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In which of the following systems, small producers/workers have more chances of getting a fair price for their products?

  • A.Putting out
  • B.Cooperative
  • C.Subcontracting
  • D.Outsourcing

Answer: B

Small producers have the best chance of a fair price under the cooperative system.

In a cooperative, producers pool their resources, buy inputs together and sell their output together, so the earnings are shared among the members instead of going to a middleman. Weavers' cooperatives and dairy cooperatives such as those in Gujarat are standard examples.

The other systems keep the small producer dependent. In the putting-out system a merchant supplies raw material and pays the weaver a low price for the finished cloth. Subcontracting and outsourcing pass work down a chain to the cheapest producer, so the worker at the bottom earns the least.

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