COVID-19 impact on handicrafts sector: A struggle that only got harder

Since the COVID-19 lockdown, most of the artisans have been out of work. Only 15 out of 40 looms are operational. Stocks have accumulated and they are facing a severe cash crunch

Right now, for the handloom and handicraft artisans, it looks like the hardest and longest struggle for survival with no hope in sight Right now, for the handloom and handicraft artisans, it looks like the hardest and longest struggle for survival with no hope in sight

The timing could not have been worse. A falling economy, unemployment, reduced spending, the pandemic and subsequent lockdown have had a devastating impact on the handicrafts sector.  Artisans and weavers are the third largest segment among the poor. Most of their products are "non-essential" which could be the reason why their alarming situation is getting very little visibility despite the call for "vocal for local" and 'Atmanirbhar Bharat".

Four organisations working directly with artisans share their current reality.

Darbar Sahitya Sansada (DSS) works with eight hundred artisans in one hundred and fifty villages covering four districts of Odisha. These artisans make natural fibre products from coir and grass, applique products from cloth, terracotta products from clay, dhokra brass jewellery, and the famous Pattachitra paintings. DSS helps them with accessing raw material, design, market, and in availing social security benefits. Artisans earned between Rs 4000-Rs 7000 before the pandemic.

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Since the lockdown, production has stopped completely. Huge unsold inventory has piled up. There has been no sale either through exhibitions or through orders. They have no capital to reinvest. The artisans have neither food for daily consumption nor enough savings to meet medical expenses. DSS distributed provisions but could only reach four hundred out of the eight hundred artisans. It continues to appeal to various organisations, individuals, and platforms to raise money for relief distribution. Most artisans are now looking for agricultural work or to migrate again.  

According to Kedareswar Chaudhury, CEO, DSS, relief in terms of provisions needs to continue until the lockdown is completely lifted and artisans can resume work. There is a need for capital support in the form of grants or loans with low interest rates to revive production. There is an urgent need of handholding support for online marketing, design and cataloguing. More than ever, artisans need health insurance and social security now.

Abhihaara, a social enterprise, works with hundreds of artisans in three clusters of Telengana and Andhra Pradesh on handloom weaving and wooden toy making. It helps the artisans with contemporary designs, provides raw material, pays fair wages, buys the products, and markets the same with 25% margin to meet its own overheads. The monthly income of artisans before the pandemic and lockdown was between Rs 6000-Rs 20000.

Since the COVID-19 lockdown, most of the artisans have been out of work. Only 15 out of 40 looms are operational. Stocks have accumulated and they are facing a severe cash crunch.

Abhihaara has reduced its overhead costs, provided provisions to staff and artisans and is giving work just enough so that they are able to meet their urgent basic needs. They are unable to purchase raw material and are taking only small orders that can be managed. They designed several campaigns to clear the existing stock and are also making masks.

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According to Sudha Mullapudi, CEO, Abhihaara, it would help to get GST relief for one year, to reduce the rate of interest for existing business loans and to support in sales through corporate orders for curtains, towels, napkins, masks etc.

Chitrika works with 300 weaver households in Srikakulam, East Godavari and Narayanpet (Andhra Pradesh & Telengana) collectivised as three producer companies.

Their revenue from sales has reduced to thirty per cent, leading to decrease in working capital availability. The shortage of raw material has resulted in fewer workdays and overhead costs have increased due to low production and sales.

For artisans, the living expenses have risen due to rising prices of essential commodities and also an increase in precautionary medical expenditure due to fear of the coronavirus. On an average, the artisans earned about Rs 10,000 per month before the lockdown. Chitrika organised distribution of groceries and compensated for wage losses.

Exhibitions have been cancelled since February 2020. Wholesale buyers' businesses have shut down due to which payments have not been made. Buying yarn has not been possible and dyeing units have closed. Weavers have lost wages and in the absence of raw materials and working capital, there is no certainty about when they can begin again.  Chitrika predicts an overall revenue loss of at least thirty percent for the enterprise.

According to the founder of Chitrika, Switha Grandhi, the pandemic has created specific, urgent, and new financial needs. Each household of an average of five members needs minimum Rs 7,000 to survive in a village. Weavers require immediate support in accessing essential commodities, social entitlements and support for basic healthcare expenses. Once the immediate sustenance needs are addressed, the medium term measures to sustain the business and getting the producer company back on profitable track is going to be a humungous task.

Until the economy stabilises, it is necessary to address the reduction of work, business losses because of cancellation of orders and reduced demand. At the very least, a sustenance allowance of Rs 3,000 for every household for the next six months needs to be provided. Working capital loans at zero or minimal interest rates to act as revolving funds would help.

Easing the movement of raw materials to restart and continue production and supply of yarn on credit, directing retailers in the organised sector not to cancel orders and free exhibitions stalls for one year when they start again are the steps that need to be taken now.

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Malkha, a Trust registered in Telengana, works with 120 artisans on cotton yarn spinning, natural dyeing and cotton hand weaving. Malkha supplies weavers with its own yarn, provides natural dyeing services, purchases the produce from the weavers, and markets the same. The artisans earn between Rs 3,000 to 8,000 a month.

Since the lockdown and social distancing resulted in minimised production, Malkha supported the producers by providing basic income from its own reserve.  

A KPMG study for the National Skill Development Corporation (NSDC) (2013-17, 2017-22) had estimated that approximately 7.3 million people depend on handicraft and allied activities for livelihood.

The handicraft and handloom sector in India is a Rs 24,300-crore industry and contributes nearly Rs 10,000 crore annually in export earnings. In the last financial year, the  handicraft sector earned Rs 36,7898 crore through exports and Rs 12,678 crore in the domestic market, handloom sector earned Rs 2,280.18 crore in exports and Rs 2,75,000 crore in domestic trade.

The 12th Five Year Plan had projected it would become the largest non-farm sector in rural India, swelling its workforce by 10 per cent, doubling the output and exporting 18 per cent more during 2012-17.

It is unfortunate that both All India Handloom Board and All India Handicrafts Board were abolished on July 27 and August 4 2020 by the central government without giving any reason or putting any alternative in place. Both these institutions connected the artisans with the government. They existed to facilitate better understanding, coordination and initiate actions that develop a favourable ecosystem for the local and handmade products.  

Right now, for the handloom and handicraft artisans, it looks like the hardest and longest struggle for survival with no hope in sight.

Uzramma, the founder of Malkha, has only one appeal to everyone "buy craft goods".

(The author is an independent development professional with deep interest in craft-based livelihoods, reuse, recycle and sustainable living.)