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Standardization and Grading

Standardization and Grading

Discuss Standardization and Grading within the Production Management ( Prod Mgmt) forums, part of the Resolve Your Query - Get Help and discuss Projects category; STANDARDIZATION AND GRADING Grading and standardization is well understood and practiced at all India level for engineering and consumer goods. ...

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Sunanda K. Chavan
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Standardization and Grading - September 7th, 2010

STANDARDIZATION AND GRADING



Grading and standardization is well understood and practiced at all India level for engineering and consumer goods. It is yet to become popular for rural producer.

Efforts are made by standard organization to popularize the standards. Agmark is one of the important step in popularizing quality moment by gradation.

There are many advantages of grading. The important one is to obtain fair price to producer and justice to the consumer.

Agmark “grades give full specifications of products for various commodities. These are yet to become with farmers and consumers.

Bureau of Indian Standards, ISO, also have develop the grades and standards for agro produce which are to be made popular.

Both producer and consumer awareness to grades need to improve a lot, media of TV, newspapers to be used to give to give publicity. At the same time awareness regarding misuse of labels is to be created.

The role of Agriculture Universities, Co-operative moment, Village Panchayat is very important in spreading awareness information and knowledge regarding grades and standards for commonly used agricultural produce.

STANDARDIZATION

Standardization is the process of fixing certain norms for the product. These norms are established by customs or tradition or by certain authority. It involves determination of basic characteristic of a product on the basis of which the product can be divided into various groups. It also means determining the standard of product to be produced with regard to size, color, form, weight, shape and quality. Standards are model products which form the basis of comparison.
Without standardization the rule of caveat (law) prevails and there may be confusion and unfairness. The term of standardization is used in a broader sense. Standardization is a application of standard to goods meant for marketing with a view to further sub dividing them into several grades or classes. Thus standardization means making the quality specification of the grade uniform among buyers and sellers over space and time.
According to National Commission on Agriculture standardization is defined as, “the determination of basic limits or grades in the form of specification to which manufactured goods must conform and a class into which the product of agriculture and the extra active industries may be sorted is known as standardization.”


Basis of standardization:

Agricultural goods are standardized on the basis of different factors, based on which they are classified into different grades. The following are some of the factors on the basis of which standards are set:
1) On the basis of quantity, weight and measures.
2) On the basis of size and shape.
3) On the basis of color such as apples.
4) On the basis of quality such as foodgrains and cotton.


Standardization in Material Management:

A standard is defined as a model or a general agreement of a rule established by authority, or custom, created and used by various level of interest. For instance, an individual may be the starting point of using standard and then his department will use the same standard to suite its needs. The standard could cover a variety of industries such as engineering, textile, chemicals, pharmaceuticals, agricultural as also education. The topics covered under standards can include purchase contracts, forms, sampling, testing, safety measures, etc.

We are aware of use of standards for specifying the items, specially for purchase purpose. Market grades, commercial standards, performance specifications are the popular examples of wide range application of standardization. With standardization more then one manufacturer can supply and this will be implied better availability, better price and better delivery. Standardization also implies regular available to reduce purchase efforts, less stock and less obsolete items. It also means less inspections efforts as a matter of fact many organization do not check routine items bearing ISI marks in very detail manner but resort to inspection of only a small fractions of items. It is also possible to enter into rate/running contract with standard item.

Process of standardization leading to Variety Reductions:

The process of standardization leads to simplification of variety reductions. These implies reduction necessary varieties and standardizing to be most economically sizes, grades, shape, colors, types of parts and so on. The process of standardization and variety reductions as follows:

1) Prepare the list of all the items use to make the final product. The list can be made out of the design blue print in case the product design is just over but production has not started, or from the actual record of consumption incase the product is in production.

2) Classify the items according to their performance and dimensional characteristics.

3) Group the items with similar functional characteristics and then subgroup according to major dimensional values. For example all bushes around 5 cm dia. Will be in one group. While all around 3 cm dia will be in other group and so on.

