Instrument

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Instrument

Binding commercial categories and quality standards

Description

Introducing binding commercial categories enables certain agricultural products to be standardised in accordance with certain properties (e.g. size, moisture content, smell / taste, amount, length, gradings, etc.). In addition, marketing standards lay down presentation and labelling criteria. Standards ensure transparency and certainty in respect of product properties throughout the entire supply chain from farm to consumer and provide greater financial incentives for agricultural producers to improve the quality of their products (consumer protection). Standards my also increase producer prices by differentiating payments according to generally applicable, comparable criteria and facilitate international trade and promote exports. If commercial categories and quality standards are not binding, value chain actors may also agree on voluntary categories and standards.

Unlike in industrialised countries, in which almost all agricultural products must meet certain quality standards, the bulk of products marketed in developing countries and some emerging economies are not (yet) subject to commercial categories and marketing standards. There is often little incentive to increase product quality for consumer protection purposes, e.g. by using fewer pesticides or reducing aflatoxins by storing goods properly post-harvest, since higher quality products do not usually attract a price premium on local markets.

In developing countries, introducing binding commercial categories and marketing standards depends on the availability of local resources and is usually only done for goods produced for export. Establishing such a system and checking that locally marketed goods comply with it is extremely complex and requires the authorities or private organisations responsible to earmark considerable institutional and technical resources. Due to the lack of access to inputs and education, many farmers are unable to meet the complex requirements of such systems. This must always be borne in mind when considering introducing these systems.

Requirements

  • A properly functioning country-wide administration and monitoring system with access to the relevant information and sufficient technical and human capacities for its design, implementation and monitoring
  • Binding market system (commercial category regulations) that makes compliance compulsory for all agri-food businesses in the supply chain
  • Close cooperation and knowledge sharing with farmers' organisations
  • Close cooperation and knowledge sharing with local advisory services
  • Close cooperation and knowledge sharing with research institutions
  • Jurisdiction or arbitration body with locally recognised authorities
  • Quality management systems
  • Regular neutral inspections on farms and in agri-food enterprises
  • Sanction mechanisms
  • Regular staff instruction
  • Training opportunities for independent inspectors and users

Possible Negative Effects

  • Spoilage of non-compliant agricultural products
  • Increased costs in interregional trade with differing commercial categories and marketing standards
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This page was last edited on 24 October 2019 | 9:42 (CEST)
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