Punjab Reduces Market Fees and Rural Development Fee

Punjab decreases market and rural development fees for Basmati to remain competitive with other grain-producing states. Move to provide Rs 100 crore relief to exporters and better prices to farmers

Reduction in the Market and Rural Development Fees

Punjab lowered Market Development Fee (MDF) and the Rural Development Fee (RDF) rates, from 2% to 1%. Further, the government has allowed using the premises of rice millers as Mandi yards. This will ensure seamless procurement of paddy, which will start next week. The move has come as an effect of representations received from the Punjab Rice Millers and Exporters Association and PMB. The Punjab CM’s office tweeted that the move will aid farmers in getting reasonable prices from traders as exporters are the only purchasers of basmati. Bhartiya Kisan Union (BKU) Dakaunda General Secretary Jagmohan Singh said that government must not charge traders such high taxes. However, the government must take a particular portion of the profit as rural development cess.

Effect of Farm Ordinances

The Punjab Rice Millers and Exporters Association claimed that the farm ordinances had increased the disparity in fees charged by Punjab and other states. Haryana, Delhi, and UP have exempted market fees from agricultural produce, making Punjab economically unviable for rice exporters. The traders also complained that the trend of 4% plus tax would make it difficult for them to remain in business.

Haryana too Reduces Fees on Cotton and Paddy

In a meeting with the association of commission agents, Haryana’s CM also decreased market fees and rural development fees on cotton and paddy from 2% to 0.5%. Further, the state will clear labour dues to commission agents within 15 days of closure of procurement. Moreover, it will pay 12% annual interest on the rights in case of non-payment of licenses in the time limit.

In all, the three farm ordinances were accepted by UP, Haryana, Himachal. Hence, they issued new advisories like waiving the off-market fee and RDF with a user charge of just 1% for using state Mandis. However, the Punjab Assembly passed a resolution against it and maintained its stance of levying more than 6.5% taxes.

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