largely indirect. Other fashion designers such as Anita Dongre have created a istinct crafts-based collection, Grassroots, that aims at marketing enclothe that promotes the skills and knowledge of traditional artisans, and has been made using organic materials and eco-friendly processes. Mainstream Retail There have been a few successful examples of crafts-based businesses, which have not only contributed to improving numerous artisans livelihoods but have also provided unique blueprints for future market-based endeavors. However those that exist are success stories that need to be more systematically replicated.Social Businesses These are a more recent wave of businesses that have originated out of non profits or hybrid models that combine social and commercial-grade goals. ? ? ? ? ? ? Photo Credit Sahaj Photo Credit Sahaj ? ? ? The Role of Mainstream Retail While relatively few, a handful of retailers such as FabIndia, Anokhi and C ontemporary arts and Crafts have played a pivotal role in retentiveness crafts relevant and linked to contemporary consumers. These companies have developed 18 For Government efforts to have the maximum impact, Government bodies mplementing programs need to be reformed and a policy environment more conducive to greater participation and specialization by different stakeholders needs to be created. 19 socially sure business models wherein they work closely with artisans and ensure that they are equal stakeholders in the business. Due to their relatively well-organized supply chains and focus on profitability, they are able to provide consumers with quality products better suited to urban tastes as compared to subsidized crafts available at Government-run emporiums.The success of these models has been built on the eagerness of their founding members, who have overcome challenges in the crafts value chain through innovative strategies that not only ensure bottom-line growth for bus inesses but also fair and consistent wages to artisans. These models include ? Fabindia, founded by John and Bissell in 1960, Indias largest private crafts business that has taken tradition techniques, skills and hand-based processes to global markets. The company has been recognized worldwide for its socially responsible business model that connect over 80,000 craft producers to markets.This has been achieved through its innovations in supply chain management through Community Owned Companies (COC), which serve as intermediaries and are owned by communities. Artisans form a significant part of the shareholding of these companies. Fabindias supply chain (in the chart below) consists of numerous backward and forward linkages in a multi-layered supply chain from suppliers or artisans to Fabindia stores. These linkages ensure that products sold cater to consumer tastes, a quality measurement and timely delivery. The multi-layered supply chain ensures that each groups strengths are s upplementd efficiently. Anokhi, founded by reliance Singh, is a clothing chain well known as an substitute role model for good business practices, and the ongoing revival of traditional textile skills. The company works closely with the Jaipur Virasat Foundation that provides capacity building inputs to artisan suppliers on design, techniques, quality control and enterprise development. In addition, the foundation works in other areas of Rajasthans cultural industries such as folk art, music and dance to promote livelihoods and preserve heritages.Contemporary Arts and Crafts (CAC), founded by Vina Mody and run in partnership with Feroza Mody, is a boutique retail outlet that provides unique and rare craft products to urban consumers. CACs success is based on its strong relationships with artisan communities in Gujarat and Rajasthan from where products are sourced. The CAC team invests significant time in understanding craft products and working with artisans to create outputs that will be appreciated in urban markets.In addition to these efforts, stores such as Shoppers Stop and life style have expanded their selections of handmade products and ethnic wear, providing much needed market opportunities for the crafts. However, for a deep and sustainable impact on the artisan, retailers and mainstream businesses need to leverage their business acumen in tackling supply chain issues and creating a big demand for these products. ? 