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Before arrival of Basmati in mandis, farmers, exporters demand waiver of market fee, rural development cess

They argued that the move will help farmers get good price for their crop from exporters, who are the main purchasers of the Basmati, adding that these taxes are otherwise also refundable to the exporters.

Written by Anju Agnihotri Chaba | Jalandhar | September 3, 2020 9:38:09 am
Basmati would hit the state’s mandis this month.

Ahead of the arrival of early varieties of Basmati in mandi, Punjab farmers and exporters are demanding a waiver of market fee and rural development fund (RDF) cess charged from exporters when they purchase Basmati from the farmers at Punjab Mandi Board (PMB) premises.

They argue that this move will help farmers get good price for their crop from exporters, who are the main purchasers of the Basmati, adding that these taxes are otherwise also refundable to the exporters.

Basmati would hit the state’s mandis this month.

Exporters said they pay 6.5 per cent tax in total on purchase of Basmati which includes market committee fee and RDF at the rate of 3 per cent each.

A leading exporter said: “As per the norms, Basmati exporters are not supposed to pay any tax and the RDF and market fee charged from them is also refundable. But for the past 2-3 years, no refund was given to the exporters by the Mandi Board and over Rs 200 crore of such funds are lying pending with the government.”

“We have written to the Punjab government to issue directions to the Mandi Board to release our long pending Market Fee and RDF dues on priority basis,” said Ashok Sethi, Director Punjab Rice Millers and Exporters Association, adding that if exporters will not get this refund and they are asked to pay both RDF and market fee then it would affect the farmers ultimately.

Another leading exporter said that when exporter will be required to pay these heavy taxes, he will certainly keep the price low at the time of purchase.

Other exporters that spoke to The Indian Express also Centre’s recent ordinances have raised many important issues which require immediate intervention of the state government.

“While Punjab Assembly has passed a resolution against this ordinance, other Basmati growing states like UP, Haryana, Himachal etc. have accepted the new ordinance and issued new advisories like waiving off market fee and RDF while levying ‘user charges’ (To use the yard of state Mandis) at very low percentage like Haryana would charge 1% use charges,” said Sethi, adding that taxes and levies are much higher in Punjab at over 6.5 per cent and this huge disparity in taxes and levies would affect the purchase from farmers.

“In such a condition, exporters will purchase more from those states where user charges are minimum and will pay less to the farmers here when they will have to spend more on the taxes,” said an exporter.

They demanded that the situation should be cleared before Basmati varieties like 1509 hit markets by the first week of September.
Bhartiya Kisan Union (BKU) Dakaunda General Secretary Jagmohan Singh said that Basmati is one of the best alternative against Paddy (Parmal rice). “We support that taxes should not be levied on the traders or exporters when they purchase it from the farmers in the mandis but certainly when traders sell it further and make profits, a portion of the profit share must be charged by the government to utilise that amount for the development of our rural area from where farmers come to the mandis to sell their produce to the exporters,” he said.

“When exporters are free from such charges, government should not charge from them because they assume that they will not get the refund of these taxes and pay less to farmers and made big profits from farmers’ produce by exporting the premium crop,” said a Basmati grower Devinder Singh of Tarn Taran, who grows Basmati on 50 to 70 acres every year.

Nearly 2.5 Million Tonnes Basmati is brought to the markets of PMB every year by the farmers.

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