The Punjab Government has announced a reduction in the market development fee (MDF) and the rural development fee (RDF) from 2% to 1% each, on Tuesday, thus paving the way for a level playing field for Basmati traders and millers from within and outside Punjab, especially in the light of the provisions of the new Agricultural bills.
“This move by the state government will help keep Punjab Basmati competitive in the international markets, provide relief to the tune of Rs.100 crore to Basmati traders and millers. However, the change comes with the caveat that no refund of any fee will be allowed to any paddy or rice dealer, miller and trader for export of the Basmati paddy and rice to other countries,” said an official.
The announcement by CM Capt Amarinder Singh came in response to a proposal of the Punjab Mandi Board after a thorough examination of the representations received from the Punjab Rice Millers and Exporters Association and the Punjab Basmati Rice Millers and Exporter Association.
The Punjab Rice Millers and 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 UP which had totally exempted the market fees from agricultural produce.
They also claimed that Punjab-based exporters will not be able to cover the additional tax expense of 4 per cent plus, making it extremely difficult for them to stay in company. This pattern will cause them to purchase paddy from other states in order to remain in competition with their counterparts in Haryana, UP, Delhi.
Pointing to the excellent Mandi infrastructure network of the Punjab Mandi Board, the Association urged the State Government to apply 0.35% to 1% of the user charges and mandi fees for the first purchase instead of any other charges currently imposed, in order to keep the Punjab rice industry competitive vis-a – vis other states.
Tags: Market Development Fee, Rural Development Fee, Punjab Basmati, Punjab agriculture, Farm Bills