CM TRAINING MANUALUpdated English

NATIONAL COLLATERAL MANAGEMENT SERVICES LIMITED

Collateral Management
Training Manual for Collateral Managers

August - 2013

CM Training Manual

All rights reserved. Unauthorized use, duplication, or distribution is strictly prohibited. No part of
the contents of this material may be reproduced or transmitted in any form or by any means
without the expressed written consent of National Collateral Management Services Limited.

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INDEX

Sr. No Name Page No

1.1 Unit 1 :Overview of NCML and CM Orientation
1.2
1.3 About National Collateral Management Services Limited 6
1.4
1.5 Services Offered by NCML 7
1.6
1.7 Organization Structure 8
1.8
Why NCML? 8
2.0
2.1 Major Clients in CM business 9
2.2
2.3 What is Collateral Management? 9
2.4
2.5 Core activities of Collateral Management 10
2.6
2.7 Department structure of CM division 10
2.8
Unit 2 :Scientific Warehousing: Storage & Preservation
2.9
2.10 Introduction 11
2.11 Benefits of Storage 11
2.12 What is Warehouse? 11
2.13 What is Warehouse Management? 11
2.14 What is Scientific Storage? 12
2.15 Benefits of Scientific Warehouse Management 12
2.16 Types of Warehouses in CM 13
2.17 Points to follow for selection of Warehouse 13
2.17 Points to follow before receiving commodities in the 14
2.18 warehouse
2.18 1 What is Dunnage? 15
2.18.2 Stack Plan & Stack Lines 16
2.18.3 Care to be taken while stacking the bags 18
2.18.4 Estimation of Godown Capacity 19
2.18.5 Precautions to be taken while handling 19
2.18.6 Monitoring while unloading of stock 20
Sampling during commodity Deposit 22
Standard Stack height of Selected Commodities 22
Factors affecting the Quality in Storage 24
Effect of Temperature & Moisture on Quality of Storage 24
Quality Management during Storage 25
Aeration 26
Inspection 27
Cleaning 28
Spraying & Fumigation 30
Fumigation 30
Rodent Control 32

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Unit 3 :Quality Analysis of Agricultural Commodities

3.0 Introduction 32
3.1
3.2 Micro environment of grain during storage 34
3.3
3.4 Type of Storage losses caused by insects 34
3.5
3.6 Parameters which determines Quality of Commodity 35
3.7
3.7.1 Sampling 37
3.7.2
3.7.3 Sampling Process 38
3.7.4
3.7.5 Coning & Quartering Process 38
3.7.6
3.8 Sample Analysis 39
3.9
3.10 Foreign Matter 39

4.1 Broken, Damaged, Slightly damaged and Immature kernels 39
4.1 a
4.1 b Weevilled seeds 39
4.1 c
Moisture 40
4.2
4.2.a Green, Immature, Shrunken, Shriveled 40
4.2.b
Admixture of lower class 40
4.2.c
4.2.d Sample Analysis of Rice 41
4.2.e
4.2.f Sample Analysis of Wheat 45
4.3
4.3 a Grade Matrix of selected commodities 49

4.3 b Unit 4 :CM -SOPs
4.3 c
4.4 Location Inspection Process 52
4.4.a
Bank Inspection Request Process 52

Survey Process (Annexure 1: Warehouse inspection report) 52

Survey Submission and Approval Process (Annexure 2: 52

Survey MIS)

Godown Take over 53

CM Appointment process. 53

New Location Kit dispatch process (Annexure 3- Assets 53

provided)

CM Training process 53

Lock & key process (Annexure 4- Key register) 53

Security Guard appointment Process 54

Authorized person verification letter from borrower 54

Control Agreement 54

Types of control Agreement 54

i. Lease Agreement (Annexure 5) 54

ii. Sub Lease Agreement (Annexure 6) 54

iii. Tripartite Agreement (Annexure 7) 54

Time and Process of Execution 55

Tracking of Control agreement ( Annexure 8) 55

Commodity Deposit process 55

Planning Before arrival Of Commodity 55

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4.4.b 1. Assessment of Storage capacity 55
4.4 c 2. Stack planning 56
4.4 d 3. Dunnage 56
4.4 e Deposit supervision 56
4.4 f Stack Building 57
4.4g Sampling and quality analysis Process (Annexure 9) 57
4.4 h Weighment of Bags (Annexure 10) 58
4.5 Commodity Deposit Form (CDF) updation (Annexure 11 & 12) 59
4.6 Insurance Details (Annexure 13) 60
4.7 CAR generation / pledge creation (Annexure 14 & 15) 61
4.8 Daily Activity Process 62
4.9 Security Monitoring Process : (Annexure 19) 64
4.10 Revalidation Process 65
4.11 Release process 65
4.11 a Withdrawal of Commodity (CWF) (Annexure 20) 66
4.11 b Godown Closing. 66
4.11 c Deviation Situations 66
Pre-stacked Commodity 66
4.11 d Open plinth funding 67
Private licensed warehouse / cold storage without lock & 67
Key.
Processing Plants and units 67

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Unit 1: Overview of NCML and CM Orientation

1.1 About NCML:

• The National Collateral Management Services Limited (NCML) is the country's leading
organization providing a bouquet of services to manage risks across various stages of
commodity and inventory handling under a single umbrella.

• Incorporated in 2004, under the provisions of the Indian Companies Act, 1956, NCML is a
governed by an independent and professional Board.

