Research On The Function Of Agriculture Produce Qulity Grading During Modernization

Agriculture produce quality grading refers to the sorting of unlike lots of products into uniform categories according quality standards. As one of the most important resposibilties of government in developed courtries where agriculture has been modernized, agriculture produce quality grading has become the necessary tool to promote the efficiency of market for agriculture produce.In order to push agriculture modernization forward and raise farmers'income quickly, Chinese government began to realize the importance of agriculture produce quality grading and tried to strengthen the grading of agriculture product by a lot of new policies and measures in the 21st century. There still are some problems including the vagueness of grading target,the delay of standard modification and low accecptance by the market, which contribute to the low efficiency of grading. The crucial reason is that during the standardization of agriculture, the government and market participants know little about the function of agriculture produce quality grading during agriculture modernization.Agriculture modernization can not be realized without an efficient produce market. As the base of market, the function of agriculture produce quality grading during agriculture modernization is that grading not only and improve the trade and consumption of agriculture produce by overcoming the shortcomings restricting agriculture products from being really commodities in the market, but also help the farmer to optimize input allocation, use new technology and promote quality by grades price. Through the research on the function of grading by the perspective of agriculture modernization, the decision of grading target,design of grading standard and providing of grading service will be more reasonable, and then Chinese Agriculture produce quality grading can be accerlated.Focusing on the function of agriculture produce quality grading during agriculture modernization and using economic theory, the research emphasizes on how the quality grading adds consumer welfare, reduces agriculture produce transaction costs, and then raises market efficiency, improves agriculture teconology innovation. At the same time, by case study of wheat, apple and crude milk, the research analyzes the economic impact of grading, the conditions for the use of grading, and the design of grade standard. The main content and conclusions of the research are as following. Chapter 3 has a research about how the quality grading meets the diversified quality demand of market. Consumers have paid more attention to agriculture product quality than quantity as people's income rises. If and only if the quality grade is designed according to consumers'preference difference, agriculture product quality grading can improve consumers'welfare and the relationship between prices and grades can been established. The number of grade and attributes which should be graded depends on consumers'quality valuation. A feasible means for grade design of agriculture produce which are taken on as raw material by the firm has been provided.Case study of wheat grading show that wheat is sorted according to the flour factory's processing requirement, which reflects the consumers'needs eventually. The international experience tells us that wheat grading has changed from focusing on facilitating trade to being oriented by reflecting wheat's end use as well as Chinese wheat grading history does. We suggest that Chinese wheat grading should be based on our planting and consumption situation, and should be optimized in the direction of satisfying the flour factory's processing requirement.However, whether grading leads wheat planting is restricted by grade prices, grading cost and farm unit .Chapter 4 analyzes how the quality grading improves market effenciency. Agriculture produce quality grading contributes to economies of scale by reducing numbers of variation of agriculture produce and lowers transaction cost by providing a standard language for agriculture produce mrket. The origins about lowering transaction cost are based on two aspects: firstly reducing consumers'uncertainty of decision; secondly, reducing producers'uncertainty of decision. And then uniform grading cuts down market participants'information search cost. In order to reduce transaction cost, grade design should comply with the trade tradition, keep compatibility and stability, and emphasise on appearance standard such as size, weight, color and so on.Case study of apple grading shows that, although grading apples according appearance may meet some difference of consumers'preference, it is more meaningful for grading to facilitate the apple market channel, including purchase, package, transportation, storage and so on. Chinese apple grading has play a role in reducing apple variety and lowering transaction cost, but the connection with planting suituation and the relevant services should be strengthened.Chapter 5 speicifies the function of quality grading about the promotion of market efficiency and the condition under which quality grading can improve agriculture technology advancement. Quality grading make the market more efficient because grading can adjust the structure of supply and demand, facilitate market equilibrium, and lower marketing cost. The auction of agriculture produce in the wholesale market in Taiwan province shows that quality grading plays a fundamental role in the market development. Then not only consumers are able to buy what they want, but also producers can provide what the market need by adjusting their production function. The promotion of market efficiency makes possible that the farmer optimize input allocation and provide the market with what the market needs most. During the process of agriculture technology advancement, whether the farmer's income rise or not is a crucial condition. The farmer's income depends on grade prices, grading cost and the capability the farmer use new technology.The conclusion of empirical analysis of crude milk procurement data of one dairy firm's data of is as following. Firstly, pricing by grades can promote the quality of crude milk. Secondly, because of technology advantage, the large scale farmer's crude milk is better than the middle and small scale farmer and can acquire higer price.Chapter 6 gives some advice about the role which government should play during the agriculture produce grading in China. Both theory and practice shows that it is nessary for government to provide the relative service about quality grading, especially in a developing country. We suggest that the government focus on three fields: grading standard issuing and supervising, relevant grading service providing, and grading research arrangement. The government should first specify the stage taget of quality grading for different kind of agriculture produce, and then encourage all the relative market participants to take part in quality grading, and evaluate the cost and benefit, and trade off different stakeholders'interest carefully, case by case.