6 The SRC repleshnishes the inventorying by getting more of the fabric from the weaver FabindiasSupply ChainStructure The weaver weaves some yardage and shows it to a regional supplier region company (SRC) HOWTHEFABRIC REACHESTHESHELVES Fabindias Supply Chain is split into 17 regional supply companies The Role of Social Businesses The emergence of the social business model has provided a new opportunity to revive the sector. With their emphasis on the end consumer, social businesses have a greater incentive to bring in efficiencies in quality control and production management, which are often lacking(p) in non profit organizations.Pre-production, social businesses may offer access to quality inputs, equipment, financing and training. Post-production, they improve market linkages through procurement, storage, transport and retail. Social businesses achieve this by focusing on three main areas, which essentially sets them apart from non profits ? Supply Chain Efficiencies Given the scattered and homebased nature of crafts production, enterprises often face challenges in ensuring a regular supply chain for their products. Social businesses have focused on fixing the rural supply chain for crafts, either by filling in missing or Through an order booking system, the store manager books the quantity needed. From the SRC warehouse stock moves to the Fabindia regional warehouse Around 40,000 artisans supply goods for Fabindia It now has 144 stores in 35 top towns 2 The SRC calls the designers they approve the fabric, work with the weaver to develop some samples. Photo Credit Top Anokhi Bottom CAC 4 20 The weaver brings the completed order to SRC warehouse 3 Designers show samples to Fabindias product selection committee, the price is finalised and an order is placed with the weaver 21 eak links in the value chain through their own operations, or by establishing creative partnerships with non profits, Government bodies, corporations and community groups. ? Artisans Ownership The advantage of functioning as a business rather than a non profit in the crafts space is the ability to involve artisans as owners by giving them shares in the company. This ownership brings with it an increased sense of duty and efficiency, which is sometimes difficult to achieve in a non profit. In this way artisans are not only vested in the companys growth but also financially benefit from it through issue of dividends.Market Linkages Due to their focus on standardization and supply chain management, social businesses are in a better position than non profits to create and maintain links between artisans and markets domestic as well as international. Corporates typically prefer to partner with social businesses to bring crafts products to market due to more efficient processes in the company. This ownership brings with it an increased sense of responsibility and efficiency, which is sometimes difficult to achieve in a znon profit.Further, in this way artisans are not only vested in the companys growth but also financially benefit from it through issue of dividends. The biggest advantage faced by social businesses is their ability to raise capital from artisans in the form of shares, as well as external investors such as venture capital funds and corporates. In recent years, businesses in the crafts sector have attracted funding from impact investors such as Avishkaar, Grassroots Business Fund and Villgro, who invest in social enterprises with the dual expectation of social impact and financial returns. Industree- Linking Artisans to Mainstream Markets Industree, a social enterprise that connects rural producers to urban markets has been able to speedily scale up operations through equity investment by Kishore Biyanis Future Group. This has enabled them to set up a retail brand called amaze Earth, and increase the number of clusters from whom they source crafts as well as provide artisans an opportunity to link to mainstream urban markets. ? Support from Multi-lateral Agencies and FoundationsThe international development community and private foundations have been pivotal in providing support to many non profits working in the crafts sector. United Nations agencies such as UNESCO have provided platforms for sharing best practices, enquiry and documentation such as the Jodhpur Symposium. These initiatives have typically focused on project design and building frameworks to build a movement that strengthens creative and cultural industries. Others such as the public Bank c hannel funding to crafts organizations.A number of private foundations such as Aid to Artisans, Sir Dorab Tata Trust and the Ford Foundation provided long term passs to crafts non profits to scale their impact. Innovative approaches include Friends of Women World Bankings funding dodging of credit provision to artisans through non profits. Together these efforts have helped sustain non profits work and strengthened models creating an impact on artisans incomes. Thecooperativemovement spearheadedbyElaBhatt, founderofSelf-Employed WomensAssociation (SEWA),inthe1970s alsohadapositiveimpacton thelivesofself-employed womenartisansthroughthe formationofcraft cooperatives.Thesemembership structuresallowedthemto workwithinequitable structuresandreceivecredit, designandmarketinginputs, withoutfearofexploitation bymiddlemen. The Evolution and Role of Non Profit Interventions Non profit organizations have been the strongest supporters of the craft industry, both in terms of livelihoods proc ession as well as cultural preservation. Following post-independence industrialization, the crafts industry