4) For a group of items with similar functional characteristics, study the dimensional features. In case of large number of items, several items with the same and similar functional requirements are likely to show the dimension clustered in much closed vicinity. If the performance characteristics are within satisfactory zone, these items are produce of the same dimensions. This a very important step in variety reduction.

5) If performance is acceptable, the items has been standardized according to the National or International standards. If the performance is not satisfactory, organization will adapt a local standard, the dimensions being of the representative value.

ADVANTAGES OF STANDARDIZATION:

1. Uniformity in quality:

With standardized goods, there is homogeneity and consistency in quality. Hence, a consumer can buy a product without much hesitation and risk as the quality of product will not change over a period of time, thus leading to better goodwill.

2. Differential pricing :

When goods are standardized and classified into various types, one can used differential pricing for different grades of the product. Thus assuring better return to both buyer as well as seller. E.g. Dettol and savlon

3. Increased in demand:
As there is uniformity in size, form, quality and utility of all products of an enterprise, the customers rely on these products. Sale of standardized goods increases.

4. Elimination of risk:
The standards of products are determined keeping in mind the habits, tastes and nature of consumers and the risk of selling standards goods is reduced.

5. Expanding the market :

There is large-scale production of standard goods which results in many types of saving in production , distribution , advertising and sales promotion because of these the manufacturer is in a position to produce best quality goods at minimum cost thus attracting a number of customer.

6. Availability of finance :
Finance can be obtained easily for standard goods as financial institution prefer giving finance to those enterprises who deal in standard goods.

7. No need for inspection:

There is no need for inspecting the quality of a product as the form of size, quality and utility of all the products in a lot are uniform in all respects and the consumers are convinced with it.

8. Standardization helps to reduce inventory items
9. It helps in evolving better means of communications about an item in the company.
10. It forms a base for the inventory analysis.
11. The specifications of items can be more clearly spelt out, making quality control.
12. In a developing economy like ours, where the need is to promote exports insistence on standards helps in creating confidence in the international market.
13. By using National standards, it is easier to locate sources of supplies and in the case of machine parts; the placements can be obtained easily. It could also be used in advertising the products as well as spare parts.

GRADING:

Grading means sorting of unlike lots of produce into different lots according to quality specification laid down. Each lots has substantially the same characteristics as far as quality is concerned. Grading is an important function of standardization. It implies the division of products into classes made up of unit possessing similar characteristics of size and quality. Grading is mostly done in case of raw materials, mineral products and agricultural products. There is no need to divided industrial product as they are produced according to pre- determined standards. There may be difference in quality or size or shape or characteristics of the products. The grade standards for commodities are laid down first and than the commodities are sorted out according to accepted standards. Grading helps the producer to get proper prices for these products because different price may be fixed for different lots.

Grading is categorizing the produce into different lots, each containing similar characteristics. The characteristics could be one or more of the following type:

Size – Big, medium, small, long, short, roundish, oblong etc.
Flavour – which in turn speaks of taste or class

Ripeness – raw, semi-ripe, ripe in case of fruits, oilseeds, pulses and cereals.

Length of staple – in case of cotton and jute.

Location oriented – like Goa Alfanso, Bydagi chillies, Baiganpalli mango, and Nagpur orange

Nasik grapes – having specific tastes, shape, colour etc.

PURPOSE OF GRADING

• It is a means to describe the quality of produce for sale/purchase activity
• It protects consumers from unfair trade practices by traders or farmers and also enables farmers to get price as per quality and grade
• It works as a basis for fixing price and premium price as per quality


GRADING SYSTEM


ADVANTAGES AND IMPORTANCE OF GRADING:

Grading in general is helpful to all the stockholders in agro-related activities: the farmers, traders, co-operative and the ultimate consumers. The advantages of grading are:

1. Production of Large Scale:

Goods are produced on a large scale, as grading of goods helps in increasing its demand. It becomes easy for a producer to produce these goods on a large scale as goods are graded.