Promoters

NCML is promoted by 5 Public sector banks, 3 Private Sector Banks , 2 Farmer Cooperatives,
1 National Exchange, 1 International Collateral Management Company.

NCML’s Vision & Mission

• Our Vision
To be the most trusted and innovative risk manager and supply chain solution provider for
commodities and inventories.

• Our Mission
To empower stakeholders in commodities and inventories to deal with associated risks.

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1.2 Services offered by NCML CM Training Manual
Procurement & Supply Chain
Storage & Preservation Collateral Management

Manages modern, Association with 42 banks Procurement solutions to
scientific and IT enabled 3500+ Field warehouses corporate, processors,
warehouses 850+ Locations farmers and traders
700 + warehouses 18 States + 2 UTs First private agency
16 States 5 Port locations engaged by GOI to
120+ Locations 10+ Industrial locations procure commodities
57 Commodities Assets Under under the Minimum
1 million MT capacity Management in excess of Support Price (MSP)
Rs. 8000 crore Served more than half a
million farmers through
these services

Weather & Crop Intelligence Testing & Certification Market Intelligence

Largest private Well known brand Covers a range of
weather data name “CommGrade” commodities traded
provider in India Central Lab at in the country.
Network of 2043+ Hyderabad Pricing information
Automatic Weather 8 satellite labs at for 24 important
Stations Bikaner, Ganganagar, commodities
Coverage in 28 states Vashi, Gandhidham, Daily/Weekly
in India Indore, Jodhpur, reporting on
Offers a full range of Karnal, Cochin and National and
weather content Unjha International
Specialized testing of markets
Food, Agricultural and 730 participants to
Allied products via its monitor daily price
network of 32 variations
locations

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1.3 Organization structure of NCML

1.4 Why NCML?

• Presence across India
• Proven products at all stages of commodity handling
• Professional Management
• State of the art technology
• Customer oriented services
• Efficient risk mitigating mechanism
• High business ethics and values

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1.5 Major Clients of NCML:

Banks Government Agencies Corporates in Agri Market

•Axis Bank •Cotton Corporation of India •Adani Enterprises Limited
•Bank of India •Department of Food & Public •Cargill India Private Limited
•Canara Bank Distribution, Ministry of Agri •ITC Limited
•HDFC Bank •MMTC •Louis Dreyfus Commodities
•ICICI Bank •NAFED Private Limited
•Kotak Banks •PEC •Ruchi Soya Industries Limited
•State Trading Corporation of
India

Commodity Exchanges Food Processors and General Insurance
•NCDEX Exporters Companies

•Bambino Agro Foods •ICICI Lombard General
•CCL Products (India) Ltd. Insurance Company Limited
•TATA Coffee Ltd. •IFFCO Tokiyo General
•Ushodaya Enterprises Insurance Company
(Priya) •Agriculture Insurance
Company of India Ltd

1.6 What is Collateral Management?

• Banks provide loans to various types of borrowers like traders, farmers, processors,

exporters, importers etc against acceptable securities provided by the borrowers.

• When Banks take commodities and inventories as securities, they require the services of

some third party agencies like NCML to do the following:
o evaluate the suitability and value of such securities;
o take custody of such securities and maintain them during the loan period; and
o in case of loan default by borrowers, arrange to dispose-off such securities on
behalf of the lending banks.

All these services are bundled together and called Collateral Management Services.

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Objectives of Collateral Management
• Safeguarding the Interest of the Bank
• Provision of Timely Information to the Bank
• Control on the Fresh Deposits as well as Withdrawals
• Provision of Accurate Stock Reports on a periodical basis
• Immediate Information in case of emergent cases

1.7 Core activities of Collateral Management

• Supervision of Stock in the Banks’ Subscribed Storage Structure
• Quality Assurance & Documentation of the Fresh Deposits & Stock Withdrawals
• Reporting of Quality of Stock on a periodical basis
• Immediate Information to the Bank during Emergent cases

CM Control System
• Supervision – Collateral Manager, CM(CSO), CCG
• Control – Cluster Controller
• Monitoring – Area Manager
• Inspection – RAG, Regional Manager
•

1.8 CM Organization Structure

MD & CEO

HEAD -CM HEAD –RISK &
COMPLIANCE
CCG HEAD & TEAM REGIONAL MANAGERS IVG TEAM
SH/AM/AE
FOR NCML STAFF ONLY
BUSINESS DEVEDOPMENT EXECUTIVES

CLUSTER CONTROLLERS
CREDIT SUPPORT OFFICERS

COLLATREAL MANAGERS

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Unit 2: Scientific Warehousing: Storage & Preservation

2.0 Introduction

India is major producer of the agriculture commodities. However agriculture production
comes twice or thrice in a year and varies region to region. We need to feed our populous
country throughout the year. Production of crops happens in rural and semi urban areas. So
we need to store it safely and properly to make it available for our people in urban areas
also. Hence storage of these commodities becomes important market function since we
cannot consume these commodities at one go. Earlier warehousing sector was much
unorganized. Rising population and increase in commodity prices, scientific storage of
agricultural commodities have become very important and crucial for the nation’s economy.

2.1 Benefits of Storage

• Storage protects the quality of perishable and semi-perishable products from
deterioration;

• It helps in the stabilization of prices by adjusting demand and supply;
• Storage is necessary for some period for performance of other marketing functions.
• Storage of commodities provides employment and income through price

advantages.

2.2 What is Warehouse?

Warehouse is a commercial building where goods are safely stored for its future use.

