The Agricultural Produce (Grading and Marketing) Act, 1937 was enacted by the Parliament with an intention to provide for rating and marking the products taken from agriculture including other products. The Act extends to the entire Indian Territory including the State of Jammu and Kashmir. According to the interpretation clause of the Act, ‘agricultural produce’ means all the agricultural produces or horticulture added with all products of food or any drink produced in such manner and fleeces inclusive of animal skins. The word ‘covering’ consists of crate, tray, container, box or vessel. To designate the grade given to the products, grade designation mark is provided. The Grade designation is the description provided as pinpointing of excellence of any article described in the Schedule. The quality with regard to the product contains the status and form of the article. According to the provisions of the Act, where the agricultural products is observed through a grade designation mark or covering that includes or label closed to that product is marked, such product is believed to be marked with the grade designation mark.

In addition, the enactment enumerates the articles which are supposed to be misgraded. Where the article lacks excellence or quality for the purpose of obtaining grade designation according to which it is marked, such article is believed to be misgraded. If the constitution of the article presented for grading is changed subsequent to the sample has been taken for scrutiny and conclusion of grade designation of the product as per the provisions of the rules framed under the present legislation, such article is reasoned to be misgraded. Otherwise, if the product is altered in any form or any fake assertion is formulated regarding the quality or superiority provided for grade designation through the label or by means of advertisement, such article is also misgraded.

The Act empowers the Central Government to create rules in accordance with the provisions of the enactment. The rules shall consists of determining grade designation to point out the quality of any article described under the Schedule, characterizing the quality of the product specified under the grade designation, denoting grade designation marks to symbolize specific grade designation and empowering a person or group of persons to provide grade designation mark to any product with regard to which the mark is set down or any covering included with or label fastened in any product. The rule making power also extends to pointing out the stipulations regarding the mode of marketing, packing process, the kind of covering and the weight of the product, number etc. The rules shall also consist of reimbursement of expenditure sustained from the production or utilization of implement essential for the re-manufacture of grade designation mark or with the covering or label marked with grade designation or means to manage the value with such mark added with experimenting with samples and scrutiny or promotion work carried out to endorse the trade of different category of products. The power of the Central Government extends to deduction and clearance of articles marked in consonance with the stipulations pointed out with grade designation mark along with other subject which is necessary to be specified. The rules formulated by the Central Government are to be laid before the Lok Sabha and Rajya Sabha instantly in the manner provided under the Act.

Besides, the Central as well as the State Government or prescribed authority shall be authorized by the Central Government to come into any property at any practical time or make needed inspection and investigate the agricultural produce with regard to any breach. Such authorization given by the Central Government is considered to be warrant according to the Code of Criminal Procedure, 1973. The Act also empowers the authorized officers to confiscate agricultural produces in the manner and for the reasons stated in the Act. The Act has been amended several times in 1942, 1943 and 1986 where The Agricultural Produce (Grading and Marking) Amendment Act, 1986 has amended the parent Act elaborately.