Profit disparities in handloom industry: A unit level analysis

Abstract

Historically Bengal was a renowned place of handloom production. It was the main source of world famous finest fabric, Muslin. Besides bringing fame, handloom was an essential source of employment and income for a large number of weavers. But, due to numerous reasons it started to decline at the late nineteenth century. Available research on handloom industry found that handloom in Bangladesh still faces various problems that make handloom activity marginally profitable. In addition, all handloom households do not get equal share of earning profit, indeed, there exists a huge discrimination where a large number of small scale handloom units exploited by small number of large scale units. Thus, the study is design to estimate unit level profitability due to exploring profit disparities among handloom units. For pursuing the study, required data is collected from 53 handloom units operating in Tangail district of Bangladesh. Using conventional statistical techniques, the study found that handloom weaving activity is still a profitable business, though marginally. Further, due to operating large number of handlooms, per unit profit is higher in case of larger units group compared to that of smaller units group. In addition, economies of scale benefited large scale units in ensuring more profitability in larger units group compare to smaller units group. All these factors resulted significant profit disparities among handloom units that poses threats to small scale units for survival.