2.3 What is warehouse management?

Warehouse management involves standard operating procedures for scientific and effective
management of the commodities stored.

2.4 What is scientific storage?

Scientific storage involves following parameters.
Building –

1. good building structure free from dampness, cracks and crevices
2. desired plinth height i.e. 2 ft -2.5 ft from ground,
3. with good ventilation facility,
4. free from insects and pests,
5. roof in good condition (no scope for leakages),
6. windows and ventilators in good condition and screened to prevent access by birds

and rodents

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Scientific Quantity and Quality Monitoring:
1. proper stack plan, by maintaining proper gully ways, haulage
2. timely fumigation and spraying practices,
3. Regular monitoring and record keeping of stocks.
4. Regular cleaning operations,
5. Fire fighting equipments
6. Trained staff

All these activities lead to scientific storage.

2.5 Benefits of Scientific warehouse management

Warehouse enables scientific storage of commodities which ensures the quality of
the stored grains as per specified parameters.
It helps to retain the quality of produce and fetch a better price when demand picks
up.
Warehouse Company also issues Warehouse receipts, based on which bank gives
loan to the depositor. These enable grower, processer and exporter to meet
immediate finance needs.

2.6 Different Types of Warehouse

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2.6.1 Types of warehouses in CM

1. S&P Warehouses –

a. These are warehouses owned or leased by NCML and are operated by our S&P
team.

b. The responsibility of CM team in case of NCML S&P warehouse receipt funding:
• CC Survey
• CC Audit only
• No CM deployment

2. Field Warehouses

a. These are warehouses which are owned and operated by private owners or
borrowers.

b. The responsibility of the CM team in Field warehouses is:
• Control Agreement
• Lock and Key Control
• CM and Security guard deployment
• Daily operations (deposit / withdrawals)

2.7 Points to follow for selection of Warehouse

1. Should not be in the Moist and Dampened Area
2. Should have a compound wall and gate for safety
3. Plinth of 2 ft
4. Warehouses should be well ventilated
5. Roof in good repair
6. Floor should be free from cracks and crevices
7. Doors sound, well fitting and secure
8. Walls structurally sound
9. Windows and ventilators in good repair and screened to prevent access by birds
and rodents
10. Rodent barriers, if provided, in good condition
11. Rainwater guttering and drainpipes secure, functioning and screened against
rodents
12. Lock points should be functional
13. No live wire should be present in godown
14. Fire fighting equipments with sufficient validity period and adequate quantity

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2.8 Points to follow before receiving commodities in the warehouse

1. Inspection of godowns: Inspection of leakage of rain water from the roof, valley gutter,
wall and floor is essential and such inspection shall be made frequently to avoid the
possibility of damage to the commodities stored.

2. Cleanliness of godowns & Environment: Cleanliness of godowns and environment
should be always maintained. The godown shall be thoroughly swept and cleaned. The
godown surrounding should be cleaned of shrubs and weeds. The internal roads and the
drainages should be maintained clear.

3. Disinfestations of Empty godowns: Before storage of agricultural commodities all cracks
and crevices in the floor and walls should be filled in and got plastered and walls white
washed. In case of brick, stone or slab flooring cement painting is necessary. In fact, care
in the selection of godowns helps to minimize moisture, insect, rat and bird damage to
stocks. Insects, and rats require a certain a amount of shelter and food supply to enable
them to form pockets of infestation. In case the existing colonies are not removed there
is every chance of cross infestation to fresh receipts. It is therefore essential to
thoroughly clean and disinfest the godowns.

4. Weighment of the stock: Normally 10 percent should be weighed at the time of receipt
in case of standardized bags/ packages and 100 percent weighment in case of non-
standardized bags.

5. Quality Check: There should be provision for checking the quality before receiving any
lot for storage. The main quality check is the safe limits of moisture content for the
produce to be stored. Besides moisture content, the lot should be checked for any
increase in temperature, fungus attack and cake formation and insect infestation from
time to time.

2.9 What is Dunnage?

It protects the food from dampness, allows ventilation and assists with fumigation.
Strong pallets make ideal dunnage.

Types of dunnage: Pallets, Round poles,bamboo mats, , polythene sheet,gunny bags etc

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Pallets Round poles - single layer

Round poles - double layer at right angles Using 5cm x10cm boards through

2.10 Stack Plan and Stack lines

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1. Divided floor area into uniform size
2. Serially numbered rectangular or square stack bases to build stacks.
3. Draw stack line 0.050m (2”) broad in white or black paint
4. The bags of all stacks should be uniform as far as possible.

Stack Layout

Plan the layout of stacks before the goods arrive
1. Clean floor before building a stack
2. Calculate the floor space & 3. Quantity to be stored
4. Type of commodity and package ,5. Dimensions of package
6. Standard stack size – 30ft x 20 ft
7. A space between stack & wall – 1m
8. 2.5 ft alleyways around the stacks
9. 4 feet haulage at door side for operational purpose
10. Stack height should not exceed height of godown wall
11. Space of at least 1m between top of the stack and roof frames

2 Ft
20 feet

2 ft 1 Ft 30 F/ 9M 1 ft 1 Ft

20 F/6 M
1 Ft

20 feet

2 Ft

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Marking the stacks

Stacking Pattern

2.11 Care to be taken while stacking the bags

Bonded stacking Unbonded stacking
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The stack should be built up to the edge of the dunnage. Place dunnage in position

Stack Card

A stack card is tally card depicting details of the stacks from the time it is built, to the time of
its issue.

