Haryana basmati exporters seek lower market levies

Haryana, which accounts for more than half of basmati shipments from India, imposes arthia commission of 2.5%, market fee of 2% and rural development cess of 2%; these take the total burden to 6.5%.

In June last year, the Haryana government increased the market or mandi fee on basmati as well as the rural development cess from 0.5% to 2% each.

Basmati exporters from Haryana have asked for a reduction of levies such as mandi fee, rural development cess and arthia (agent) commission imposed on the purchase of paddy from the current collective 6.5%, to bring them on a par with those in other key producing states like Punjab, Delhi and Uttar Pradesh.

The levies are 3% in Delhi, Uttar Pradesh and Uttarakhand, 3.25% in Rajasthan and 4.5% in Punjab. Higher levies bite into the margins of basmati exporters in Haryana, forcing many traders and processors to procure paddy from Delhi and Punjab.

Haryana, which accounts for more than half of basmati shipments from India, imposes arthia commission of 2.5%, market fee of 2% and rural development cess of 2%; these take the total burden to 6.5%.

“Higher levies on basmati paddy procurement are not only impacting exporters and processors, but also dragging down earnings of farmers,” said Vijay Setia, former president of the All India Rice Exporter Association and a Karnal-based basmati rice exporter.

In June last year, the Haryana government increased the market or mandi fee on basmati as well as the rural development cess from 0.5% to 2% each.

The Haryana Rice Exporters Association (HREA) had written to chief minister Manohar Lal Khattar that rice millers should be provided a level playing field with exporters from other states to enable them to compete in the global market. It said many rice millers and exporters have closed their plants due to recurring losses.

Khattar had assured exporters to review the fees and other charges at mandis.

According to exporters, basmati harvest from this kharif season will start arriving in mandis by October 1. The Haryana government has to take a call on reducing levies soon, they said.

In 2021-22, India exported Basmati rice valued at $3.54 billion. Saudi Arabia, Iran, Iraq, Yemen, UAE, US, Kuwait, UK, Qatar and Oman had a share of close to 80% in total shipments of the aromatic long-grain rice from India in 2021-22.

Date: 23-Aug-2022
https://www.financialexpress.com/economy/haryana-basmati-exporters-seek-lower-market-levies/2640403/