Contract terms. Under the existing trade practices, the sale of produce in a primary market takes place on the basis of the visual inspection of the goods, and in the secondary and terminal markets on the inspection of the samples. Thereafter the buyer and the seller decide upon the terms either orally or through written contracts. The contract terms specify the quality and quantity of the produce, the time and place of delivery, the price and terms of payment, handling and incidental charges, the procedure for settlement of disputes and penalties. The terms of contract were not standardized and thus varied for every individual transaction, and were more favourable to the buyer.
With a view to improving trade practices, All-India standard contract terms have been drawn up for a number of commodities. In standard contract terms the defination of quality and allowances in respect of refraction, damaged goods have been specifically standardized. though the adoption of these standard contract terms by traders is voluntary they have to a large extent strengthened the position of the producer-seller and have improved the quality of the product marketed.
Standardisation and grading. In order to gain the confidence and establish a rational relationship between the quality of a produce and its price, it is necessary to devote some attention to the proper preparation sifting and sorting of a material according to certain attributes before it is taken to the market. This is sought to be achieved by grading the produce in conformity with certain accepted quality standards viz. shape, size, form, weight, and other physical and technical characteristics. The produce brought to the market is very often contaminated with dust, stones and other foreign matter added either deliberately or by accident. Sometimes the produce is immature or not properly dried or contains shrivelled grains or damaged and rotten material. Such a produce brings a lower price to the farmers. Care should be exercised while assembling the produce of different farmers so that the good material is not mixed with the inferior material brought in by some farmers.
The Govt. of India had recognized the need to introduce the standardization of agricultural produce which would enable the farmers to derive the benefits of grading in terms of fair practices according to the prescribed standards and enacted the Agricultural Produce Grading and Marking Act in 1937. The Act empowers the central govt to prescribe grade standards indicating the quality of articles included in the schedule and specify grade designation marks to represent particular grades or qualities. The Act provides for the grading amd marketing of agricultural produce. The grade standards prescribed under this act are based on both physical and chemical characteristics and are formulated after analysing representative samples of each commodity collected from different regions and different seasons. Besides the international standards and special requirements of overseas consumers are also taken into account while formulating these standards for the commodities which are exported. The grade standards are reviewed and amended from time to time in the light of the shift of the pattern of production and trade and changes in the consumer's preferences. The grades are designated as the 'Agmark' grades.
A central Agmark Laboratory at Nagpur with sixteen regional laboratories at Guntur, Madras, Bombay, Kanpur, Cochin, Rajkot, Calcutta, Sahidabad, Jamnagar, Bangalore, Patna, Tuticorin, Virudhunagar, Mangalore, Alleppey and Kozhikode are assisting to provide adequate laboratory facilities for fixing grade standards for new commodities, for revising old grade standards and for routine qualtiy control work.
Grade for export. Grading of agricultural produce under the A.P.(G and M) Act is voluntary. Exports of certain agricultural commodities have however been prohibited unless duly graded and marked in accordance with the grade standards laid down under the A.P. Act 1937. The power to so prohibit exports was derived under the provisions of the sea-customs act.
The Directorate of Marketing and Inspection under the Ministry of Agriculture exercises a three tier control on the quality of agricultural commodities that are graded under 'Agmark' before they are exported. This is done through inspection.
Grading for internal trade. Commodities such as cotton, ghee, butter, rice,wheat, atta, gur, eggs, arecanut, potatoes , fruits, bura, pulses, vegetable oils and ground spices are being presently graded under ;Agmark' on voluntary basis.
Grading at farmers level. The grading of agricultural commodities under 'Agmark' has been consumer oriented. Generally the grading was done at the level of the traders. At this stage the producer was not a direct beneficiary of the grading scheme. It was felt the need to introduce grading at the producers' level. Thus the Directorate of marketing and inspection introduced a scheme for setting up commercial grading units.
Grading of fruits and vegetable products. With a view to exercising quality control over fruits and vegetables the govt promulgated the Fruits Product Order under the essential Commodities Act. The preservatives and colors to be used are also clearly laid down. The order also stipulates the hygeinic and sanitary methods which must be adopted by the manufacturers. The licence for all this is issued by the executive Director, food and Nutrition board .
The total number of licensed factories was 1194. The total average production of fruits and vegetable products in the country during 1970 has been estimated as 156 thousand tonnes valued at Rs 32.66 crores. Some of the products are very popular in foreign markets and are a good source of foreign exchange. In 1970 alone fruit products worth Rs 2.92 crores were exported from India.