was no longer viewed as an economic priority by the Government, which created a keep off in terms of support and finance available for the sector.A number of non profits were established in the 1970s and 1980s to fill this void and enhance the sustainability of artisans livelihoods. Many of these were run with the help of volunteers and were able to grow and thrive under a strong, charismatic leader with a clear vision for the sector. Examples of successful social businesses in the crafts sector include ? Rangsutra- Enabling Artisans to Own a Share of their Crafts Rangsutra was set up as a company of artisans, all of them shareholders, from remote parts of the country.It seeks to be a bridge between artisans and customers, tradition and contemporary, and change and continuity and ensures a fair price to the producer and quality products for customers. It currently has 1,100 s hareholders and has attracted investments from Avishkaar and Artisan Microfinance Private Limited (AMFPL), a subsidiary of Fabindia. Photo Credit Sahaj 22 23 Most non profits functioning in the crafts space today are registered as trusts, societies or Section 25 companies. They are broadly of two types, based on their scope of work ?Producer Groups A majority of non profits in this space ? work directly at the grassroots level, organizing crafts producers into collectives to realize various economies of scale in financing, marketing and product development. Examples are URMUL, Kala Raksha and SEWA Ahmedabad. ? Apex Organizations These focus on enhancing the sector ? by providing services ranging from design interventions to market linkages to groups of producers, who typically serve as part of their membership base.They vary in scale and level of outreach from national to state to local levels. Many apex organizations are well-positioned to act as a bridge between producer groups an d Government bodies, both by channeling information regarding relevant Government schemes as well as by influencing Government spending. Prominent examples are Dastkar, AIACA, Dastkari Haat Samiti and Sasha. Non profit approaches have evolved significantly in two main areas focus of the model and financial sustainability.Most non profit groups have focused on all parts of the value chain from organizing artisans to marketing products, largely due to a lack of other players specializing in certain areas. This has resulted in limited capacity to scale their operations. Fresher non profit approaches focus on one or two parts of the value chain such as aggregation or working closely with artisans groups. Further, there has been a realization in recent years that traditional grant funded projects for creating crafts production structures have not succeeded in establishing commercially sustainable structures.Newer non profits have attempted to embrace this change in perspective by incorpo rating fee-based enterprise development projects into their scope of work, others have spun off business models that conduct aggregation and marketing, while the non profit focuses on building artisan capacity. The different stakeholders described above have each made significant contributions to the crafts sector. However, since they act in isolation from each other, their impact remains limited and they have not been able to halt the downward slide of Indias crafts sector. 24 25 III. CHAPTERHarnessing the Potential of Indias Crafts Sector Photo Credit Jaipur Rugs Foundation 26 The crafts sector in India has vast potential to improve livelihood opportunities, generate additional income and strengthen the purchasing power of rural communities. For this potential to be fully realized, the gaps, overlaps and challenges in the value chain must be overcome to create an ecosystem that enables crafts to thrive. The different stakeholders involved need to come together to build what we ca ll the four cornerstones of artisan sustainability. Non profits have a particularly important role in such a program.Based on Dasras research, interviews with experts in the crafts sector and advisory committee discussions, Crafting a Livelihood suggests four key actions with the potential to transform artisans livelihood in India. The four cornerstones are 1. Handholding the Artisan through the Value Chain Any investment in improving the craft ecosystem as a whole must pay particular attention to strengthening the individual artisans and enterprises engaged in production. Since challenges faced by artisans are pushing them into other dailywage earning jobs, concerted efforts are needed to upgrade the current piecemeal nature of production.Crafts promotion efforts should focus on making artisans aware of the value of their skill, which would make them take greater pride in their work and encourage the second generation to enter the sector. Further, it is essential to help artisans c ontinuously upgrade their skills and product offerings. This requires design inputs and skills development efforts. 