2. Increase in Sales:
Customers do not bother to enquire about the goods graded, as they are very easy to be sold. Therefore, marketing of graded goods becomes easy.

3. Quality Certainty:
Certainty provides producers a reasonable price for their products and provides standard goods of uniform quality to customers at reasonable prices. It helps the producers as well as the buyers.

4. Helpful In Financial Management:
For the financial management of the enterprise graded products are very helpful. These products can be used easily, as security loans can be arranged as security of these products.

5. Helpful in Future Contracts:
Supply contracts may be entered into future for graded products as the identification of graded products become easy and different types of products are divided into different groups.

6. It makes price more reasonable to grades and there will be difference in price as per quality.

7. Simplification of storage and marketing of different grades.

8. Loans can be given based on stored goods as per the grade and’

9. Easier to understand quality available for each grade in case of bulk sale.

10. Based on grades, quality and quantity, it is easy to estimate value for loans against stock.

11. Price comparison by consumers is easy to due to grade identity. The buyer expects least or no risk in his purchases.

12. Grading helps to create perfect competition in the market as it will set a good standard of equivalent grades and materials competition.

13. Overall marketing cost can be reduced as repeat evaluation, spot separation (grading) and doubts in the mind on consumers are avoided.


TYPES OF GRADING:

Grading may be done on the basis of fixed standards or variable standards. It is of three types:

1. Fixed or mandatory grading:

Under this the goods are sorted out according to the size, quality and other characteristics which are of fixed standards. These do not vary over time and space. It is mandatory for a person to follow these grade standards if he intends to sell graded products.

The Agriculture Marketing Advisor Government of India has fixed grade standards for a number of agricultural commodities and it is compulsory to grade the produce according to these grade specifications. The use of mandatory standards is compulsory for export of the agricultural commodities to various countries.

For many of the agricultural produce, certain grades and standards are fixed by Agricultural Marketing Advisor, Government of India. This is done for having and maintaining high standard and clarity of quality in case of exports of agro-produce. Farmers are not free to use their own standards and classifications in case of exports. The Government of India has made standards based on size, quality and other characteristics which are fixed standards hence mandatory for exporters.



2. Permissive or variable grading:

Under this the goods are graded according to the standards which vary over a period of time. The grading specifications are fixed in over time and space in this case but changed every year according to the quality of the produce in that particular year. In India grading by this method is not permissible.


3. Centralized/decentralized grading:

Under the centralized grading system an authorized packer either sets up for his own laboratory manned by qualified chemists or seeks access to an approved grading laboratory set up for the purpose by state authorities or co-operative association or private agencies. Grading in respect of commodities such as ghee, butter and vegetable oil where elaborate testing facilities are required for checking the purity as assessing the quality has been placed under the centralized system.

The directorate of Marketing and Inspection exercise close supervision on grading work of the approved chemist by way of periodical inspection of grading stations and the quality of graded produce. Under this system, the state marketing authorities under the overall supervision and guidance of the directorate of marketing and inspection implement the decentralized grading system. This system is followed in those commodities which do not have elaborate testing arrangements for assessing the quality.


Eg. Vegetables, fruits, eggs, pulses and cereals, the grades for these produce are determined on the basis of physical characteristics. Both these grading programmes are consumer oriented. In addition to these programmes, the state marketing authorities also implement a grading level. Free grading services are provided to farmers for sorting the produce.

4. Grading at producers level:

Under this programme, free grading services are provided too the farmers for sorting the produce before offering for sale. This enables them to realize prices commensurate with the quality of produce. Several regulated markets and warehouses are manned with grading personnel with the central assistance.

Farmers on their own also do grading, which is actually categorizing as per their own thinking. They do not have an idea of standards and grades as per DMI. Farmers do only from the point of view of getting fair rates to their produce. Marketing agents also develop some expertise in gradation of agricultural produce and their opinion is given importance in price fixing and negotiations.


