Agricultural and Livestock Marketing

7/30/2019 Agricultural and Livestock Marketing

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Agricultural and livestock

marketingChapter one:

Agricultural marketing- Definition and Scope


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Objectives

After the completion of this chapterstudents will be able to:

Identify the concept and definition ofAgricultural marketing

Describe the classification andcharacteristics of Agricultural products

Explain the importance of Agricultural

marketing in the economic developmentDiscuss the history and growth ofAgricultural marketing


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Group discussion

Form a group contains four or fivemembers:

Discuss on:

1. What is agricultural marketing

2. What looks like the place of

Agricultural marketing in agricultural

development of our country

3. The importance of agricultural

marketing in the economic

development.


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Attendance

Date: Hidar, 9/20041. Assefa L.2.Taddese3. Hassen H4. Bogale5. Essayas6. Wubetu7. Dawit

8. Wegen9. Yihun10.Adebabay


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1. AGRICULTURAL

MARKETING-Definition and

scope1.1 Concepts and definition1.2 Classification of agricultural

products

1.3 Characteristics of Agriculturalproducts

1.4 Agricultural marketing and

Economic development

1.5 History and growth of Agricultural

marketing


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1.1 Concepts and definition of

Agr. marketingAgricultural marketing was, till recently,

not fully accepted as an essentialelement in agricultural development inthe developing countries.

Agriculture marketing occupies a fairlylow place in agricultural developmentpolicies of

developing countries. Countries has emphasized that it is not

enough to produce a crop or an animalproduct; it must be satisfactorily

marketed.


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Contd

The term agricultural marketing is composedof two wordsagriculture and marketing.

Agriculture, in the broad sense, means

activities aimed at the use of natural

resources for human welfare, i.e., it includes

all the primary activities of production.

But, generally, it is used to mean growing

and/or raising crops and livestock.


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Contd

Marketing connotes a series ofactivities involved in moving the goods

from the point of production to the

point of consumption. It includes allthe activities involved in the creation of

time, place, form and possession

utility.


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According to Thomson, the study of

agricultural marketing comprises all theoperations, and the agencies conducting

them, involved in the movement of farm

produced foods, raw materials and theirderivatives, such as textiles, from the farms

to the final consumers, and the effects of

such operations on farmers, middlemen and

consumers.

This definition does not include the input side

of agriculture.


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Agricultural marketing system in

developing countries can be understood tocompose of two major subsystem

product marketing and input (factor)

marketing The actors in the product marketing sub-

system include farmers, village/primary

traders, wholesalers, processors,importers, exporters, marketing

cooperatives, regulated market

committees and retailers.


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The input sub-system includes inputmanufacturers, distributors, relatedassociations, importers, exporters andothers who make available various farmproduction inputs to the farmers.

Agricultural marketing is the study of allactivities, agencies and policies involved inthe procurement of farm inputs by thefarmers and the movement of agricultural

products from the farms to the consumers. The agricultural marketing system is a link

between the farm and the non-farm sectors.


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Agricultural marketing, therefore, canbe defined as comprising of all

activities involved in supply of farm

inputs to the farmers and movement ofagricultural products from the farms to

the consumers.

The scope of Agricultural marketinginclude both product marketing and

input marketing.


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1.2 Classification of agricultural

productsAgricultural products can broadly be

classified into seven categories:

Food grain items

Oilseed produce Horticulture produce

Fiber products

Beverage items Cash items

Animal produce

Cl ifi ti d b


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Classification and sub-

classification of Agricultural

products.I. Food grain items WheatRice

Maize

II. Oilseed produceGroundnut

Sunflower

Coconut

SoyabeanMustard

Castor


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III. Fiber productsCottonJuteIV. Beverage itemsTeaCoffeeTobacco

V. Cash itemsSugarcaneRubber


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VI. Animal produce

Milk

Fish

Eggs

Poultry

Wool

Meat


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VII. Horticulture produce

Flowers Spices VegetablesFruits

Roses Cashew nuts Potatoes Mango

Jasmine Areca nuts Cauliflower Grapes

Medicinal plants Onion Orange

Green leafApple

CabbageGuava


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Classification of Agricultural

productsAgricultural products can be classified into

various categories on the following basis:

(1) On the basis of season

Agricultural products can be classified into

two categories on the basis or seasons;Rabi and Kharif.

(i) Rabi: Sowing is done from October to

December andharvesting season is fromMarch to May. The various Rabi cropsinclude wheat, potatoes and barley.


