After much dilly-dallying, the Punjab government on Tuesday allowed traders from outside to lift basmati, which has already started arriving in the mandis.
At a meeting chaired by chief minister Parkash Singh Badal it was decided to continue with the incentives given to basmati millers during the previous kharif season, and to slash the market fee and rural development fund by 1% each to motivate the buyers from outside, especially from Haryana, to speed up purchase of basmati.
Agriculture minister Tota Singh and food and civil supplies minister Adesh Partap Singh Kairon in the past fortnight held half a dozen meetings with farmers, traders, millers and officials of the state government.
The state government had waived mandi fee (2%), rural development fund (2%) and infrastructure development fund (3%) on purchase of basmati for milling in Punjab during the previous kharif season. Around 4% VAT (purchase tax) is reimbursed by the Centre to the exporters.
The decision to allow traders from outside to lift the basmati got delayed as the state government was caught up between the basmati traders from Punjab as well as those from Haryana. A meeting with the traders from Haryana was held on Saturday and they demanded a level-playing field by asking for tax exemptions on par with the traders in Punjab. Whereas the Punjab traders in the meetings before that had said that it would be unjustified on part of the state government to allow tax exemptions to traders from outside.
Punjab Mandi Board vice-chairman Ravinder Singh Cheema said, “On Tuesday, the chief minister managed to convince traders from Punjab that they had the capacity to mill only 27 lakh tonnes of basmati and beyond that the government had to involve traders from outside.”
The area under basmati cultivation increased from 5.5 lakh hectares during the previous season to 8.6 lakh hectares in the current season and the production is expected to increase from 22 lakh tonnes to 35 lakh tonnes this time.
It was also clarified that the VAT (purchase tax) is not charged from exporters of basmati who purchase basmati from Punjab. They can avail the refund of VAT paid by them on the basis of existing documentation procedure.
Give reasonable price to farmers
In the meeting, Badal asked the traders to give a reasonable price to the farmers for basmati. “Now that I have accepted your demand, you must give good price to farmers,” Badal told traders from Haryana. In Haryana the basmati fetches a higher price.