2. Increasing Demand for Crafts and Strengthening Market Linkages There is an urgent need to revive consumers interest in crafts and make crafts relevant to increasingly urban lifestyles.Efforts are needed to sensitize the emerging middle class consumer to the history and value of crafts in India to ensure a robust domestic market. Strengthening branding efforts and introducing geographical indicators such as a Handmade in India classification, will enable Indian crafts to compete in increasingly global markets. Crafts can be branded on the national, regional or local, and enterprise level. On the national or regional level, some countries are known or even famous for their excellence in handicrafts, or in specific crafts.The branding of a countrys handicraft image depends on the public perception of that countrys culture and handicraft skills. Countries that, for di fferent reasons, de-emphasize their indigenous culture and traditions and focus on their modernism create a much tougher environment for the promotion and export of their indigenous handicrafts. 21 Crafts lies well within the informal sector, bringing with it challenges of taking a completed product to market. Most artisans produce at relatively low volumes and at irregular intervals, creating few opportunities to market products at scale.New business models are needed that blend social and commercial goals to provide value added services to artisans particularly in aggregation of products and intermediary trade. As artisans are scattered across geographies, there is a need for players who can source products from them in a centralized fashion and introduce economies of scale into the supply chain. These intermediaries will provide the essential bridging Asartisansareoftenproducing formarketsthatarealiento them,theyneedsupport servicessuchastechnicaland designskillbuildingtohelp rea chtheincreasinglyurban consumer.Theseinputswill increasetheirbargaining powerandbuildtheircapacity tosupplydifferentmarkets. Dasrasfieldresearchhas shownthatbuildingthe capacityofartisansinthis mannercanresultinuptoa ten-foldincreasein incomes. 1. Handholding the Artisan through the Value Chain 2. Increasing Demand for Crafts and Strengthening Market Linkages AconsumersurveyinEurope revealedthat40%of consumerssurveyedwere willingtopayapremiumof 10%fororigin-guaranteed products. SalesofIndian craftsstandtoincrease 20 fromsuchefforts. 3. Strengthening the Decentralized Production Model 4. Building a Multi-Stakeholder Approach 7 28 services between small producers and the different markets where products can be sold and thereby smoothen seasonality of production. Creativeclustershavebeen identifiedasanimportant meansformicroandsmall enterprisestogrowstrongly throughmutualstimulation andleveragingofcommon knowledgeandmarkets. Typicallytheybenefitfrom lowerVAT,tariffsandexcise dutiesonha ndmadeproducts. Creativeclustershavethe potentialtonotonlycreate productionefficienciesbut alsoprovideaplatformfor artisanstoaccesslocaland domesticmarkets. 3. Strengthening the Decentralized Production ModelThe disconnected supply chain, lack of organization and seasonal production characteristic of the craft sector need to be overcome to maximize production potential. geographically scattered production, which is typical of the crafts sector, requires services at artisans doorsteps. Leveraging technology for information as well as for innovations in process will plunge efficiencies in craft production and enable artisans to produce more. Limited education and low exposure to the skills essential to running a business rule out artisans from scaling up their operations.Providing business support in areas such as quality control, govern processes, inventory management, cashflow management and securing credit would help them create strong enterprises. To this effect, capacity buil ding cooperatives and producer owned companies would ensure standardized systems and processes, quality control, and professionally run businesses that can access capital and enable them to compete in markets. Dasras field research has demonstrated a potential three- to five-fold increase in individual income through these efforts.Moreover, fragmentation in the value chain can be overcome with clusters such as additional Economic Zones (SEZs) for crafts. These are defined as a combination of production and distribution activities operating within a common structure, capable of promoting creativity, research applications and distribution systems. Historically, clusters in India have been created for production and bureaucratic efficiencies, ignoring their function as a sales platform. While the sales focus has been tried at Bhujodi in Kutch, creative clusters are generally the exception in India. ensitizes them to crafts, deepens their understanding of tradition in a way that they c an implement in the mainstream. This fosters the perseveration of culture by continuously adapting it to modernity. Setting up academies for