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(ii) Kharif: Sowing for the crops is donefrom April to July andharvesting isdone from September to December.

The various crops of Kharif seasoninclude rice, sugarcane, jute, bajra,

maize, cotton and groundnut.


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(2) On the basis of encashabilityAgricultural products can be divided into

two categories-food crops and cash crops.

The food crops refer to rice, wheat, barley,

maize etc.

while cash crops or commercial cropsinclude tea, coffee, rubber, oil seeds,

tobacco etc.


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(3) On the basis of perishability

Agricultural products can be classified intotwo categories perishable and non-

perishable products.

Generally all the vegetables fall in thecategory of perishable agricultural

products as they survive only for a few

days while cereals and pulses can survive for

years and hence can be classified in the

category of non-perishable agricultural


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(4) On the basis of processing

Some products require processing

before they are finally consumed while

others need no processing at all. cotton, jute, wheat, rice etc. require

processing but vegetables, milk,

fishes etc. do not require anyprocessing.

1 3 Ch t i ti f A i lt l


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1.3 Characteristics of Agricultural

productsThe special characteristics which the

agricultural sector possesses, and which aredifferent from those of the manufactured

sectors are:

Uncertainty Heterogeneity of the produce

Perish ability

Seasonality Processing

Bulkiness

Small size of holdings and scattered


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a) Uncertainty

The supply of Agricultural products isUncertain and irregular because it is

largely depend on rainfalls (natural

conditions)

b) Heterogeneity of the produce

There is a large variation in the quality ofAgricultural products, which makes their

grading and standardization somewhat

difficult.


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Contd

C) SeasonalityFarm products are produced at a particular

season, they can not produced throughout

the year. Hence maintaining smooth

supply of agricultural products throughout

the year, calls for good and large storage

space.


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d) Perish ability

Agricultural products are more perishablethan industrial goods. Most of the farms

products perishable and can not remain

long on the way to final consumer withoutsuffering loss and deterioration in quality.

e) ProcessingMost of the farm products need some kind

of processing before they are consumed.


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Contdf) Bulkiness

The characteristics of bulkiness of mostfarm products makes transportation andstorage difficult and expensive.

g) Small size of holdings andscattered production

Farm products are produced throughoutthe length and breadth of the countryand most of the producers are of smallsize. This makes the estimation ofsupply difficult and creates problems in

marketing


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1.4 Agricultural marketing and

Economic development

The importance of agricultural marketing in the

economic development can be understood through

following reasons.

a) Optimum use of resourcesA good marketing system leads to the optimum use of

resources and output management. An efficient

marketing system should be developed so that we

can scale down the losses arising out of inefficient

processing, storage, and transportation. As a result

the income of the farmers increase, and that result

in increased demand for industrial products.


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b) Increase in farm income

An efficient marketing system ensures higher

levels of income for the farmers by reducing

the number of middlemen or by restricting the

cost of marketing services and the

malpractices adopted by them. It avoids the

commission based system in which farmersare not involved.


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C) Widening of marketsAn efficient marketing system widens

the market for the products to trade

anywhere in the world. The wideningof the market helps in increasing the

demand on a continues basis, and

thereby, guarantees a higher incometo the producer.


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d) Growth of Agro-based industriesAn improved and efficient system of

agricultural marketing helps in the

growth of agro-industries andstimulates the overall development

process of the economy. Many

industries like cotton, sugar, edibleoils, food processing and jute depends

on agriculture for the supply of raw

material.


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e) Adoption and spread of new

technology.The marketing system helps the farmers in

the adoption of new scientific and

technical knowledge.f) Employment creation

The marketing system provides employment

to millions of persons engaged in variousactivities, such as packaging,

transportation, storage and processing.


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g) Addition to national income

Marketing activities add value to the productthereby increasing the nations gross

national product and net national product.


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h) Better standard of living

Better marketing system leads to thebetter standard of living of the farmers.This system provides more disposableincome in the hands of the farmers andthat income is spent by the farmers toavail and enjoy modern facilities liketelephones, bikes, TV, clothing, and even

cars and computers. Therefore, modernfarmers are able to enjoy better standardof living besides contributing to the growthof the economy.


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i) Earning foreign exchange


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1.5 History and growth of

Agricultural marketing


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2. ORGANISATION OFAGRICULTURAL MARKETING

At the end of this chapter you will beable to:

Identify the meaning and components

of a market Identify the various methods of

classifying agricultural markets

Identify the components of market

structures and its dynamics Identify the market forces and how

they affect the price determination.