1. Attach a stack card to each stack.
2. Separate stacks cards for each commodity type.
3. Record entries to stack cards whenever commodity is moved on or off a stack.
4. Losses discovered at the time of receipt are not recorded on the stack card.

2.12 Classification of Godowns according to Capacity

The central and all State Warehouse Corporations are following a design on the basis of
Indian Standard viz. IS:607-1971 (code of practice for construction of bagged food grain
storage structures).

On the basis of this code the godowns are classified as
Sr. No Godown Size Godown Capacity (in MT)

1 Small less than 1000 MT

2 Medium 1000MT and up to 5000MT

3 Large 5000MT and above

Estimation of Warehouse Capacity:

Capacity of Godown in MT = {Length (in Feet) x Breadth (in Feet)}
6

Where, Length and Breadth are inner dimensions of the warehouse.

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2.13 Precautions to be taken while handling

1. Proper Handling is needed to avoid transportation losses & spillage

2. Don't throw or drop, this will split any package, especially paper bags
3. Don't unload in the rain, wetting weakens paper bags and cartons

4. If flour or grain is wet, it becomes moldy - or even grain might germinate

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2.14 Monitoring while unloading

On weigh bridge
1. Check Fuel tank level
2. No added weight in lorry or weigh bridge
3. Both the time person should be either in or out.

While Unloading
1. Weight of gunny bag
2. No. of bags, quality of bags
3. Spillage losses
4. Quality of Commodity

While Stacking
1. Dunnage must be available
2. Stacking should be properly carried out.

Unloading and Checking
a) Check the consignment before unloading it from the vehicle. If wet or damaged packages
are seen then

Torn sacks Split paper bags Collapsed

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Wet or water-stained packages Open packages

i) Spilt grain should be re-bagged ii) Repair damaged packages

Leakage and spillage Damaged packages inside cartons

Insects on the surface of packages Underweight bags

1) Consider whether a problem should be reported before accepting the commodities
2) If cargo superintendents are present ensure they are informed about the damage
3) Sign for the commodities as damaged
4) Take special care of the damaged commodities during storage
b) Count the packages as they are unloaded - write the details of the tally on the delivery
note or waybill and ask the truck driver to countersign.
c) Inspect each container/truck

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2.15 Sampling during commodity Deposit

Quality Check:

There should be provision for checking the quality before receiving any lot for
storage.
The main quality check is the safe limits of moisture content for the produce to be
stored.
Besides moisture content, the lot should be checked for any increase in temperature,
fungus attack and cake formation and insect infestation.

2.16 Standard Stack height of Selected Commodities:

Sl. No Commodity Maximum Stack Height up to

In layers In Meters Standard Bag
4.6 size (kg)
1. Wheat 18 4.6 100 /50
4.6
2. Barley 18 4.6 100/50
4.2
3. Paddy 18 4.2
4.3
4. Jowar 18 3.0
4-3.0
5. Whole Pulse 16 2.1

6. Maize 16

7. Rice 16

8. Milled Pulses 12

9. Oil tins (4 gallons tin) 2

10. Oil drums 2

Oil seeds & Oil cakes (except

11. groundnut kernels) 15 3.7-4.3
3-3.7
12. Groundnut Kernels 12 3-3.7
3-37
13. Cashew kernels 12 3.7 – 4.3
3.0-3.7
14. Sugar 12 2.4-3.0
3.0
15. Coffee pods 14 1.8
1.5
16. Cotton bales 3-4 3.0
2.4-3.0
17. Chilles in bags 3-4 3.0-3.7

18. Chilles in docras 10-12 FOR NCML STAFF ONLY

19. Jaggery lumps 8 Kattas

20. Tamarind 4 Kattas

21. Wheat Atta 12

22. Chillies in Bags 3-4

23. Rice Bran (In dry condition) 12-14

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24. Wheat Bran 18 4.6
25. Sooji 12 3.0
26. Maida 12 3.0
27. Beasan 12 3.0
28. Cumin Seed 15 4.0 – 4.3
29. Arecanut 15 3.7 – 4.3
30. Cashewnut Pods 14 3.7 – 4.3
Subject to
31. Coir Yarn Packing 3 – 3.7
32. Coir Fibre 10 Bales 4.6
33. Jute Bales 4-5 Bales 4.3-4.5
34. Copra 8 1.8

2.17 Factors Affecting the Quality in Storage

Abiotic Factors Biotic Factors
Temperature Insects
Moisture Content Rodents
Humidity Birds
Storage Structure Fungi

2.17 A. Effect of Temperature on Quality of Commodity

CAUSES

• Unsuitable storage structure (Wrong location, insufficient shade and
ventilation facilities)

• Mass reproduction of storage insects and fungi
• Lack of aeration of store
• High moisture content of the grain

EFFECTS

• Loss in weight
• Loss in nutritive value
• Good conditions for pest development
• Condensation leading to fungi proliferation

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B. Effect of Moisture on Quality of Commodity

CAUSES

• Insufficient drying before storage
• High relative humidity
• Damage to store
• Imbalances in temperature in storage facility with subsequent condensation
• Produce stored on floor or touching the walls
• Mass reproduction of pests

EFFECTS • Contamination
• Heating
• Loss in quality • Facilitates fungal growth
• Loss in weight • Storability loss.
• Development of fungi • Improvement conditions for
• Weight loss
• Germination loss development of pests
• Commercial value loss • Swelling and germination of
• Consumer preference loss
• Nutritional values loss seeds

Factors Affecting the Quality in Storage

Factors affecting Quality, Quantity and Safety of commodity during Storage and their
Management:

Moisture: Commodity having high moisture level is prone to be infested by insects and other
pests.

