Cottage industries
By Yvonne Harvey, Contributor

HELLO FRIENDS. We are still on Unit VI ­ Organisation of the Factors of Production. Our topic today is Cottage Industries.

A cottage is a farm house, usually in rural areas. A cottage industry is a small self-help industry that is carried out in the home, community centre, parish hall or some other convenient place. Such industries are evident in handicrafts, catering, tailoring, dressmaking, beauty culture, retailing of dry goods, pottery and furniture making on a small scale.

Cottage industries developed mainly out of the need for an additional source of income, because of the need to use one's spare time gainfully and because of the relative ease of acquiring the necessary raw materials to set up such industries.

Originally, cottage industries came in the form of farmer's wives who were engaged in making pepper sauce, jams, pickled and bottled fruit, small garments, pottery etc. in their homes,

Today, the development and survival of cottage industries is possible through the help of family members and the government. Such industries have diversified to include a vast array of products, with a market amongst tourists and even many locals.

In the Caribbean a number of natural resources form the basis of cottage industries. These natural resources include sand, seashells, calabash, seeds, bamboo, straw, coconut shells, wood and fruits. Cottage industries also make use of discarded items such as bottles, plastic cups, match and fudge sticks, boxes etc.

With the development of Tourism in the Caribbean, the opportunities for expansion of the cottage industry have increased. Tourists seek out cottage items as souvenirs to take back to their own countries.

ADVANTAGES OF COTTAGE INDUSTRIES

1. Only minimal investment is needed to start up such industries.

2. Goods and services sold in these industries tend to be cheap because cottage production avoids many costs such as rental of office or plant space and storage costs. Lower costs of production can be passed on to consumers in the form of lower prices.

3. Cottage production is flexible, allowing persons to work at their own pace and at the same time allowing them to carry out home duties.

4. The nature of such industries allows for help to be provided by family members at little or no cost to cottage entrepreneurs.

5. The cottage industry is a possible answer to the unemployment problem plaguing many Caribbean territories as it provides a source of self-employment and income to many.

6. Cottage industries (especially those involved in handicrafts) have been instrumental in complementing and developing tourism.

7. Such industries help to cut down on the importation of many items and are a means of earning foreign exchange either by direct export or indirectly when goods and services are sold to tourists.

8. The earnings of cottage producers often supplement regular income and add to the national income and the circular flow of income of the country.

9. Many cottage industries grow into larger businesses and become major producers where they are able to reap economies of scale, which are benefits, or advantages of large-scale production.

10. Diversified production of cottage industries has given consumers wider choice while at the same time avoiding mass production, which is "distasteful" to consumers, most of whom like the "personal touch."

11. Cottage industries make use of idle natural resources, encourage recycling of used products and avoid the use of costly machinery and equipment.

12. These industries allow people to use and improve their creative abilities.

DISADVANTAGES OF COTTAGE INDUSTRIES

1. The major disadvantage of cottage industries is the difficulty in securing finance to start up the business.

2. While many of these industries use local materials, some find difficulty in procuring raw materials and have to resort to importing them using scarce foreign exchange.

3. Since these industries are normally small-scale, they hardly ever benefit from economies of scale.

4. As with other small businesses, long hours of work are required and at the end, producers sometimes find difficulty in securing markets.

5. Cottage industries are unable to compete on equal terms with larger businesses because of their use of simple and cheap machinery and equipment.

Now for your homework (Essay-type question)

(a) Explain the term 'cottage industry.' (2 Marks)

(b) Describe THREE characteristics of this type of industry. (6 Marks)

(c) Name THREE types of cottage industry that are in operation in your local community. (3 Marks)

(d) (i) Suggest THREE ways in which cottage industries benefit the local community. (3 Marks)

(ii) Discuss THREE problems encountered by cottage industries. (6 Marks)

Total: 20 Marks

NEXT WEEK I will provide a guide to the answering of the above question. The main part of the lesson will be on Linkage Industries. Bye for now.

* Yvonne Harvey teaches at Glenmuir High School.