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2. Organization of Agricultural

marketing

2.1 meaning of market2.2 Components of a market

2.3 classification of markets

2.4 market structure

2. 5 Market forces


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Absentee

Samuel Yihun

Dawit

Wubetu

Anteneh


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2.1 Organizations of Agricultural

markets In order to know more about

agricultural marketing, let us discuss

how agricultural marketing activities

are organized. This calls for a clearunderstanding of concept components

of a market, classification of markets,

market structure and market forces


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2.1 meaning of a market The word marketcomes from the Latin wordmarcatus

w/c means merchandise or tradeor a place where business is conducted.

The word market has been widely andvariedly used to mean:

a) A place or a building where commodities arebought and sold, e.g super marketb) potential buyers and sellers of a product eg.

Wheat market and cotton market

c) Potential buyers and sellers of a country orregions eg. Ethiopian market, African marketd) An organization which provides facilities for

exchange of commodities


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The word market in the economic sense carries

a broad meaning1. A market is the sphere with in which price

determining forces operate

2. A market is the area within which the forces of

DD and SS coverage to determine a single price3. The term market means not a particular market

place but the whole of any region

4. Markets means a social institutions w/c performsactivities and provide facilities for exchangecommodities b/n buyers and sellers


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5. Economically interpreted, the termmarket refers, not to a place but to a

commodity/ies and buyers and sellers

are in free intercourse with oneanother.

6. The AMA has defined a market as the

aggregate demand of the potentialbuyers for a pdt/service, while Kotler

defined market as an area for potential

exchange

2 2 C t f k t


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2.2 Components of a market For a market to exist, certain conditions must be

satisfied. These conditions should be both

necessary and sufficient.

The conditions termed as the components of a

market.

1. The existence of a good or commodity fortransactions( physical existence is , however, not

necessary);

2. The existence of buyers and sellers

3. Business r/n s/p or intercourse b/n buyers and

sellers

4. Demarcation of area such as places, regions,

countries or the whole world. The existence of


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2.3 Classification of Markets

Markets may be classified on the basis of

various dimensions. There are variousdimensions of any specified market.

These dimensions are :

Location or place operationArea of coverage

Time span

Volume of transaction Nature of transactions

Number of commodities

De ree of com etition


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Contd

Nature of commodities Stage of marketing

Extent of public intervention

Types of population servedAccrual of marketing margin


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1. On the basis of location or place ofoperation

Markets are of the following types:a) Village market: a market w/c is located in

small villageb) Primary markets: markets are located in

towns near the centers of production ofagricultural products. Transaction in thesemarkets takes place b/n the farmers andprimary traders.

c) Secondary wholesale markets : locatedgenerally at district HQs or important tradecenters. The transactions take place b/n thevillage traders and wholesalers


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d) Terminal markets: one where the pdtis either finally disposed of to the

consumer or to the processor or

assembled for exports. Such marketsare usually situated in metropolitan

cities

e) Seaboard markets: which are locatednear the seashore and are meant

mainly for the import and/or export of

goods. These are generally seaport

towns.


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2) On the basis of Area/coverage

Depending upon the type of area served, theagricultural markets can be classified as

a) Local or village markets: The local markets

cater to the needs of only the local population.

It exist mostly for perishable commodities insmall lots

b) Regional markets: a market in w/c buyers and

sellers for a commodity are drawn from a largerarea than the local markets

c) National markets

d) International markets


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3) On the basis of time span/frequency

a) Short period markets: the mkts w/c are held only

for a day or few hours. Products highly perishablein nature.

b) Periodic markets:are held weekly, biweekly,fortnightly or monthly

c) Long period markets: are held for a longer period.The commodities traded in these markets areless perishable and can be stored for sometime;like food grains and oilseeds.

d) Secular markets: are permanent in nature. Pdsare durable in nature and can be stored for manyyears. Eg, machinery and manufactured goods


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4) On the basis of volumes of transaction

a) Wholesale market: is one in w/ccommodities are bought and sold in largelots or in bulk.

b) Retail market: is one in w/c commodities are

bought by and sold to the consumers as pertheir requirements.

5) On the basis of transaction

a) Spot or cash markets: A market in w/c goodsare exchanged for money immediately aftersale

b) Forward markets: the commodities are

traded for future delivery.


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6) On the basis of number ofcommodities in which transactiontakes place

a) General markets: A market in w/c all

types of commodities, such as foodgrains, oilseeds, fiber crops etc, arebought and sold.

b)Specialized markets: A market in w/ctransactions take place only in one ortwo commodities. Eg, food grainmarkets, vegetable markets etc.