Temperature: Rising temperatures can lead to insect and mold growth. Daily Aeration of
Commodity is required to lose the heat generated by grain during respiration. Godown
opening during cool hours in summer and clear sky in rainy season will help in better storage
life of the stored commodity.

Hygienic level of warehouse: Warehouse must be cleaned after every transaction and at
weekly interval. Presence of rodents, insects, flies in the warehouse is a sign of bad hygiene.

Insects: Stored grain insects should be regularly monitored and Prophylactic Sprays of
DDVP@ 1:130 Ltr. (Insecticide: Water) and Deltamethrin (1:40) should be sprayed at fortnight
and quarterly intervals. If infestation has crossed the economic threshold level than
fumigating the commodity with Aluminium Phosphide 9gm(3Tablets) /MT. Exposure of
Fumigant to commodity should be 7-8 days.

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Micro organisms: Fungus like Fusarium Sps and Rhizoctonia Sps thrives in grains if
temperature and moisture favors their growth

Rodents: Cause damage to commodity by nibbling jute bags, eating food grains, spoiling and
contaminating the commodity by high uric acid. Placing Bromediolone cake in food grains
can effectively control rodents inside the warehouse.

Birds: Birds enters in the warehouse from various openings in the warehouse and causes
damage to commodity by taking the commodity for food and their drooping also
contaminate the food grains. The only way to control rodents is to avoid entry of birds inside
the warehouse

2.18 Quality Management during Storage

FUMIGATION Aeration
Daily
Quarterly, pre &
post monsoon,
when infestation

noticed

Spray & Rodent Cleaning
Control Weekly

Fortnightly

Moisture Record
Fortnightly

There are five important operations which help us to maintain the quality of stock stored
with us. They are as below:

1. Aeration
2. Inspection
3. Sampling
4. Cleaning
5. Spraying & Fumigation
6. Rodent Control

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2.18.1. Aeration:

• When moisture level goes up in commodity, it generates internal heat in bags leading
to fire hazard or discoloration of commodity.

• Higher moisture in commodity lead to fungal growth & insect multiplication
Timing of Aeration

• Morning : 8 to 11 am
• Evening: 5 to 6 pm
When to do aeration

In summer : Early morning
In winter : Day time clear sunny day
In monsoon : Clear sky and airy days

Why aerations is necessary?
• To reduce the temperature in commodity.

Benefit of aeration
• It helps in reducing the humidity in warehouse.

Controlled Ventilation
1. Controlled ventilation has a positive effect on the moisture content of the stored produce
and the temperature in the store
2. Humid air can remoisten whereas dry air further dries the stored produce until the
relevant equilibrium moisture content has been reached.
3. The ventilation opening should be kept closed if the relative humidity is high and opened
if the relative humidity is low
4. The equilibrium moisture content of the store produce does not only depend on the
relative humidity of the atmosphere, but also on the temperature, which influences the
ability of the air to absorb water.
5. The ventilators shall be fixed 15 cm below the top edge of the wall measured from inside
the godown.

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2.18.2 Inspection

Where to inspect

a) Inspect all round the sides of a stack (also listen for insect activity)
b) Insects usually hide from the light, look for them between bags and in the seams and
`ears'.

c) At corners, you can push a bag up slightly to look further between bags
d) At the top of the stack, lift some bags and look underneath. Look round the base of the
stack and underneath the dunnage for insects and signs of rodent attack

e) Check in dark places using a good torch
f) Inspect the store itself for
1. Leaking roof
2. Broken windows or ventilators
3. Badly fitting doors
4. Cracked walls and floors
5. Signs of entry of rats and mice
g) Inspect the outside of the store and the area around it

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h) Write down what you find in your inspections
i) Do not forget to record the date. It is a good idea to use an Inspection Report Form

j) Keep these records, either in a notebook in the store or on a stack card hung on the stack
or on the wall. You can then see how the condition of the commodity, or the building, has
changed from one inspection to the next.
k) If you find anything wrong, deal with it according to the instructions you have been given;
if you have no instructions for a specific problem, ask for guidance.

Inspection of the Store and Stocks

a) Inspect the store and commodity stocks at least once a week so that prompt action can
be taken if there are any problems.
b) With all commodities, look for physical damage, staining caused by water, and evidence
of theft. With Cereal grains, pulses, flour and blended foods packed in jute or woven
polypropylene bags.
c) Use sight, hearing and smell to search for insects and rodents themselves, and for
evidence of their activities such as damaged grain and droppings.
d) Beetles and moths, webbing and cocoons
e) Damage by rats, mice and birds
f) Check for heating, by lifting a top bag and feeling the bag below

2.18.3 Cleaning

Cleanliness of godowns & Environment:

Cleanliness of godown and environment should be always maintained. The godown
surrounding should be cleaned of shrubs and weeds. The store should be kept clean and tidy
both inside and outside because clean tidy stores help in the control of pests, and make
working conditions better. The internal roads and the drainages should be maintained clear.

