Punjab mandi board reluctant on market fee hike; key meeting on Oct 11
The funds collected as fees go to the Punjab Rural Development Board for infrastructure, including link roads, which, the government argues, is for the benefit of the farmers.punjab Updated: Sep 27, 2017 19:50 IST
The Punjab government move to increase the market and rural development fees on farm produce sale from the current 2% to 3% — to mop up an additional Rs 900 crore a year — has received cold response from the Punjab State Agricultural Marketing Board, or mandi board.
The August 24 decision of the state cabinet awaits clearance from the mandi board, whose directors will discuss the matter on October 11. There is opposition to the move from state farmers, and the mandi board is at the centre of it, because it manages procurement of grains and other produce through a network of 1,700 mandis.
The corresponding levy is lower in states such as Rajasthan (1.6%) , Uttar Pradesh (2.4%), and Madhya Pradesh (0.2%).
One of the options on the mandi board’s mind is to hike the fee only for the dominant crops, wheat and paddy. “We will implement the government’s decision, but we will see that farmers’ interests are not harmed,” said the board’s chairman, former Congress minister Lal Singh. “In the board meeting of October 11, we will decide whether to implement the hike on all crops or just wheat and paddy.”
Balbir Singh Rajewal, president of a faction of the Bhartiya Kisan Union, said the enhancement is unjustified because, “though the fees are levied on the purchaser of the farmers’ produce, the burden actually falls on the farmers”. He added, “This will lead to increase in the costs and dissuades traders from buying from the state,” he said.
The funds collected as fees go to the Punjab Rural Development Board for infrastructure, including link roads, which, the government argues, is for the benefit of the farmers.
However, with the cotton crop ready, farmers in south-west Punjab prefer to take it to mandis of Sri Ganganagar (Rajasthan) and Dabwali (Haryana), where the levies are lower. Next, basmati growers are worried and already demanding a rollback as the crop is set to arrive in mandis by the end of October.
The Punjab Basmati Rice Millers’ Association has said that said big mills set up under the ‘mega project’ category have been exempted from the market fee, so the business will shift to those. In 2013, the government had abolished both the fees on purchase of basmati, but it was levied again in 2015.
Wheat and paddy produce are bought mostly by state agencies and the Food Corporation of India (FCI) on behalf of the Centre, while other crops are primarily procured by traders.