SELF EMPLOYED WOMEN S ASSOCIATION TRADE FACILITATION CENTER

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1 SELF EMPLOYED WOMEN S ASSOCIATION TRADE FACILITATION CENTER Introduction Although globalisation and the liberalisation of markets hold out the promise of increased growth rates and a better standard of living for much of the world's population, there is general agreement that the poorest members of society are the least likely to benefit and that their situation often deteriorates if market forces are left to themselves. Nowhere is this more clearly seen than in regions such as the arid Northern Districts of the Indian State of Gujarat, where an uncertain living based on agriculture and cattle breeding has been characterised by lengthy migrations of people in search of work during ever more frequent periods of disasters, including cyclones, droughts, floods, epidemics and even the earthquake of January Background: The Banaskantha Experience It is in this disaster prone area of Banaskantha District of northern Gujarat that the Self Employed Women's Association (SEWA) has been working since the late 1980's to improve the living conditions of the poorest women and their families. As a result of SEWA's intervention, local women have returned to their traditional craft of embroidery to produce high quality items, which are sold through a new market infrastructure established by SEWA. Prior to this, women had no outlet for their craft. They were either producing it for their own personal use or had been selling it to the local traders at very low rates, despite considerable national and international demand. SEWA decided to intervene and break this exploitative relationship in the trade channel by organising the craftswomen, investing heavily in product development, and streamlining production systems. In 1991, SEWA assisted in the establishment of Banascraft, a retail and direct marketing outlet for the rural artisan groups at Ahmedabad, which, importantly, is owned by the producers themselves. The success of the Banaskantha experience became a model for the creation of Kutch Craft, which was later established in the district of Kutch in These two product development and marketing organisations have greatly increased the revenue earned by the women producing embroidered goods. An Integrated Approach SEWA has not only been supporting Banascraft and Kutch Craft in their craft related activities, but has also been providing banking, medical and childcare services to the craftswomen. SEWA s major contributions and interventions have been in the field of capacity building of the local craft groups to enable them to run their micro-enterprises in a sustainable and profitable manner. SEWA s agenda has always been to provide work security, higher wages and new opportunities for sustained work for the craftswomen to reduce their vulnerability and increase their social security benefits. SEWA TFC Case Study Page 1 June 26, 2002

2 A Long Journey The initial years were full of difficulties for the craftswomen. A market testing exercise had to be undertaken to ascertain the marketability of the handicraft products, and products had to be modified and adapted according to demand. The craftswomen were required to work according to the delivery schedule, a strict production process, and specifications in colours and patterns, all of which required changes in their work culture. Since it was essential for them to understand their potential customers, craftswomen started participating in exhibitions and fairs hundreds of kilometres away from their villages. This was a major accomplishment by the craftswomen, to travel outside the village unaccompanied by their men folk. This exposure to the market built their confidence in themselves and they understood the need for work discipline. Importantly, they also realised that craft has the potential of providing them and their families with sustainable livelihood security. Craft = Livelihood Security With skills that are unique to, and prevalent within, the villages of northern Gujarat, craft production is a practical and effective source of employment. Hence, taking stock of the skillbase of the community, during the recent spate of natural calamities, SEWA decided to use craft as a mechanism to convert the disasters into an economic and developmental opportunity. As a result, production was substantially up-scaled and it became possible for Banascraft and Kutch Craft to explore newer markets and increase market out-reach and penetration, both nationally and internationally. The marketing endeavours proved to be very successful and the experiences have been very positive, with substantial social spin-offs, including trauma relief, children continuing to go to school, and most importantly, empowerment. These innovative efforts have proven that craft can provide artisans with sustainable long-term employment, irrespective of the natural disasters plaguing the region, making craft in effect a disaster proofing tool. As a result of SEWA s involvement, the forced migration of families has successfully been reduced by 80 percent. STFC: The Glocal Connection - Linking the local rural micro-enterprises with the global economy Based on the positive experiences of using craft as a disaster mitigating tool, the need arose to substantially up-scale craft production and marketing endeavours, in order to make craft a source of full employment to all its artisans members. This would also demonstrate how the most marginal of people rural women in remote, cyclone, drought, and earthquake stricken areas of India can seize the new economic opportunities arising from globalisation. However, even at this stage they face five major problems: [i] [ii] [iii] [iv] [v] The lack of market information, intelligence and access. The lack of capacity and entrepreneurial skills to run their own enterprises. The lack of access to capital. Policy constraints. Supply-Demand mismatch. SEWA TFC Case Study Page 2 June 26, 2002

