The State government’s decision to reduce market cess on the sale of agri-produce at Agricultural Produce Market Committee (APMC) yards from 1.5% to 0.35%has created fissures within the trader community. While many have announced a withdrawal of the strike in south Karnataka, the APMC Action Committee based out of Hubballi held a meeting of merchants from central and north Karnataka on Saturday and announced that they would go ahead with an indefinite strike from Monday.
The government recently promulgated the Karnataka Agriculture Produce Market Committee (Amendment) Ordinance, 2020, which essentially annulled the restriction on wholesale trade in agricultural produce to APMC yards and allowed private players to set up markets elsewhere — a move opposed by farmers’ unions and APMC merchants alike. Merchants have argued that they were put at a distinct disadvantage against merchants outside the yard as they had to pay 1.5% market cess on the sale of agri-produce that is passed on to buyers. Demanding a level playing field, merchants threatened to go on an indefinite strike from Monday.
Meanwhile, S.T. Somashekhar, Minister for Cooperation, announced that after negotiations with stakeholders, the government had decided to reduce the market cess to 1%, and further representations from merchants had convinced it to slash it again to 0.35%.
The Federation of Karnataka Chambers of Commerce and Industry (FKCCI), in a statement issued on Sunday, welcomed the move. “We are ready to compete with private players, but we naturally want a level playing field. We had demanded that the market cess be completely cancelled and a service tax of 0.2% for maintenance of markets be imposed. The government has substantially reduced the cess to 0.35%, which we welcome. We have called off the strike,” said Ramesh Chandra Lahoti, president, APMC Committee, FKCCI. He said the Yeshwantpur APMC yard in Bengaluru city would function normally on Monday, even as other markets that had already gone on strike, such as in Shivamogga, would also be open for business.
Many demands
However, Shankaranna Munavalli, president of the APMC Action Committee based out of Hubballi, said abolition of market cess was just one of their demands, and that was only partially met. “We want the same law to be applied on transactions done inside and outside APMC yards,” he said.
For instance, merchants have to procure and renew permits for doing business in the yard — a process that is mired in red tape and which increases the expenses of merchants. “We don’t want any of the permits to be applied only on APMC merchants. We want the government to ensure a level playing field and save APMCs and small farmers dependent on them,” he said.
Meanwhile, farmers’ unions that have opposed the APMC ordinance have criticised the stand taken by APMC merchants as “self-serving”. “Deregulation of agriculture marketing is more a farmers’ issue. Merchants were also affected and were fighting with us. But they have now been self-serving, myopic and have failed to stand by the farmers. Just reduction of cess will not save the APMC yards, which are facing an existential crisis now,” said G.C. Bayya Reddy, State convener, All-India Kisan Coordination Committee.
“The recent ordinances brought about by the Union government, which was followed by that in the State, will pave the way for corporatisation of agri-marketing, which is detrimental to the interests of farmers. In APMC yards, the produce is at least auctioned, while farmers will have to sell their produce at prices fixed by the corporates in private markets,” he said.
The committee has decided to stage protests in front of all taluk offices in the State on August 9 as part of a national campaign demanding ‘corporates quit agriculture”, to mark the anniversary of the Quit India Movement.