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Clean inside Clean Outside Sweep the floor – Daily

Clean the walls and stack sides – Weekly

a) Cleaning schedule
1) Each day, sweep the floor
2) Each week, clean the walls and stack sides
3) Each month, clean the whole store thoroughly; when the store becomes empty, clean the
whole store.
b) Always dispose of the sweepings away from the store
c) The cleaning sequence for the whole store should be:
i) First - from the top to the bottom of the store; and second –
ii) From the furthest corner inside the store, to the doorway.
d) Clean roof beams and tops of walls. When cleaning the whole store, clean roof beams and
tops of walls. Use plastic sheeting to protect the stack from falling sweepings.
e) Keep the walls and the sides of the stacks clean.
f) Thoroughly clean wall/floor joints and corners.

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2.18.4 Spraying & Fumigation 5. Cracks & crevices
6. Unused material in warehouse
Sources of Insect Infestation 7. Stack to stack
8. Godown to godown
1. Field infestation
2. Carrier vehicles
3. Old receptacles
4. Old grain

Insect Control Method - Spraying
- Air Charging
Crawling infestation - Fumigation
Flying infestation
Internal infestation

Spraying is done on walls and on the floor

A) Malathion 50% EC

• Mix with water @ 1:100
• Spray surface @ 3ltrs per 100 sq.m
• Frequency of spraying - 15 days
• Deltamethrin 2.5% WP
• Mix with water @ 40 gms per 1 ltr of water
• Spray surface @ 3ltrs per 100 sq.m
• Frequency of spraying - 3 months
B) DDVP 76% EC

• Mix in water @ 1: 150
• Air charge @ 1 ltr per 240 Cu.M in the spaces between stacks, stack and wall,

stack and roof.
• Spray walls, floor @ 3 ltrs per 100 Cu.M
• Frequency of air charging – 15 days

3.18.5 Fumigation

Fumigation is a process of exposing insects or insect infested stocks to the fumes
of a chemical at lethal concentration in an enclosed space for a specified period of
time.
Fumigant is a chemical which at required temperature and pressure exists in
gaseous state at a sufficient concentration to be lethal to the given pest.

Dosage of Fumigant:
Aluminium phosphide tablets of 3 gms each.

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Dosage – 3 tablets per ton of grain or 100-140 tablets per 100 cu.m
Exposure period – minimum 7 days.
Equipment needed - Chemical, Gas proof sheet, Sealant Mask

When to do fumigation?

Supervision during Fumigation operation

• Note exact quantity to be fumigated
• Calculate fumigant (ALP tablets) needed
• Assure quality of tarpaulin in use
• Assure size of tarpaulin require to fumigate stack:- Do not allow under sized tarpaulin
• Assure proper sealing at bottom with overlapped sand bags
• Check leakage if any
• Keep record & fix degassing date (7 - 10 days)
• After degassing check effectiveness

Fumigation Effectiveness checks:

• After lifting of fumigation cover sampling should be done for the whole fumigated
stocks & mortality of insect should be checked.

• Important action:- After degassing representative of fumigation agency & QQS will
jointly visit the fumigated stocks & draw the sample, if any live infestation observed
fumigation agency will immediately repeat the fumigation free of cost even on the
same day of fumigation & same to be intimated to DRC & Mr. Mahfooz Alam

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Phosphine Tablet Dosage

Sr. no. Quantity in MT No. of Bags (100 kg) No. of Tablets
1 1MT 10 3
2 10 MT 100 30
3
4. 100 MT 1000 300
5. 500 MT 5000 1500
6. 1000 MT 10000 3000
1500 MT 15000 4500

Avoid Cross Stack infestation:

Preventive Steps in Fumigation

1. Avoid fumigation in rainy season & extreme cold.

2. Phosphine catches fire when humidity is more than 80% & temp is around 40c
3. Alp does not release Phosphine when temp is below 5c
4. Always use safety equipment

3.4.6 Rodent Control

1. One rat consumes 10 kg of grain in a year

2. It contaminates more than 10 times what it actually eats

3. One rat drops 25 to 150 pallets and 10-20 ml urine in a day

Rat Control Measures

1. Sanitation 2. Poison 3. Rat Trap

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Unit 3: Quality Analysis and preservation of agricultural commodities

3.0 Introduction

Quality of agricultural commodity changes with time. Quality deterioration is greater risks
for agricultural commodities during storage. Hence, due care and attention is required in
order to preserve the quality of agricultural commodities.

One needs to understand, we cannot maintain the quality of agricultural commodities as it
is. Since it is a living entity; is changing its physical, chemical and biological characteristics
with time. Our aim is to reduce the rate of deterioration. We cannot stop it.

There are several ways in which we can slow the rate of commodity deterioration during
storage. We will discuss them one by one.

Imagine yourself sitting in AC room with capacity of 5 people comfortably. After a while 5
more people joins you and AC is shut off due to power cut. Unfortunately 5 more people join
the rest of you, but there is no fan, neither window or door. What will happen to you?

You will start filling heat and sweating. You will feel disturbed and can’t sit at same place
with comfort. Same thing happens with the grains.

Grains are living objects, they respire. One grain is in company of thounds/lakhs grains of
same commodity or may be different variety. Grain bag also includes foreign material of
organic and inorganic nature. There are insects feeding on the grain either in egg, larvae,
pupae and adult stage. They also respire. They eat and also do excretion. There are other
insects; pests feed on these insects also present in the bag. Take an example of rat, birds
that all eat grains and excrete the waste in or on the bag. This spoils the interior
environment of the grain within bag and spoils the living condition of the grains.