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7) On the basis of degree ofcompetition:

a) Perfect market is one in w/c the

following conditions hold good There is a large # buyers and sellers

Both buyers and sellers have perfectknowledge of the market

The prices are uniform

The products are homogenous


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b) Imperfect markets

Monopoly markets: monopoly is a marketsituation in w/c there is only one seller of a

codty

Duopoly market: a mkt has only two sellersOligopoly market: a few sellers

Monopolistic competition : large # sellers deal

in heterogeneous and differentiated form of acommodity.


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8) On the basis of nature ofcommodities

a) Commodity markets: a market w/c

deals in goods and raw materials,such as wheat, barley, cotton, etc.

b) Capital markets: the market in w/c

bonds, shares, and securities arebought and sold


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9) On the basis of stage of marketinga) Producing markets: w/c mainly

assemble the codty for furtherdistribution to other mkts

b) Consuming markets: Mkts w/c collectthe pdt for final disposal to theconsuming popn.

10) On the basis of extent to publicintervention

a) Regulated markets

b) Unregulated markets


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11) On the basis of type of populationserved

a) Urban markets

b) Rural markets12) On the basis of market

functionaries

a) Farmers

b) Cooperative markets

c) General markets


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Group Discussion

Form a group w/c contains 4 or 5individuals and discuss on:

1. Market structure

2. Market forces


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2.4 Market structure

Meaning The term Structurerefers to sth that

has organization and dimension

shape , size and design; and w/c isevolved for the purpose of performing

a function.

The term market structure refers tothe size and design of the market. It

also includes the manner of the

operation of the market.


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Some of the expressions describing the

market structures are:1. It refers to those organizational cxs of a

market w/c influence the nature of

competition and pricing, and affect theconduct of business firms

2. It refers to those cxs of the market w/c affect

the traders b/hr and their performance

3. It is the formal organization of the functional

activity of a market institution

Components of Market structure


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Components of Market structure The components of the market structure, w/c

together determine the conduct and

performance of the market are:1. Concentration of market power

It is an important element determining thenature of competition and consequently of

market conduct and performance.2. Degree of product differentiationWhether or not the pdts are homogeneous

affects the market structure.

3. Conditions for entry of firms in the marketRestriction on the entry of firms in the market

C td


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Contd..4. Flow of Market information

5. Degree of integrationThe b/hr of an integrated mkt will be d/t from

that of a market where there is no or less

integration either among the firms or oftheir activities

Dynamics of market structure


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Dynamics of market structure-

Conduct and performance

The market structure determine themarket conduct and performance.

The term market conduct refers to the

patterns of B/hr of firms, specifically inrelation to pricing and their practices

Specifically, market conduct include:

1.

Market sharing and price setting polices2. Policy aimed at coercing rivals; &

3. Policies towards setting the quality ofproducts


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The tem market performance refers to the

economic results that flow from the industry

as each firm pursues its particular line of

conduct.

Some of the criteria for measuring market

performance and of the efficiency of themarket structure are:

1. Efficiency in the use of resources, including

real cost of performing various functions2. The existence of monopoly or monopoly

profit, including the r/n s/p of margins with

the average cost of performing various


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3.Dynamic progressiveness of the system

in adjusting the size and number of firmsin r/n to the volume of business, in

adopting technological innovations and

finding/or inventing new forms of

products so as to maximize general

social welfare.

4. Whether or not the system aggravates

the problem of inequalities in inter-personal, inter-regional, or inter-group

incomes


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The market structure, therefore, has

always to keep on adjusting the changingenvironment if it has to satisfy the social

goals.

A static market structure soon becomes

obsolete b/c of the changes in the

physical, economic, institutional and

technological factors

For a satisfactory market performance, the

market structure should keep pace with

the following changes:


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i) Production pattern

Significant changes occur in the productionpattern b/c of technological, economical and

institutional factors. The market structure

should be re-oriented to keep pace with suchchanges

ii) Demand pattern

The demand for various products in terms ofform and quality changes because of change

in income, changes in their tastes and

habits. The market structure should be re-


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iii) Costs and patterns of marketing

functionsMarketing functions such as

transportation, storage, financing and

dissemination of market info. have a

great bearing on the type of market

structure. Govt policies with regard to

purchases, sales and subsidies affect

the performance of market functions.

The market structure should keep on

adjusting to the changes of in costs and

govt plicy.