3 However, SEWA realizes that entering the large, profit oriented mainstream markets requires an effort at a much larger scale. SEWA s recent and positive experience of working in partnership with the State Government regarding marketing through Mahila Haat has shown that with a professional approach it is possible to substantially increase access. This approach now needed to be up-scaled in order to enter national and international markets, which require greater effort and resources. SEWA s experience indicated that it would be ineffective for women producers in the informal sector to jump straightaway into mainstream markets. It was recommended that initially a proper buffer be created which not only absorbs the pulls and pressures of the market forces but also guides and helps the disaster affected rural artisans in a stepwise manner to carve out a niche in the market. This GLOCAL connection of linking local rural micro-enterprises with the global mainstream markets is facilitated by the creation of the SEWA Trade Facilitation Centre (STFC). STFC serves as a bridge between the rural micro-level enterprises and global markets. It is unique in its efforts of strategically targeting markets, thereby influencing local wages and increasing the bargaining power of poor artisans. STFC helps in organising poor rural artisans so that they can engage in collective bargaining for their products and thus get adequate remuneration for their skills and labour. In order to achieve its main objective of linking artesian rural micro-enterprises with the national, international, global and virtual marketplace, and thereby offering access to both domestic and external trade opportunities and increased sustainable employment opportunities for the disaster-affected poor artisans, STFC follows an integrated marketing approach backed by research, data management, production related services and networking with a wider national and international market. To achieve this objective, STFC carries our various activities, including capacity building, product development and exploring new markets, as shown in Diagram 1. SEWA TFC Case Study Page 3 June 26, 2002

4 Diagram 1 Linkages with Professional Design and Management Institutions Streamlining Production and Marketing Systems Data Management and Warehousing Feedback from the Market SEWA Trade Facilitation Centre Forecasting Market Demands Product Development and Innovation Quality Control Scientifically Exploring New Markets To achieve its goals, STFC uses the latest management concepts and tools to realise the true potential of the products produced by the artisans and connect them with the targeted market arenas and segments. In its brief one and a half year period it helped to realise an annual growth of 62 percent in overall sales and 311 percent growth in exports in 2001 over the preceding year. Chart 1 gives the details of the growth in overall annual sales, while Chart 2 gives the annual growth in exports. Chart 1 Sales in Rs Lakhs' SALES Years SEWA TFC Case Study Page 4 June 26, 2002

5 Chart 2 Sales in Rs. Lakhs ICT for STFC 0 Exports Year Connecting the local with the global largely depends on laying down a set of systems to increase efficiency, efficacy and output; which in turn largely depends on the proper deployment of ICT solutions. STFC is making use of ICT solutions as a management tool. With these solutions, STFC has a comprehensive knowledge of all the production and sales related activities taking place. Thus, it is better prepared to manage the entire micro-enterprise activity from production to sales to marketing. It facilitates greater analysis of marketing data before new products are designed. It also provides management with the requisite information and data to deal with production planning related to incoming orders, the organisation of goods for upcoming exhibitions, sales and other such initiatives which require definite knowledge regarding existing inventory levels, market trends as well as new product development, and production. Furthermore STFC uses ICT tools to facilitate a greater collaboration between the various partner organisations such as the rural district associations. In addition, STFC has recently introduced a bar-coding mechanism for its products. This barcoding system was a much needed new addition to SEWA s existing craft related ICT infrastructure that provides a number of advantages. These include the acquisition of much needed market research, superior management of inventory levels, greater standardization and thus a more optimal utilisation of time and resources throughout the organisation. More importantly, it is expected that the bar-coding system will enable STFC to achieve international standards as per order of Code 128, thus further facilitating their present objective of selling to the wider international market. All of these will help STFC to increase its sales and thus accomplish its fundamental objective of providing greater livelihood security to its members. SEWA TFC Case Study Page 5 June 26, 2002

6 STFC: A Novel Concept in Poverty Alleviation By increasing opportunities for employment in handicrafts, STFC provides a means for women to achieve livelihood security and full employment. Even in times of disasters, women can be assured employment and that they will have a sustained income. STFC contributes to the women having choice for the first time in their work and greater control over their own outcomes. Through training programs and product development, STFC is involved in developing craft as an educational medium and a tool for development among women artisans. As capacities increase, women will take more of a leadership role and begin to pass on skills to others who want to learn. Starting with a vastly increased effort to market embroidered goods in national and international markets, at the end of five years STFC will have developed into a profitable institution, which is totally dedicated to assisting the poorest women to market their own products locally, nationally, regionally and internationally. For the women involved, this translates into increased dignity, a greater status for women, and a way out from the clutches of poverty. Much has been accomplished, and the impacts of SEWA s rural marketing programmes particularly during the drought and the earthquake have been very significant. However, much more needs to be done to bring women into the mainstream economy and to assist them to link with national and global markets on a sustained basis. In order to achieve this, SEWA is incorporating the STFC as a Company. This unique business model for poverty alleviation operates via a unique principle whereby the majority of shareholders are the disaster-affected artisans themselves. This is an innovative and effective mechanism for providing livelihood security to marginalized workers through the creation of a business entity, a notion that could easily be deployed across the globe as a blueprint for poverty reduction. This novel concept could herald a new road towards poverty alleviation. Prepared by: Vinayak Ghatate SEWA Trade Facilitation Center 702 Elegance Tower Opp. C.N. Vidhyalay Ambawadi Ahmedabad. INDIA Phone: , stfc@icenet.net or sewatfc@icenet.net Internet: SEWA TFC Case Study Page 6 June 26, 2002