Punjab offers incentives to rice millers from outside of state

The Punjab government has agreed to give incentives to rice millers from outside of state by slashing local levies in an effort to encourage buyers to buy basmati crop which is staring at "glut" position in the wake of high acreage.
Punjab Chief Minister Parkash Singh Badal today announced slashing market fee and rural development fund by one per cent each on basmati crop in order to motivate buyers from outside of state for purchase of basmati, said an official spokesman.
The Market Fee and Rural Development Fee would be charged at one per cent each against two per cent each charged earlier from buyers outside Punjab, said the spokesman.

At present, Punjab charges market fee and RDF at two per cent each, besides infrastructure cess of three per cent and VAT of five per cent on foodgrain.
However, basmati exporters could claim VAT refund and there will be no infrastructure fee on basmati purchase.
"The incentives will be meant for rice processors or millers of Haryana for export purpose only," Punjab Agriculture Minister Tota Singh said here.

Singh said Haryana requires paddy as they have surplus milling capacity and these incentives will encourage them to enter Punjab market for the purpose of buying crop.
This decision comes after discussions were held with rice exporters from Haryana who were demanding incentives on par with Punjab in order to buy basmati crop from there.

Punjab basmati growers have been complaining about not getting remunerative rates this season similar to what crop prices prevailed last season. Growers in Punjab had accused even "unscrupulous" traders of lowering crop prices by forming cartel.
Basmati crop in Punjab is fetching Rs 2,100 to Rs 2,400 a quintal as against Rs 2,800 to Rs 3,000 a quintal recorded at the time of arrival in grain markets. Notably, in neighbouring Haryana also, basmati prices are higher by Rs 300-400 per quintal than prices ruling in Punjab.
The state government also apprehended that market price of basmati would be lower than the previous year, as a result, the government should encourage more buyers so as to ensure remunerative prices to farmers, said the spokesman.

Problem arose for paddy growers of Punjab as area under basmati crop surged by 55 per cent to 8.62 lakh hectares this year, creating a "glut like" situation in the state.
With around 30 per cent of total paddy area being under basmati, its output is expected to reach 34 lakh tonne as against 22.65 lakh tonnes recorded last season.
The Punjab government has also decided to continue with the policy of giving incentives to state rice millers on purchase of basmati crop.
The state government had last year waived market fee (two per cent), RDF (two per cent), infrastructure cess (three per cent) on purchase of basmati in order to push crop diversification in the state.