Since, grains, insects, birds, rats all respire they generate lot of heat and which removes the
moisture of the living grain and thereby makes them of poor quality. Further, if
condensation occurs in winter season, there is development of fungi, yeast which also spoils
the grains. High moisture and temperature generated due to poor storage conditions
further accelerates the rate of quality deterioration during storage period.

We will understand this with the help of following diagram.

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3.1 Micro environment of grain during storage

Hence, internal environment within bag and external environment outside the bag plays
very major role in quality preservation during the storage.

3.2 Types of storage losses caused by Insects:

Insects cause different kinds of losses viz.,
1. Quantitative loss
2. Qualitative loss
3. Damage to storage structures

1. Quantitative loss

• Direct feeding insects cause loss in weight of the stored grains
• A rice weevil will eat 14 mg out of 20 mg of a rice kernel during its developmental

period. But commercially the whole grain is lost
• A female weevil, through three generations per year, has the biotic potential to

reproduce 1,500,000 offspring which will consume 1,500,000 kernel of rice
(amounting 30 kg of rice)

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2. Qualitative loss

• Direct feeding on the grain
• Chemical changes in grain content
• Contamination of grains with moult skin and body parts
• Spreading the pathogenic micro-organisms
• Loss of seed viability
• Insects were found to cause the loss of viability of seeds to an extent of 3.6 to 41

% in paddy

3. Damage to storage structures

• Insects like Lesser grain borer has the capability to destroy the wooden storage
structures, containers polythene lined bags etc.,

• Food losses -Direct & Indirect losses:
• A direct loss is disappearance of food by spillage, or consumption by organisms

including insects.
• An indirect loss is the lowering of quality to the point where people refuse to eat

it

Considering the above discussed broad socio – economic implications and policy guidelines,
We at National Collateral Management Services Limited (NCML) are committed to deliver
best services to our esteemed customers abiding to the vision, mission of the company and
the rules of the land. Through our operations and services we are committed for
professional excellence in the field of warehousing and collateral management.

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3.3 Parameters which determines Quality of Commodity

a) Moisture Content:
Amount of Moisture in the grain which can be measured using a handy moisture meter.
The resistance offered by the grain while being physically crushed is a measure of moisture
content.
If the resistance is more - moisture is less and vice-versa.

In the absence of moisture meter, rough idea of the moisture can be established by crushing
the seed and estimating the hardness. If the seed/pod/finger/bulb is pliable, soft, easily
destructible – then it is a case of high moisture.

b) Foreign Matter:
Includes inorganic and organic matter other than the seed in question.
The inorganic matter shall include sand, gravel, dirt, pebbles, stones, glass and metallic
pieces, lumps of earth, clay and mud.
Organic matter shall include husk, chaff, straw, weed seeds and other inedible grains.

c) Grains of Poor Quality:

1. Damaged: Grains damaged as a result of heat, moisture, weather or microbes or
during harvesting and/or Storage.

2. Discolored: Grains that have changed the color as a result of microbial heat, and
some other deteriorative changes.

3. Weevilled: Weevilled grains are grain kernels that are partially or wholly bored by
insects.

4. Shrunken and shriveled: Seeds whose skin clearly gives a wrinkled /shrunken
appearance. These can be identified by overlaying surfaces, developed on the skin of
grain which is distinctly different compare to normal grains.

5. Immature: Grain kernels that are not fully developed due to some physiological
problems e.g. Frost injury, early harvesting etc.

6. Varietal Admixture: The presence of a variety of the same grain other than the
variety in consideration. The factor is very important in case of Basmati Paddy. The
sample can be immediately sent to Lab in charge Karnal.

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3.4 Sampling

• Sample is the aggregate of small portions collected from different places and
depths. It should be representative of the lot.

• Sampling point when joined make the letter ‘M’ ‘W’ and ‘Z’ in the alternative
stacks

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3.5 SAMPLING PROCESS

1. Take sample online by perking at three different places in each bag. Observe
keenly for quality of material, live infestation and fungal infestation. Use SS
plated standard perky and Enamel plate for sampling given from concerned
lab.

2. Ensure that there is no live infestation at the time of sampling. If live
infestation found then immediately report to Lab In charge & CMP In
charge/Manager (No sampling will be done in such case).

3. 100% sampling is to be done in case of non infestafed stock.
4. Mix the composite sample thoroughly. By Coning and quartering collect Lab

sample and Warehouse sample.
5. Prepare TRF (Test Requisition Format) and sample tags, duly signed by

(Depositor and) and Collateral Manager /Cluster Controller.
6. Tie the neck of sample bags with thread along with the tag and seal it with

wax. Stamp the wax with Brass seal (alternatively plastic seals may be used ).
7. Handover the Warehouse sample and copy of TRF (Test Requisition Format)

to Warehouse in-charge.
8. Courier/Handover Lab sample to respective lab along with sample details.
9. Inform the concerned lab/Persons about the Courier and sampling details.

3.6 Coning and Quarterinring Process

• Thoroughly mix the entire sample on paper /gunny bag
• Prepare a circle out of it
• Divide the circle in 4 parts as shown in figure
• Discard the opposite corners of the circle
• Again repeat the process of quartering and discard the other side of the sample
• Repeat the process till the time you get desired sample size for analysis.

