Mahaguthi Craft With A Conscience

Poverty is not the choice of people and poor people are not responsible for them being poor. It is the social and economic system that makes people vulnerable to be poor depriving their access to basic need for their livelihood. Alleviating poverty only be possible by providing them opportunities and enabling environment where they can choose the alternative for their betterment. Empowerment is one best way of making poverty a history.

Fair Trade means economic empowerment of people. Giving them work, paying fairly and treating as people make all the difference to their lives, their children and society at large. Fair Trade works for people as it adopts people centered business practices, honors cultural values and respect indigenous craftspeople. The business terms are defined in fair and equitable manner, where preferential discretion is given in favor indigenous, under privileged artisans and producers. Profit is not the ultimate goal it is just the by-product that all the stakeholders enjoy while practicing human centered business i.e. fair trade.

With our own experiences of last two decades, we are very much confident that it works for people, it works in giving people a sustainable means of living. We have been able to create sustainable rural/micro enterprises, empower hundreds of people, develop their potentialities, and giving them a dignified living with the skill they have. Abide by the fair trade principles and the values we are making difference to the people and the societies.

The Origin

Nepal Charkha Pracharak Gandhi Smarak Mahaguthi now known as Tulshi Mehar Ashram established in 1927 by a philanthropist and Gandhian Late Mr. Tulshi Mehar Shrestha. He was trained with Mahatma Gandhi and returned to Nepal to initiate Gandhian non-violence movement against Rana Rulers. He started « Charkha- movement » by distributing cotton to destitute women in villages and started weaving projects. Institution was established to provide vocational training to destitute women; poor & socially discriminated women from various parts of Nepal came to stay at Ashram for training which had transformed their lives.

To sell the fabrics woven by those trainees at Ashram, Mahaguthi Craft With A Conscience was established in 1984 as a project. Its first small craft shop was established in the premises of palace courtyard of Patan Durbar. Later it expanded its networks to provide support services to small crafts producers.

Craft: Part of Social Life

The wooden windows and alleys of ancient palaces, stone paved courtyards, natural water fountains with stone carvings, thousands of temples and stupas, shrines, traditional houses and beautiful architect in Kathmandu Valley tell the story of richness of culture and craftsmanship. Nepal is multi cultural and multi linguistic society where 67 ethnic groups inherit 69 dilates. Cultural diversity provides wide variety of art and craft product as daily part of their living. The art of making crafts are distributed among various ethnic groups and castes. People in particular caste or ethnic group master in particular skill.

Selling of crafts started with the inflow of tourist in late 70s; only afterward these craft products were defined as handicrafts. Resurgence in demand for hand crafted products in foreign markets has led to a revival in the production of handicrafts in commercial manner. The economic return in selling handicrafts encouraged revival of crafts making tradition thought out the country giving direct employment to thousands of people at their doorsteps.

Emergence of Fair Trade in Nepal

In late 70s and early 80s, there emerged various development interventions, which lead to develop present fair trade organizations here in Nepal. Women Skill Development Centre, started as a project of Government was pioneer institute to provide vocational training to low income women. It started selling various craft products specially, textile to ATOs such as Oxfam UK, Oxfam Australia and others.

In 1980, encouraged by the early Small Farmer Development Program success and by a long felt need to rejuvenate the fading handmade paper industry in rural Nepal, UNICEF launched its innovative « Community Development through the Production of Hand Made Paper Project ». The paper production in UNICEF project is used to make greeting cards printed with traditional designs and marketed in the World.

In 1984, Mahaguthi Craft With A Conscience and Association of Crafts Producers were established as NGOs to provide skill training to low income women and rural crafts people and provide market for products they made. These led to growth in NGO intervention in providing vocational training and income generation program consequently emerging Fair Trade Organizations. Now there are 16 fair trade organizations and even private business are turning into fair trade.

Fair Trade: True Partnership

We started with 3 looms with 5 people all together. Sure commitment, support from Northern Trading partners, and hard work from the producers established ourselves as one of leading fair trade organization in Nepal. At present we have 42 staffs and 70 In-house producers working every day and working with many producers group in 15 districts of Nepal many of them situated at remote villages.

In the beginning it was supported by Oxfarm UK. From the beginning, it has been interacting with fair trade market then known as Alternative trading organizations and third world shops. Trading partners such as Intermon Oxfam, SERRV International, CTM, Oxfam Australia, Nepali Bazaro and many others have been true companion for Mahaguthi through out its 20 years in service.

Fair trade has been successfully transforming people and societies to better off. It has provided people with opportunities for sustaining their livelihood. The trading partnership based on dialogue, transparency, and commitment to improve the wellbeing of the producers all that we have been practicing through out these years to stand ourselves to present position.

It has established as pioneer organization providing skill training, business support services and buy back guarantee to village crafts people. Working together with various development projects, it had extended its outreach to many village crafts producers. Now hundreds of people get direct or indirect working relationship with Mahaguthi.

With successful networking with Northern fair trade organizations, market expansion and growth have been remarkable over a period of time. At present over 95% of export trading is with fair trade organizations mainly Europe 65%, USA and Canada 25% and rest Japan, Australia, New Zealand.

For last five years, the total sales has been in increasing trend. In the year 2004/5 the total sales increased by 17.59% contributed largely by increase in export sales by 19.64%. Despite the drop in domestic sales due to deteriorating political situation, we maintained in sales growth by improving our long term trading relationship with Northern fair trade organizations.

