Grading and Standardization of Agricultural Products
Standardization and grading are the first steps in the value-chains of an agricultural produce as it travels in a market channel to the consumer. Price of a produce has to be commensurate with quality, the assessment of which depends on a responsive system of grading and standardization. Hence, it is incumbent on the extension functionaries to promote grading of different commodities at the farmer level and facilitate linkage of the price to the quality by establishing appropriate buyer-seller linkage.
Due to variations in quality of agricultural produce brought to the market by farmers over time and over regions, it is essential to grade the produce on scientific lines for linking the price of the produce to the variations in grade and quality. Scientific grading should be based on objective evaluation of quality aspects so that the sellers could be able to describe the quality that they are offering and the buyers should understand what is being offered to them in the market. In view of this, efforts have been made to organize the marketing of agricultural commodities on scientific lines after the enactment of the Agricultural Produce.
Agricultural Produce (Grading and Marking) Act empowers the Central Government to prescribe grade standards for agricultural commodities and livestock products and stipulated conditions governing the use of grade standards and laying down the procedure for grading. At present, there are 213 agricultural commodities for which grade standards have been prepared by the Directorate of Marketing and Inspection (DMI) under the Ministry of Agriculture and Farmers welfare, Government of India. Graded agricultural produce bear the AGMARK label. The different categories of grading promoted by DMI can be classified as follows:
- Domestic consumption of agricultural commodities;
- Exports of agricultural commodities; and
- Agmarking at producer’s level.
Grading and standardization is a marketing function which adds value to a produce, as it moves along a channel. Without standardization, there is confusion and unfairness as well. Standardization is a term used in a broader sense. Grade standards for commodities are laid down first and then the commodities are graded according to the accepted standards (quality specifications). But if these quality specifications vary from seller to seller, there would be a lot of confusion about its grade. The top grade of one seller may be inferior to the second grade of another. This is when buyers lose confidence in grading. To avoid this eventuality, it is necessary to have fixed grade standards which are universally accepted and followed by all in the trade.
Standardization is the determination of the standards to be established for different commodities. The standardization can be defined as the determination of the basic limits on grades or the establishment of model processes and methods of producing, handling and selling goods and services. Thus, standardization aims at making quality specifications of the grades uniform among the buyers and the sellers over space and time.
Standards are established on the basis of certain characteristics such as weight, size, colour, appearance, texture, moisture content, staple length amount of foreign matter, ripeness, sweetness, taste, chemical content, etc. termed grade standards. Thus, standardization means making the quality specifications of the grades uniform among buyers and sellers over space and time.
Grading can be defined as the sorting of the unlike lots of the produce into different lots according to the quality specifications laid down. Each lot has substantially the same characteristics in so far as quality is concerned. It is a method of dividing products into certain groups or lots in accordance with predetermined standards. Grading follows standardization. It is a sub-function of standardization.
Types of Grading in India
- Fixed Grading/Mandatory Grading (Sorting out according to size, quality & other characteristics, which are fixed)
- Contrived / de-centralized grading — the packer either sets up his own or get the lots graded in approved laboratories.
- Grading at producers level: – Under this programme, free grading facilities are provided to the farmers for sorting the produce before offering for sale.
- Grading for export.
Advantages of Grading
The advantages available to the producers and consumers due to the adoption of grading are:
- Grading facilitates marketing, as consumers are well aware of the grade designations of different products and as such avoids the necessity for convincing on the part of the sellers for the quality of the product to the consumers. This ensures a common trade language.
- Grading widens the market for the product as buying and selling of graded products can take place between the parties located at distant places without physical inspection of the product.
- Grading reduces the cost of marketing by minimization of expenses on the advertisement, costs due to storage losses, costs on account of personal inspection, etc.
- Grading enables producers to get higher prices for their produce as most consumers prefer buying better quality products at higher prices.
- Grading helps in the performance of various market operations such as better packaging, pooling of produce, improving keeping quality of the produce and in getting of claim settlement from transport agency in case of damages during the process of movement, etc.
- Grading helps the consumers in getting of quality products at fair prices and hence minimize the purchasing risk of the consumers.
- Grading increases pricing efficiency through the creation of better market competition, etc.
- Grading and standardization have now assumed added importance for modem instruments of agricultural marketing such as futures/spot marketing, contract farming, retail chain linkage, export marketing etc.