Civics Chapter 08: A Shirt in the Market

Cultivation of cotton requires high levels of inputs such as fertilisers and pesticides and the farmers have to incur heavy expenses on account of these. Most often, the small farmers need to borrow money to meet these expenses.

The merchant distributes work among the weavers based on the orders he has received for cloth. The weavers get the yarn from the merchant and supply him the cloth. The arrangement between the merchant and the weavers is an example of putting-out system, whereby the merchant supplies the raw material and receives the finished product.

A chain of markets links the producer of cotton to the buyer at the supermarket. Buying and selling takes place at every step in the chain.