Punjab reduces market and rural development fee from 2% to 1% for basmati

CHANDIGARH: Punjab Government on Tuesday announced a reduction in the Market Development Fee (MDF) and the Rural Development Fee (RDF) rates, from 2 per cent to 1 percent each thus 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.

"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 had also pleaded that Punjab-based exporters would not be able to cover the additional cost of taxes, which is 4 per cent 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, UP 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 per cent to 1 per cent usage charges and 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.