the fresh produce sold at retail outlets. The type of marketing channel
selected by growers before planting influences farms’ resource alloca-
tion. The marketing chain for fresh produce is shorter than for processed
produce reflecting the perishability. Farms near major urban centers can
sell fresh produce through traditional channels or invite customers to
“pick-your-own” (PYO) enterprises thereby minimizing the length of the
marketing channel. PYO farms may revise the importance of quality at-
tributes. Results of a recently conducted survey of peach growers show
that commercial growers and pick-your-own operators emphasize dif-
ferent quality attributes of peaches (Florkowski et al., 1997). Commer-
cial growers-shippers stress size and firmness. Standards for grades used
in wholesale trade specify size as an attribute influencing classification,
while firmness facilitates shipping. Pick-your-own operators considered
color and maturity (the absence of firmness) as the primary quality at-
tribute. Clearly, both types of growers were responding to quality re-
quirements expressed to them by buyers. If the signals were correctly
transmitted, then quality attributes expected by consumers vary de-
pending on place of purchase, e.g., a supermarket vs. PYO farms. Poor
signal transmission can cause sluggish retail sales because consumers
cannot find peaches of expected quality. The examination of institutional
arrangements along the marketing chain can provide additional expla-
nation and lead to effective remedies.
Grades and Standards
Grades and standards improve marketing efficiency by reducing the
risk of miscommunication between sellers and buyers. Transaction costs
also decrease because the physical inspection of each shipment becomes
unnecessary. Wide application of standards for grades of homogeneous
products contrasts with the specialized nature of standards for quality
and grades in the fresh produce industry. Grades require uniformity of
characteristics such as size, color, or cultivar. Stone fruit or citrus fruit,
berries or melons, root vegetables or leafy vegetables may differ in their
attribute mix to the extent that a standard or a grade may only broadly
describe requirements and the condition required for fresh produce may
be product specific.
In the United States, the use of standards for grades is generally vol-
untary in fresh produce marketing. The initiative in the development of
grades or standards could determine the extent of control over the ulti-
mate set of standards applied in marketing channels. If quality charac-
Grades and Standards 229