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iv) Technological change in industryTechnological changes necessitate

changes in the market structure

through adjustment in the scale ofbusiness, the number of firms, and in

their financial requirements.

2 5 M k t f


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2.5 Market forces

The forces which affect the process of price

determination, either directly or indirectly,

may be termed as market forces.

The forces may be tangible, like the quantity

of arrivals at a particular pt of time in themarket or

They may be intangible, like the

announcement of a particulargovt policyAll these forces affect price determination by

affecting either the DD behavior of buyers or

the supply behavior of sellers


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1. Demand

It refers to the quantity of aproduct/services w/c the buyers are likely

to purchase at different prices in a given

market at a given time.

It must be understood the dd represents

the willingness and ability to buy under

specified condition.

The dd for a product may exist even if no

actual transaction takes place


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The law of dd formalizes the r/n s/p b/n

the quantity purchased and their prices. The law states that the price and

quantity demanded are inversely related,

other things remaining the same. The usual law of dd may be depicted

either through a demand schedule or a

demand curve.


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The following concepts of dd should be

understood thoroughly:a) Effective dd

It is the desire of the consumer for the

commodity backed up by his/herpurchasing power.

Therefore, the pertinent question in marketing

is: how much will be bought at aprice?And not : How much will be needed

or desired?


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b) Derived dd

The dd for farm inputs is a derived demand

c) Reservation dd and price

Reservation dd refers to the quantity of aproduct a seller would like to retain at a given

price. At each price, the seller himself has add to keep a certain quantity with himself forlater sale.

He may not like to sell a particular lot if the

price offered for it is lower than somepreconceived price, w/c is known as thereservation price.


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d) Dd function

The dd for a commodity is not affected byprice alone, whether one thinks of an

individual consumer or a group of

consumers

Factors such as income, tastes, habits,

weather, the prices of substitutes and

incentives for savings affect demand in

the sense that they shift the whole range

of price-quantity r/ns/p.


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A dd schedule is usually expressed as

Q= f(Pq), where;

Q= Quantity dded

Pq= price per unit of Q

The dd function for the same commodity isexpressed as

Q= f(Pq, Ps, P, Y, W), where;

Ps=price of substitute or complementarygoods

P= population or family size

Y=income


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Factors affecting aggregate dd for farmproducts

At macro or national level, aggregate ddfor farms products is determined by thesize of the population and per capitaincome.

Changes in tastes, processing technologyand income distribution affect theaggregate, as well as the composition of

the demand for farm products. The effect of an increase in population and

per capita incomes on the dd for food

grains may be expressed in simple terms


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D= P+eY, where;

D= rate of increase in aggregate dd for

foodgrains

P=rate of growth in population

e= income elasticity of dd for foodgrains

Y= rate of growth in per capita income


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2. Supply

It refers to schedule or quantities of aproduct that will be offered for sale atdifferent prices at a given time and in agiven market.

There is a logical r/ns/p b/n SS andprice. The higher the price, the larger thequantity that is offered for sale, and viceversa. Thus,

Supply indicates a r/n s/p b/n thequantity and price of a commodity fromsellers viewpoint.


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Factors Affecting supply of farm products

There are two main sources of SS of farmproducts at national level such as theproduction on the farms and import fromother countries

The factor which affect the domesticproduction of farm products are weather,technology, irrigation facilities, landsuitable for cultivation, acreage undervarious crops, availability of inputs andrelative inter-crop and input output price.


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Simple market model and price determination

The simplest of the simple market models isone where it is assumed that the quantity

DDed and Ssed are affected only by the

price of the commodity.

The price and quantity w/c satisfies both the

buyer(s) and seller(s) are called the

equilibrium price and equilibrium quantity.


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The simplified market model may be

expressed in three equations:

Demand Qd=f(Pq)

Supply Qs=f(Pq)

Equilibrium conditions Qd=QsAssuming a linear and exact DD and SS

r/n s/p, the hypothetical market model may

be written as follows:

Qd=a+bP b0

3. MARKETING FUNCTION


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3. MARKETING FUNCTION

3.1 Meaning and classification ofmarketing function

3.2 Assembling, Grading and

standardization3.3 Packaging and labeling and

transportation

3.4 Storage and warehousing3.5 Market information

L i Obj ti


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Learning Objectives

At the end of this chapter students willbe able to:

Identify the meaning and classification

of marketing function.Discuss the marketing function.

3.1 meaning and Classification of


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3.1 meaning and Classification of

marketing function

The marketing of farm product is acomplex process. It includes all the

functions involved in the movement of

the product from the farmers(producers to the consumers.

