With the Rajasthan government levying a 2 per cent Krishak Kalyan fees on agricultural produce brought or bought or sold in mandis, people associated with agricultural mandis in the state and farmer groups have voiced their opposition to the new cess.
The government has said that the 2 per cent fees collected will be deposited in the Krishak Kalyan Kosh — dedicated to the welfare of farmers in the state. However, farmer outfits are apprehensive that people at agricultural mandis will pass on the burden of the increased cost to farmers, already reeling by the lockdown imposed due to the coronavirus, while traders at mandis have gone on strike.
In a memorandum to the government, the Rajasthan Khadya Vyapar Sangh has said that the Krishi Kalyan fee will result in farmers getting less prices for their agricultural produce, traders incurring losses because of people choosing to sell the produce to black marketers, and agriculture produce from Rajasthan being sold outside the state.
“The tax is on raw materials. The prices we farmers are getting for our produce in mandis are already much lower than the minimum support price (MSP). If the traders have to pay the fees, then they will likewise realise the amount from us by reducing the price paid to us for our produce. At this crisis situation in lockdown, this will lead to farmers sustaining losses. In a bid to get more prices, farmers will have to go to neighbouring states such as Punjab to sell their produce now. This will result in losses for the state,” said Ranjit Singh Raju, convener, Gramin Kisan Mazdoor Samiti (GKS), Sriganganagar district.
The issue was raised and brought to the notice of Chief Minister Ashok Gehlot by public representatives during a video conferencing session the CM had held with MLAs and MPs on Sunday.
Last year, Gehlot, in the modified state budget, had announced the creation of the Krishak Kalyan Kosh for the purpose of ensuring they get fair price for their produce and to strive towards “ease of doing farming”.
Accordingly, the government brought in The Rajasthan Agricultural Produce Markets (Amendment) Ordinance, 2020, which was promulgated by the Governor on May 1, amending Section 17 of the Rajasthan Agricultural Produce Market Act, 1961.
The newly-inserted section 17A stated that “The market committee shall collect Krishak Kalyan fee from the licensees in the prescribed manner on the agricultural produce brought or bought or sold by them in the market area at such rate as may be specified by the state government, by notification in the official gazette. The fee collected shall be deposited in the Krishak Kalyan Kosh constituted under section 19-A.”
Following this, in a gazette notification published on May 5, the state levied the rate of Krishi Kalyan Fees on agricultural produce brought, bought or sold in mandis as Rs 2 on every Rs 100.
According to Babulal Gupta, the chairman of the Rajasthan Khadya Padharth Vyapar Sangh, traders in at least 247 mandis in the state went on strike starting May 6 – the day the fees began to be levied – demanding that the government withdraw the decision.
“There is already mandi cess of 1.6 per cent on the produce. This 2 per cent fees will increase it to 3.6 per cent, which is much higher than other states. This increased cess will encourage black marketing as many would try to sell their produce outside the mandi mechanism. The government says that fees will not be paid by the farmer or the trader but the consumer. But in this way, if representatives of an oil mill come to procure mustard in open auction, then they will calculate beforehand that there is a 2 per cent fees to be paid and keeping in mind their profit margin, will bid lower accordingly, which will result in low prices,” Gupta said.
Farmers have said that due to the strike in the mandis, they are incurring losses, voicing concern that the fee could lead to a decrease in the price they get from the mandis for their produce.
“I don’t know about farmers’ welfare in the long run, but once the mandis end the strike, this 2 per cent cess can result in the traders paying us less for our produce. Prices in the mandis are already lower than the MSP and even if we lose Rs 100 per quintal, our losses in one season can well go over Rs 1 lakh,” Rajinder Singh, a farmer from Karanpur Tehsil of Sriganganagar district, said.
In response, Agriculture Department joint secretary S P Singh said that after the creation of the Krishi Kalyan Kosh was announced, there was no fixed flow of funds for it, and said the 2 per cent fees levied with serve as a regular source of revenue for it, enabling more spending by the government for farmer welfare.
“Recently the government had to take a bank loan of Rs 2,000 crore on account of Krishi Kalyan Kosh, and from it Rs 1,500 crore was paid as state share of insurance premium under the Pradhan Mantri Fasal Bima Yojana (PMFBY), which resulted in farmers receiving insurance claims worth Rs 2,200 in the past 20-25 days even amidst the coronavirus crisis. We need a steady source of revenue for the Krishak Kalyan Kosh as the financial resources are limited and bank loans taken for this purpose also need to be repaid by the government,” said Singh.
The government has also insisted that the money collected as Krishi Kalyan fees will be spent on the welfare of farmers.
“The fee will be a burden neither on the people associated with the mandis nor the farmers. This charge is meant for the next point of sale, after farmers sell their produce. For the first time, a dedicated fund, the Krishi Kalyan Kosh has been created for the welfare of farmers and this money collected will actually benefit them as it will be spent for their welfare. The entire money will be used on ensuring that the farmers get adequate price and providing them other incentives,” Naresh Pal Gangwar, Principal Secretary, Agriculture and Horticulture Department and the Agricultural Production Commissioner told The Indian Express.
Gangwar also pointed out that unlike other states, Rajasthan does not charge development charges on agricultural produce.
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