Explained: Why farmers are not cheering Punjab’s fuel price cuthttps://indianexpress.com/article/explained/why-farmers-are-not-cheering-punjabs-fuel-price-cut-5592211/

Explained: Why farmers are not cheering Punjab’s fuel price cut

The Indian Express tries to explain as to why the rate cut of Rs five and Re one per liter on petrol and diesel is not as significant as it appears from the outside.

Explained: Why farmers are not cheering Punjab’s fuel price cut
Till around 2016-17, a farmer used to pay Rs 1,000-1,200 for harvesting, threshing and cleaning the paddy or wheat from one acre using combine harvester. In 2018-19, the rate increased Rs 1400-1,500 per acre (Express File Photo)

Punjab government in its third budget announced a cut of Rs five and Re one per liter on petrol and diesel, respectively. While the cut seems to have brought relief to the general public, it is not seen as enough for the stressed farming community in the state.

How fuel price impacts the farming community in Punjab?

Punjab’s 18 lakh farmers are the major users of diesel. There are 1.5 lakh diesel operated tubewells in Punjab, 15,000 combine harvesters, which are used for harvesting wheat and paddy. Besides this, there are 25,000 crop residue management machines, lakhs of tractor-trolleys, ploughers, and several other small farm machines which are operated on diesel in Punjab. With Punjab being a major contributor of wheat and paddy grain to central pool, most of these grains are transported through diesel-operated trucks only.

What is the current price of diesel in Punjab after reduction?

On Tuesday, the price of the diesel was Rs 65.05 per liter following the Re one cut in Punjab. The prices of diesel in Punjab are still high compared to neighbouring states. Diesel prices in Chandigarh are Rs 62.93 per liter, it is Rs 63.62 per liter in Solan, Rs 64.67 in Damtal in Himachal.

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How has the price of diesel changed since the state’s Congress government took over in 2017?

Though the petrol and diesel prices are decided by the Centre, state governments can always reduce the Value Added Tax (VAT) and local cess, which are different in different states, to keep the prices of these products at par with neighbouring states. When Congress government had come into power in Punjab in 2017, the prices of diesel were around Rs 56 per liter including 28 per cent VAT plus 10 per cent additional tax on VAT. The diesel rates touched Rs 70 to 71 per litre in September 2018 in the state, which means during the first 18 months of this government, state had seen an increase of around Rs 15 per liter in diesel prices.

In October last year, the rates were again decreased by Centre and finally it come down to Rs. 66.01 per liter till Monday. As per these calculations, the prices of diesel are still up by Rs 9 to 10 per liter compared to what they were in 2017.

How has this change impacted farming?

Till around 2016-17, a farmer used to pay Rs 1,000-1,200 for harvesting, threshing and cleaning the paddy or wheat from one acre using combine harvester. In 2018-19, the rate increased Rs 1400-1,500 per acre and similarly, the operation of every farm implement has gone up due to increase in rates, said farmer Jagdeep Singh of Kanoi village.

What is the total saving after the cut?

Not much. If a farmers is required 10 liter diesel for running a harvester on his one acre field, it will save him just Rs 10 per acre for one crop. By all means the total saving on an acre annually would not be more than Rs 40-50 by running all required implements for harvesting and other purposes, said another farmer Amarjit Singh of Jalandhar.