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3.7 SAMPLE ANALYSIS

3.7.1. Foreign Matter

1. Take 100+ 0.1 gm weighed sample in white enamel plate.
2. Separate Organic and Inorganic matters.

The inorganic matter includes sand, gravel, dirt, pebbles, stones, lumps of earth, clay,
mud and metallic pieces etc.
The organic matter includes animal filth, chaff, weed seeds, straw and other edible
and inedible grains.
3. Pick up all Foreign matter present on the enamel plate.
4. Collect all foreign matter in Petri dish.
5. Weigh all the foreign matter. Calculate the percent of foreign matter by the given
formulae.

%Foreign matter = Weight of the Foreign matter collected x 100
Weight the sample taken for the test

2.7.2 Broken, Damaged, Slightly damaged and Immature kernels

1. Take the above foreign matter free sample.
2. Separate kernels/seeds/pods those are broken, damaged, slightly damaged and

immature kernels.
3. Collect all broken, damaged, slightly damaged and immature kernels and weigh.
4. Calculate % of Broken, Damaged, Slightly damaged and Immature kernels

%Broken, Damaged, Slightly damaged And Immature = Weight of seeds x 100
Wt of the sample
3.6.2 Weevilled Seeds

1. Take the above sample.
2. Separate the kernels which are weeviled and weigh.

% Weevilled seeds = Wt. of Weevilled seedsX100

Wt of the Sample

Count

1. Take 100+ 0.1 gm weighed sample in white enamel plate.

2. Count manually total no. of grains in 100g of sample.

3. Express it as count per 100g.

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3.6.3 Moisture

1. Note down the empty weight of the Petri dish(W0).
2. Take 5 gm of ground sample in above Petri dish (W1).
3. Dry the sample in hot air oven at 1300+30C for 2 hours.
4. Take out the sample and keep it in desiccator for 15 min.
5. Note down the weight.
6. Repeat the above step until the weight difference between 2 consecutive readings is

0.05gm.
7. Note down the weight(W2)

8. Calculate % moisture by formula given below .
% Moisture = (W1-W2) X 100
(W1-W0)

Where, W0= weight of the empty Petri dish
W1= weight of the sample with Petri dish before drying
W2= weight of the sample with Petri dish after drying

3.6.4 Green, Immature, Shrunken, Shriveled:

1. Weigh about 20g (W1)of foreign matter free sample.
2. Separate green, immature, shrunken and shriveled grains by hand picking.
3. Collect all green, immature, shrunken and shriveled grains in a Petri dish.
4. Weigh collected green, immature, shrunken and shriveled.
5. Calculate the percent of green, immature, shrunken and shriveled by the given

formula.

%Green, Immature = Wt of green, immature, shrunken & shriveled X 100
Shrunken and Shriveled Wt of the sample (20 gm) (W1)

3.6.5 Admixture of Lower class:

1. Take above remaining sample.
2. Separate the other lower class grains from the samples and collect in a Petri dish.
3. Weigh and calculate the percent of lower class by the given formula.

%Admixture of lower class = Wt of other lower class grains X 100
Wt of the sample (W1)

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3.7 Sample Analysis of RICE

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3.8 Sample Analysis of WHEAT

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3.7 Grade Matrix of Selected Commodities

Grade designation of Paddy

Paddy Foreign Matter Admixture Damaged Immature, Moisture
(% by wt.) Weevilled (% by wt.) Content
(% by wt.) 5.0 1.0
10.0 2.0
I 1.0 15.0 5.0
30.0 10.0
II 2.0

III 4.0

IV 7.0

Grade designation of Bengal Gram Damaged Weevilled grains per Moisture
Bengal Gram Foreign Matter (% by wt.) Grains

Organic Inorganic 0.5 cent by count Content
2.0
I 0.10 Nil 5.0 3.0 10.0

II 0.50 0.10 6.0 12.0
III 0.75 0.25 10.0 16.0

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Grade designation of Maize

Maize Moistu Foreign Matter Other Admixtur Damage Immature Weeville
re Edible e of d and d grains
I Organic Inorganic grains different Shriveled (% by
II 12 varieties grains grains count)
III 12 0.10 Nil 0.5 1.0
IV 14 0.25 0.1 1.0 5.0 2.0 2.0 2.0
14 0.50 0.25 2.0 10.0 3.0 4.0 4.0
0.75 0.25 3.0 15.0 4.0 6.0 6.0
15.0 6.0 8.0

Grade designation of wheat

Grade Foreign Other Other Damaged Slightly Immature Weevilled
Designation matter food wheats grains damaged shrivelled & Grains
(% by grains (% by (% by wt.) grains BrokenGrains (% by wt.)
wt.) (% by wt.) (% by wt) (% by wt.)
wt.) 1.0
I 1.0 1.6 5.0 2.0 2.0 2.0 1.0
II 1.0 3.0 15.0 4.0 4.0 4.0 3.0
III 1.0 6.0 20.0 5.0 6.0 10.0 6.0
IV 1.0 8.0 20.0 10.0 10.0 10.0

Grade designation of Rapeseed/Mustered

Maximum limit of tolerance % by weight

Grade Foreign Damaged, Shriveled Small Admixture Whole Moistur
Designatio matter discolored immature atrophied of other sound e by
n & Dead & slightly seeds varieties seeds by weight
1.0 seeds damaged of mustard weight
I 3.0 1.0 1.5 3.0 5.0 92 7
II 5.0 10.0 7
III 2.0 4.0 15.0 10.0 80 7

3.0 3.0 15.0 60

Grade designation of Soybean

Grade Oil Acid Moisture Damaged Immature Splits foreign matter

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