Rice millers and exporters would benefit significantly from a recent move by Haryana and Punjab governments to slash market fee levied on basmati rice by 50 per cent or more.

The decision was announced by respective State governments on Tuesday within two days of the Centre passing a farm Bill that allows direct trade of agricultural produce outside recognised grain mandis across the country without any cess. The move is expected to save hundreds of crores of rupees for agri-business firms dealing in basmati rice.

While Punjab government announced it would reduce market development fee (MDF) and rural development fee (RDF) from 2 per cent to 1 per cent each, Haryana slashed them from 2 per cent each to 0.5 per cent each, respectively.

Currently, rice mills and processing units pay 4 per cent for buying basmati crop from designated Agricultural Produce Marketing Committee (APMC) mandis in these two States.

According to an official spokesperson for Punjab government, this is being done to open up a level-playing field and the decision is expected to give millers and traders a relief of ₹100 crore in Punjab alone.

GPS Randhawa, General, Manager (Projects), at the Punjab State Agricultural Marketing Board, said they are yet to receive a notification from the government, but added that the information is correct.

“This is being done to help millers and exporters from the State retain their competitive edge as the neighbouring States have reduced the fee,” Randhawa said.

However, Bal Kishan Bali, President of Punjab Rice Millers and Exporters Association, said their demand was to reduce MDF and RDF to 0.5 per cent each as was done by Haryana.

“We would like to procure basmati from grain mandis. Moreover, unlike other States such as Haryana, Uttar Pradesh, and Rajasthan, Punjab has not allowed trade outside mandis after the Centre brought in the ordinances, which have now become a Bill after the parliament passing them,” Bali said.

According to him, the State government may have to do this if Punjab has to retain its pole position as the State with highest basmati exports. India exports over 4 million tonnes of the aromatic rice annually on an average of which more than 40 per cent comes from Punjab, he said.

Market fee income

Sanjeev Kaushal, Additional Chief Secretary to the Haryana government, who has the charge of Department of Agriculture and Farmers’ Welfare, said the State has reduced MDF on most rice varieties other than PR varieties and cotton from 2 per cent to 0.5 per cent.

“Besides, the law is being amended by the Department of Development and Panchayats to bring down HRDF (Haryana RDF) to 0.5 per cent from existing 2 per cent with retrospective effect,” Kaushal said.

In 2018-19, total income from the collection of market fee was nearly ₹820 crore and HRDF, too, yielded an income which is slightly less than this, according to information available from the Haryana State Agricultural Marketing Board.

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