EXAMPLES OF GRADING

Easiest way is to do grading at the farm level. Immediately after harvest, the farmers must go for grading which is generally based on size, color and variety. This will help them to get better rates and fair returns as per quality. Simple gradation of size viz., watermelons big, medium and small, betel leaves big and small, bananas variety wise, orange size wise, potatoes size wise, rice size, broken pearl like brownish etc. At rural places, the labour charges will be economical and gradation done at that stage makes further processing and marketing easier.

It is seen in the market that the same variety of mangoes but big in size is sold at Rs.20 per kg whereas small size is sold at Rs.15 per kg. The taste is the same. The difference is in bigger mangoes where the eatable portion is more compared to smaller ones and the seed size will be same. This gives a simple example of direct advantages of grading.

Once grading is done and exhibited in term of size, color and freshness, no more explanation is required as visual observation of the consumer is adequate.

Problems in Standardization & Grading:

The techniques of standardization and grading have not been developed fully in India. There are various problems in their way. Some are as follows:


1. Lack of Standards & Grades:
One difficulty in the development of standardization and grading is that for many products standards have not been developed.

2. Misuse of Standards & Grades:

It is seen that many producers use standards and grades in an authorized manner. There is lack of feeling of responsibility and national character among our producers and it is a big hindrance in the development of standardization and grading


3. Lack of Public Consciousness:

Lack of public consciousness is the problem in the way of development of standardization and grading in our country. The reasons for lack of public consciousness are (i) low standard of living, (ii) Illiteracy, (iii) Dominance of rural population.

4. Lack of Testing Facilities:

This is also a great problem in development of standardization and grading. Manufacturers feel the difficulty if getting these standards and grades to be tested.

5. Lack of Facilities:

There is lack of proper facilities for standardization and grading. Many industrial enterprises and manufacturers do not like to indulge themselves because of this reason.

The grading of agriculture produce has not made much progress in our country for the following reasons
1. Some the agricultural products are perishable and even graded products, by the time they reach the consumers, deteriorate in quality resulting in customer complaints

2. Grading agriculture products is more difficult since the producer has to examine each and every product for grading.

3. The producer does not get higher prices for graded products since the consumers are not very quality conscious in most of the markets.

4. Common man does not understand the grading system.

5. Grades such as, C,D makes a negative impression with consumers although the difference may be only marginal.

6. Consumer preferences vary and based on number of factors and are therefore very difficult to meet their individual requirements.


Suggestions for making grading & standardizing popular

1. Grading & standardization have to cover all types of agricultural commodities and be made compulsory for trading in agricultural commodities at all levels.
2. Samples of graded product should be exhibited in all markets for the benefits of traders & consumers.
3. Create awareness about the benefit of using AGMARK products among consumers.
4. Highlight the benefit of selling graded products to the producers.


AGMARK


AGMARK is the acronym for agricultural marketing.It is a quality certification mark under central agricultural produced (Grading & Marketing) ACT, 1937. AGMARK is done for commodities of internal consumption like ghee, vegetable oil butter, etc.

The AGMARK label indicates the products meet curtain standards of purity and quality. Labels of different colors are used to indicate the grade of the products. Strict procedures are followed and rules are laid down to ensure conformity to the standards set as per the grade given. Quality check and tests are done to maintain standards. With the help of such grades and standards, products produce can be sold through the right channel and the right prices. Also, the consumers are ensured value for money and can comfortably by a product without fear.