With the increase in sales, it has been able to enjoy some surplus, which encouraged investing in more social activities and projects for sustainable livelihood. Producers working with Mahaguthi have been experiencing steady growth in their business as well as artisans working with those producers groups enjoy the benefits. In following aspect, increase in sales of Mahaguthi benefits its members/ producers and artisans:

1. More orders have been placed to producers groups such as paper, ceramic, textile, silver jewelry

2. To meet the production quantity and dead line, more people get employment opportunities with Mahaguthi and its member organizations

3. Improvement in technology, working condition, producers’ welfare due to improvement in earning, performance, consciousness and competency

4. New producers groups are created to fulfill the need

5. Earning of producers have increased substantially, some of Mahaguthi’s producers at tailoring section earn more (Approx. Rs. 6000 per month) than administrative staffs

40% of Net Profit is shared with Ashram for rehabilitation program, where now 70 women from various part of Nepal have been receiving vocational training. 10% is distributed among staffs and producers as annual incentives. Many producers group are participating in this scheme. Remaining is used for developing projects, producer development, research and development and investing the business.

Developing Competencies

We aim at empowering people socially and economically. We have been providing embedded and integrated business development services to the producers group to improve their performance.

A model is presented in Fig. II to illustrate how we work with the producers.

1. The potential producers groups/ artisans are identified with oneself or with partnership with other NGOs.

2. Assess local resources, producer’s capacity, skill and need

3. On the basis of assessment, intervention programs are designed and delivered, that includes training, product development, technical support, financial assistance. The intervention may differ according to the need of the groups.

4. Supporting that group/ producer to establish as enterprise (encourage for legal registration)

5. Linking its product to the market with intensive product promotion

6. On the basis of market feedback, design and deliver business development services (BDS) to that enterprise to sustain and grow.

7. The search of new producer group also sometimes necessitate from market demand.

8. Continuous orders are placed to the producers along with business development services.

Today, the in-house and external producers participate in annual planning workshop. They share their ideas and draw plans for future of Mahaguthi. People are involved in every step of the business practices. They are encouraged and empowered by continuous counseling, training and exposures.

Fair Trade: True Empowerment of People

I would like to share a case story of a group “Allo Cloth Production Club” that Mahaguthi has been working from the beginning. This is just one example how fair trade can make a difference to the lives of people living in remote villages of Nepal.

This is the case of women weavers group located in one of the remote Eastern Village of Nepal named Sisuwa Village in Sankhuwasabha District. The villagers had been using Allo fiber for various utilities such as sacks, rope, bags etc. for their daily use. Allo is a kind of shrubs grown wildly above 8000 ft. altitude. The skill of cultivating this shrubs and weaving rope or fabric is their inherited skill.

To provide supplementary income to those low income villagers, a volunteer (Ms. Susi Dunsmore, a British Citizen) associated with Koshi Hill Development Project (KHAEDEP) initiated trail marketing in Kathmandu via. Mahaguthi, in 1985. With little hope, in 1987, the scattered weavers were grouped into a Allo Cloth Production Club, which was formally registered in 1990. Starting with 30 weavers in two villages, now the number reached to four hundred and all of them are women.

Now, more than 400 women are directly depends upon harvesting and producing Allo cloth. Their supplementary income for health care, education for children, clothing and their social activities largely depend upon earning from the selling of Allo cloths. These villagers have no other source of income for hard cash than producing and selling Allo products. These villagers collect the fabric to the club, and via club they sell to the market. The club has been managed by themselves. The village women are empowered in such a way that they elect their leader in every 2 years, they sit for board meeting, formulate policies and manage the club.

Today, Allo becomes very known to most of Nepalese and also one of the important fabric products that has been exported. Allo fiber production and making craft out of it has been already established as important industry, where hundreds of people depend on it. Many villages through out Nepal are following the path of Allo Club and started producing natural fiber as their livelihood.

Today, the in-house and external producers participate in annual planning workshop. They share their ideas and draw plans for future of Mahaguthi. People are involved in every step of the business practices. They are encouraged and empowered by continuous counseling, training and exposures.

Fair Trade Makes Difference

Fair Trade makes differences to the artisans and producers if not today surely tomorrow; if not them surely their children. I realized how true this sentence when I heard a weaver in our production section shared her dream to educate her daughter to be able to make her officer at Mahaguthi. Most of producers, who didn’t have opportunity for education, who had hard life have common goal i.e. to make lives of their children brighter, happier and more comfortable.

Fair Trade works very much for small crafts producers who produce crafts miles away from the market place and couldn’t find time to sell his/her product into the market. For them fair trade is easy market access. Mahaguthi is risk free market for many producers. It has been selling crafts products though its three retail outlets in Kathmandu and through export trade.

Fair trade is all about improving; be it business or their lives. Mahaguthi has been there all the time. Mahaguthi has provided funds to artisans to create their own small enterprises or loan to improve/ expand business. Technical support, design and enterprise management supports have been provide to producers with out any cost. I feel it very much important in Nepalese perspective where small producers are more vulnerable of market complexities, lack of support services and institutions. Small producers cannot get bank loan in absence of collateral, their traditional skill do not fit into market demand, their managerial capacities are not sufficient to cope with the business challenge. In this condition, without support, these small crafts producers couldn’t find a living. Integrated and embedded services are needed to protect these vulnerable artisans. Fair trade practices provide them sustainable market, new design and market information, transfers of technical know how, finance and all above little bit of courage that is what they need most.

At Mahaguthi I feel honored in sharing smiles, being able to contribute in creating opportunities for many people. It has all been possible with our common understanding from South to North that Fair Trade works. It works today and will work tomorrow. Let’s make things happen. Together we make a difference.

{Complete article in word [here->aloe.socioeco.org/IMG/doc/Alleviating_poverty_via_Fair_Trade_Nepal.doc].

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From the Regional Workshop on Social Finance for SMEs with CSR Agenda held in Kuala Lumpur, Malaysia, from 10 to 13 March, 2009.