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Punjab still to decide if to bring outside traders to lift basmati

The Punjab government seems to have been caught up between the basmati rice traders from Punjab as well as from Haryana following which a decision to allow traders from outside to lift the basmati crop is being delayed.

chandigarh Updated: Sep 30, 2014 08:20 IST
Gurpreet Singh Nibber
Gurpreet Singh Nibber
Hindustan Times

The Punjab government seems to have been caught up between the basmati rice traders from Punjab as well as from Haryana following which a decision to allow traders from outside to lift the basmati crop is being delayed.

It has already been a fortnight since the state government is holding meetings to ponder the issue, but without reaching a decision.

A meeting with the traders from Haryana was held on Saturday and they demanded a level playing field, demanding tax exemptions on par with the traders in Punjab.

Whereas the Punjab traders in the meetings before that had conveyed that it would be unjustified on part of the state government to allow tax exemptions to traders from outside.

"When we knew that area under basmati cultivation had increased and production was going to be an all time high, we should have taken steps on lifting much earlier," said agriculture minister Tota Singh, accepting that the government kept sitting on the issue.

Facing opposition from the Punjab traders, the state government says traders in Haryana offered better rate for lifting the basmati, that is, Rs 3,200 to 3,500 per quintal, whereas the Punjab traders offered a lifting rate of up to Rs 2,500 per quintal. "So why not invite Haryana traders as we want more buyers for our crop so that the rate gets a boost," said Tota Singh.

"Though there is no decision so far, we would manage to prevail upon Punjab traders and make them accept that Haryana traders could also be allowed," said an agriculture department officer.

The crop has begun arriving in the mandis of Fazilka, Abohar, Tarn Taran, Amritsar, Gurdaspur and Batala areas. Against last kharif season's total basmati production of 22 lakh tonne, this season it is expected to touch 35 lakh tonne.

Slow-lifting of the crop is expected this season as the total basmati in the state is expected to be worth Rs 12,000 crore, whereas traders in the state have the capacity to lift crop worth Rs 5,500 crore.

The Punjab government decided to call traders from outside realising that traders in state could not lift the crop and the state also lacked sophisticated rice shelling mills for basmati.

The area under basmati cultivation has increased from 5.5 lakh hectares in the previous kharif season to 8.1 lakh hectares in the current season.

In the previous season, Punjab traders were given a tax exemption of about 11%, which included 2% market fee, 2% rural development fund, 3% infrastructure development tax and 4% purchase tax. But, there was no exemption for traders from other states.

As per reports, the state government is planning to impose 1% each as market fee and rural development fund on Punjab traders from the current season.

"Haryana traders also want exemptions in the same proportion. Rather they want to be compensated for the transport charges they would incur for lifting the crop from Punjab," said an officer of the agriculture department.

According to reports, Punjab is preparing a proposal to impose taxes on Haryana farmers on par with their home state. Punjab plans to impose Haryana traders 2% each as rural development fund and market fee, 2% as central sales tax and 1% infrastructure development cess and give exemption from paying 5% VAT.

The three meetings chaired by chief minister Parkash Singh Badal have taken place in the past one week, but without a decision. Contrary to the apprehensions of the state government basmati traders have claimed that they can lift the entire crop.

Basmati in brief

The issue: Basmati production expected to touch all time high of 35 lakh tonne in Punjab, and the state is not geared to procure and process the crop. So it decided to involve traders from Haryana to bring in more buyers for the basmati produce.

Punjab traders want: Monopoly in the trade by not allowing traders from outside.

Outside traders want: Treatment on par with Punjab traders; also want compensation for transportation cost.

Punjab govt stand: Despite opposition from the state traders, state will facilitate traders from outside, especially Haryana, as they offer higher price for basmati.

Impact on farmers: As per formula of demand and supply, more buyers for basmati means higher price. With outside traders coming in to lift crop, Punjab is expecting higher remunerative price for basmati.

Basmati expected:
35 lakh tonne
Last season: 22 lakh tonne

Area under basmati: 8.1 lakh hectares
Last season: 5.5 lakh hectares

Total basmati expected: Worth Rs 12,000 crore
State traders can lift: Worth Rs 5,500 crore

First Published: Sep 30, 2014 08:06 IST