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Punjab CM announces reduction in market & rural development fee for Basmati

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22 September 2020, Chandigarh, IN: Chief Minister Captain Amarinder Singh on Tuesday announced reduction in the Market Development Fee (MDF) and the Rural Development Fee (RDF) rates, from 2% to 1% each. This will help in paving the way to provide a level playing field for Basmati traders and millers from within and outside Punjab, especially in the light of the provisions of the new Agriculture Bills,

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Keeping Punjab Basmati competitive in International Market

The move, which will also help keep Punjab Basmati competitive in the international markets, will provide relief to the tune of Rs.100 crore to Basmati traders/millers, according to an official spokesperson. However, the change comes with the caveat that no refund of any fee will be allowed to any paddy/rice dealer/miller/trader for export of the Basmati paddy/Rice to other countries from the state.

The Chief Minister’s announcements came in response to a proposal of the Punjab Mandi Board, made after thorough examination of the representations received from the Punjab Rice Millers & Exporters Association and the Punjab Basmati Rice Millers & Exporter Association.

The Punjab Rice Millers & Exporters Association had submitted that with the farm ordinances coming into force, the disparity in fees and other charges among the Basmati producing states would be around 4 percent, thus making the rice industry in Punjab economically unviable as it would be unable to compete with Rice exporters in Haryana, Delhi and U.P. which had totally exempted the market fees from agricultural produce.

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They had also pleaded that Punjab based exporters would not be able to cover the additional cost of taxes, which is 4% plus, thus making it extremely difficult for them to remain in business. This trend may force them to purchase paddy from other states to remain in competition with their counterparts in Haryana, U.P. and Delhi.

Pointing to the excellent Mandi infrastructure network of the Punjab Mandi Board, the Association had urged the State Government to implement 0.35 percent to 1 percent usage charges/Mandi fees on the first purchase instead of all other charges that are currently levied, in order to keep the Punjab rice industry competitive viz-a-viz other states.

Photo credit: BONGURI on Visual hunt / CC BY-NC-ND

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