PRODUCER’S PROBLEMS IN GRADING:

Farmers in India are either illiterates or literates to the extent of reading newspapers. Asking them to do high quality work is difficult task. Some of the feelings and constraints in grading at the producers stage are as follows:
• The agricultural produce is perishables and some are fast perishables. Hence there is very little the producers can do about perishables like milk, butter, ghee, fruits and vegetables.
• Producers, especially small and marginal farmers need money and they cant delay the goods sale for grading work etc.
• To get uniformity of production in vast area is partly not in control of the farmers. Out of 20 acre land, the produce quality and size may vary from one end to another. The effect of water and manure varies from point to point.
• There could be side effects of pesticides in some portion of the crop area. Hence to get standard produce is not always workable.
• It is felt that in case of grains, grading is not required as the buyer of grains goes by feel and rates. Perhaps grading is required only for exports.
• The expectations, cooking methods, spices type, etc. change from region to region and hence to make uniform grades is difficult.

Efforts To Popularize Grading:

The NAC (National Commission Of Agriculture) was consulted to give suggestions to improve the grading work by popularizing it.
• There should be adequate training for graders and people with agricultural knowledge should be encouraged to become qualified graders. Only this way there is a possibility of making the grading system more efficient.
• All agro and rural commodities should be covered for grading. Standards of grades should be formed wherever the same are not available.
• Now grading is compulsory for exports NAC has suggested to make grading and standardization compulsory for local sales also for all agricultural commodities.
• There should be only one agency to formulate grades and standards. This will create uniformity.
• As model examples, the samples of graded materials should be kept for display in important markets for easy understanding of the grades.
• The authority of the Central Government Agency (DMI) and state marketing federations should be made very clear, avoiding duplication.

CONSUMER’S PERCETION TO GRADING
:
Consumers incase of agricultural products are full population of the country. Food is the basic requirement and rural produce like grains, fruits, vegetable, milk and milk products etc. are all food items. Before giving details about perception, the consumers can be categorized as follows:


• Consumers in category 1 and 2 are aware of grades, standards, can read labels and slips and be choosy. This category appreciates the gradation and pays accordingly. They mostly belong to rich and/or salaried category.

• Consumers in category 3 and 4 are either not aware or not bothered about grades and standards of food products and agro-products. Normally this category people are poor and very poor and majority of India’s population is in this category. Hence, ‘AGMARK’ grade is not known to majority of the population. It is very difficult for them to understand the grades nor are they interested.

• Consumer confidence in grade is not high as most of these produce are perishable with time. Also few traders indulge in unfair practices, thus creating doubt in the consumer’s mind about genuinity of grades.

• Wherever expiry date is put on the label, the items should be taken out of the shelf once the expiry time is reached much after expiry date, resulting in loss of customer loyalty.

• In busy shops, customers do not have time to read labels. Also grades are A, B, C, D or I, II, III, and IV. A customer is not aware of the difference in these categories. A new method needs to be developed to infuse confidence.

• The control measures are not adequate for misuse of labels.
Indian Standard Institute (ISI):
ISI came into existence in 1940 as the consequence of industrial conference held at that time. In January 1947 government of India established Indian Standards Institute under industrial development plan. Institutional head office is in Delhi.

Structure of the organization:

ISI is managed by the Board. The ex-officio chairmen is the Industrial Development Minister of Union of India, central government, state government, education and research institution testing laboratories different industries and developmental boards are its representatives. There are five departments of ISI:
(1)Engineering, (2) Construction, (3) Economics, (4) Weaving and (5) Agriculture.

Functions of ISI:

1. Giving suggestions in respect of the product
2. Conducting necessary researches and experiments in field of standardization
3. Determining standards of different products at National and International Level
4. Suggesting in request of products
5. Making the standards popular
6. Checking new products and determining the standard mark for them
7. Developing a feeling of competition for the purpose of promoting the production of high quality goods.
8. Collecting necessary data.


Indian Standards Institution Act, 1952:

ISI ACT was passed in1952. This ACT gave power to the institute to the test the quality and characteristics of agriculture product and mark them with “AGMARK”. It also gave power to the producers of quality product to use mark ‘959’.

