Imagine walking into a bustling market, where the air is filled with the sounds of people bargaining, the smell of fresh fruits, and the sight of colorful stalls. Markets are lively places where people come together to buy and sell goods.
Whether it's fresh vegetables, clothes, or toys, markets are full of energy and excitement. Today, we'll explore what makes markets so special, how they work, and why they are important in our daily lives!
Weavers Producing Cloth
(i) Merchant-Weaver Relationship: The merchant decides what cloth the weavers make based on received orders. Weavers receive yarn from the merchant and provide the finished cloth.
(ii) Advantages for Weavers: Weavers don't spend money on buying yarn. They know in advance what cloth to make, and selling the cloth is taken care of.
(iii) Dependence and Power Imbalance: Weavers depend on merchants for raw materials and markets. Merchants have significant power as they give orders and pay low prices for the cloth.
(iv) Market Dynamics: Merchants sell the cloth to garment factories at the cloth market. The market tends to favor the merchants in this arrangement.
(v) Weavers' Challenges: Weavers invest their savings or borrow money at high-interest rates for looms (Rs 20,000 each). Small weavers with two looms invest Rs 40,000. They work up to 12 hours a day, earning about Rs 3,500 per month.
(vi) Putting-Out System: This arrangement is an example of the putting-out system. The merchant supplies raw materials and receives the finished product. Common in the weaving industry across many regions of India.
The Erode merchant supplies cotton cloth made by weavers to a garment exporting factory near Delhi. The garment exporting factory uses the cloth to make shirts.
Garment Exporting Factory
This system emphasizes the challenges faced by workers, especially women, in garment factories that export to foreign markets. The pressure to cut costs often results in temporary employment and lower wages for workers.
(i) Businessperson in the United States
Imagine someone buys shirts from a place called Delhi and sells them in the United States. They sell each shirt for $26 but they have to spend money to get the shirts, advertise them, and handle other costs. The total of all these costs per shirt is $900.
Now, let's figure out how much they bought each shirt for from Delhi.
Cost Price per shirt = Selling Price − Total Cost
Cost Price per shirt=26−900=−874
It seems something might be off here because we're getting a negative number. But if we continue with this, it means the person is losing money instead of making a profit. Let's move on to the exporter.
(ii) Garment Exporter in Delhi
The exporter in Delhi sells shirts to the person in the US. They sell each shirt for ₹300. But they have their own costs too, like buying materials, paying workers, and running their office. Let's add up those costs:
Total Cost per shirt = Cost of Materials+ Worker Wages+ Office Running Cost
Total Cost per shirt = ₹ 100 + ₹25 + ₹25 = ₹150
Now, let's find out how much profit the exporter makes on each shirt:
Profit per shirt = Selling Price − Total Cost
Profit per shirt = ₹300 − ₹ 150 = ₹150
So, the exporter makes ₹150 profit on each shirt they sell to the person in the US.
(i) Ginning mill: A ginning mill is where cotton is processed to remove seeds from the fibers. This process is essential for preparing cotton to be spun into thread and woven into fabric, playing a key role in the textile industry.
(ii) Exporter: An exporter is a person or company that sells goods or services to other countries. They help businesses reach international markets and play a crucial role in global trade.
(iii) Profit: Profit is the money a business earns after subtracting all its costs and expenses. It's the reward for successfully running a business and is essential for growth and sustainability.
66 videos|336 docs|46 tests
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1. How does the putting-out system work in the cloth market of Erode? |
2. Where is the garment exporting factory located near Delhi? |
3. How does the cotton farmer in Kurnool contribute to the cloth market? |
4. How are the garments from the exporting factory near Delhi different from those produced in the local market? |
5. What role does market and equality play in the context of the shirt industry discussed in the article? |
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