M i f k ti f ti


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Meaning of marketing function

Any activity performed in carrying aproduct from the point of its productionto the ultimate consumer.

Agricultural marketing functions aremany and varied. The marketingfunction involved in the movement ofgoods from the producers to its ultimate

consumer vary from commodity tocommodity, market to market, the levelof economic development of the countryor region and the final form of the

consumption.

Classification of marketing


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Classification of marketing

function

The functions of Agricultural marketing canbe classified into three broad categories.1. Exchange function Buying and selling

2. Physical function Storage and warehousing Grading, processing, transportation3. Facilitative function Standardization of grades Financing , risk taking Dissemination of market information

1 E h f ti


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1. Exchange functions

These mainly include functions relatedto buying and selling

Buying and selling are complementary

to each other Buying function is largely one of

seeking the sources of supply,

assembling of products and activitiesassociated to with the purchasing of

goods, raw materials etc.


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Selling is the process w/c stimulate ddor desire, finds the buyers, advises the

buyer, and negotiates with him/her to

bring about a transfer of title.

2 Ph i l f ti


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2. Physical functions

These functions relate to the physicalhandling of agricultural product either

in moving it from one place to another

or in storing it over a period of time.

3 Facilitati e f nctions


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3. Facilitative functions These involve neither transfer of title to

goods nor handling of the product but helpin the smooth discharge of the above

functions.

i) The function of classification andgrading helps to classify and sort out of

commodities according to size, quality,

colour, weight etc. This makes determination of price easy

and thereby assumes of fair to the

producer as well as good quality product


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ii) further, the growing vastness b/n theplace of production and place of

consumption has made the function of

market information invaluable. This function involves activities of

collecting , interpreting and

disseminating market news to various

agencies including producers


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iii ) lastly, no business can be donewithout undertaking the inherent risk w/c

may be caused either due to a decline in

price, bad debts or deterioration ofproduct itself by fire, flood etc.

This risks have to be borne by some one

in the channel.

1 Assembling


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1. Assembling

Agricultural product is collected insmall lots and then assembled into

large ones. This function becomes

essential b/c of small size of farmsand small quantity production.

2. Grading and


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g

standardization When goods are assembled, grading and

standardization have to be undertaken. Products are graded according to quality

specifications.

Standardization means the determination ofthe standards to be established for different

commodities

Standardization defined as the

determination of the basic limit on grades or

the establishment of model processes and

methods of producing, handling and selling

goods and services

Standards are established on the basis


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Standards are established on the basis

of certain Cxs such as

weight, size, color, appearance, texture,moisture content , ripeness, sweetness,

taste, chemical content etc

These cxs, on the basis of w/c productsare standardized are termed as grade

standards

Thus, standardization means making thequality specifications of the grades

uniform among buyers and sellers over

space and over time.


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Grading means the sorting of theunlike lots of the product into d/t lots

according to the quality specifications

laid downIt 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 grade


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Types of gradeThere are four types of grading

1. Fixed grading/mandatory grading This means sorting out of goods

according to the size, quality and other

cxs w/c are of fixed standards This do not vary over time and space

It is obligatory for a person to follow if

some one wants to sell gradedproducts

It is compulsory to grade the product

according to these grade specification

Individuals are not free to change these


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Individuals are not free to change these

standards

This is compulsory for the export of theagricultural commodity.

2. Permissive /variable grading

The grade specifications in this case arefixed over time and over space, but

changed every year according to the

quality of the product in that year Under this method, individual choice for

grading is permitted.

3 C t li d /d t li d di


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3. Centralized /decentralized grading

Based on the degree of supervision

exercised by the government agencies on

grading of various farm products, the

voluntary grading for internal trade can be

categorized in to centralized anddecentralized grading.

4. Grading at producers level

Under this programme, free grading servicesare provided to the farmers for sorting the

product before sale.

This, in turn, enables them to realize prices

Inspection and quality control


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p q y To ensure the confidence of

consumers, it is essential that gradingis done in accordance with thestandards that have been set.

For this purpose, the inspection of the

goods at regular intervals by thirdparty is essential.

Inspection involves the testing of the

graded goods with a view todetermining whether they conform tothe prescribed standards. It ensuresquality control.


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For the purpose of inspection,samples of the product are drawn at

various stages of the down stream of

the supply chain and are tested in thelaboratory

Regular inspection creates confidence

among the buyers. Producers, too,

know that there is someone who

checks the standards of the pdt

graded by them.


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Documents

Agricultural and Livestock Marketing