Progress of ISI:

ISI established its own network of testing its laboratories at Delhi (Sahibabad), Mumbai, Kolkata, Chennai, Chandigarh and Patna. This institution also gives training to the engineers. Government of India has launched a scheme of compulsory quality control for export promotion. In this scheme all products which are to be exported must be quality prescribed by the institution. ISI has established liaison with national standard bodies of other countries both their technical work and in their policy planning and its associated with International Standard Organization (ISO) and International Electro Technical Commission (IEC). ISI is playing a very important role in protecting the interest of consumer.

USE OF UNIFORM STANDARD

One of the main defects of unregulated market is the use of non-standard and arbitrary weight by arhatiyas and brokers. This was used to cheat the farmers. Lack of uniform standardsin weights, will containing to keep marketing in unsatisfactory condition.

In 1939, the standard weights was passed under which the state government promoted the use of standard weight. But not the much head way could be made in this situation for different standard weights were used by different state. Later on in order to bring about uniformity in weight, the government encoded legislation and adopted the matric system of measures, in 1958.

Since 1962 the use of metric weight has been made compulsory. Inspite of this, one still finds old measures still existing in some villages.

LEGISLATIVE MEASURES FOR IMPROVING AGRICULTURAL MARKETING:

The following ACT was enacted by the government to improve agriculture marketing in the country.

Grading of Commodities:

A) Agricultural commodities: The agriculture produces grading and making act 1937. This act provides for grading and marking of agriculture commodities. The act authorizes the central government to frame rules relating to fixing of grades standards and the procedure to be adopted for grading the agriculture commodities included in the schedule. This act was amended in 1986. The amended act seeks to review the provisions of the act strengthen the same with a view to promoting and protecting the interest of the consumer and makes the penal provisions of the act more deterrent.

b) For manufactured commodities: The Indian Standards Institutions (Certification Marks) Act, 1952
Manufacture products are graded in accordance with the standards laid down by the Indian Standards Institutions established under the act and graded products bear the ISI label. The name of the Indian Standards Institution has been changed to Bureau of Indian Standards (BIS) under the Bureau of Indian Standards Act 1986. The scope of the activity has been enlarged with greater trust to consumer protection improving the quality of Indian products and providing of larger networks of testing and consultancy sevices.

Recommendations of National Commission On Agriculture:

The NCA had the made the following suggestion to make grading and standardization popular in the country:
1) Grading and Standardization should be made compulsory for transactions in agriculture commodities at all levels for local Interstate and export trade.


2) Grading and standardization must cover all type of agricultural commodities viz, livestock and livestock products, crops including horticulture and plantation, fish and fish products, and minor forest products.

3) The grading system should be made efficient and full proof. For this trained and well qualified grades should be appointed.

4) Samples of graded commodities should be displayed in all the markets for verification by the graders and participating consumers.

5) Duplication and overlapping of functions linked with the formulation of grades standards of agricultural commodities should be abolished.

6) In order to avoid duplication the work should be distributed among the central and state government.
Other Provisions of Grade Standards and Quality Specification:

Apart from the agriculture product (Grading and Marketing) act, 1973, there are few other legal provisions which lay down standards for food products. Some of the important acts are:

1) The Bureau of Indian Standards (BIS). Under Indian Standards Institutions (Certification Mark) Act,1952.

2) The Prevention of Food Adulteration Act, 1954

3) The Fruit Products Order, 1956

4) Solvent extracted oil, de-oiled meal and edible oil (control) order 1967

5) The Meat food products order 1973

6) Vegetable oil products (standard of quality) order 1975.


Standardization and Grading play a very crucial role in the marketing of products in India. Indian agricultural products are going global and that means our products have to follow international standardization norms and grading pattern as it differ from nation to nation. For e.g.; the standardization norms in the European Union may differ from the US ones. Standardization and grading play a very important role in the year of 2005 as India takes on the challenges of global exports.

The grade standards should have common terminology and understood in the same manner at the all India level. Grade standards set must be easy to understand, explain and measure whatever they are measurable. The standards should have consistency so that frequent changes are not required.
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