The Punjab government on Tuesday announced to reduce the market development fee (MDF) and the rural development fee (RDF) on basmati crop from 2 per cent to 1 per cent each. The move is aimed at providing a level-playing field for basmati traders and keeping the crop competitive in the international market.
It will provide relief to the tune of Rs 100 crore to basmati traders and millers, according to an official spokesperson. However, the change comes with the caveat that no refund of any fee will be allowed to any paddy/rice dealer, miller or trader for export of the basmati to other countries from the state.
Chief Minister Amarinder Singh's announcements came in response to a proposal of the Punjab Mandi Board, and were made after thorough examination of the representations received from the Punjab Rice Millers and Exporters Association and the Punjab Basmati Rice Millers and Exporter Association, according to a government release. The associations had submitted that the disparity in fees and other charges among the Basmati-producing states would be around four per cent, thus making the rice industry in Punjab economically unviable.
They said it would be difficult to compete with rice exporters in Haryana, Delhi and Uttar Pradesh, which had totally exempted the market fees from agricultural produce. They also said Punjab-based exporters would not be able to cover the additional cost of tax, which is four per cent, thus making it difficult for them to remain in business.
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