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Uttar Pradesh ushers in agri reforms, waives mandi tax for 46 fruits, veggies

This effectively eliminates the role of middlemen and allows farmers to sell their produce directly to consumers and traders outside the mandi yard. (File image)

In its first major move to usher in reforms in agri marketing space and promote farm-to-fork initiative, the Uttar Pradesh cabinet on Wednesday approved an ordinance de-listing 46 fruits and vegetables from the provisions of the APMC. This effectively eliminates the role of middlemen and allows farmers to sell their produce directly to consumers and traders outside the mandi yard.

By doing this, the government has not only done away with the condition of farmers bringing their produce to state mandis, but has also exempted them from paying the mandi tax. Farmers will now be free to sell these 46 commodities directly to food processing units and consumers at the farm itself and also sell their produce through the digital platform e-NAM and need not pay any tax. This would not only save them from paying the mandatory 2% mandi tax, but would help them reduce around 15% losses incurred in loading and unloading of their produce at the mandis. Besides, they would also save the transportation cost incurred in taking their produce from their fields to the mandis.

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Agriculture minister Surya Pratap Shahi said the move was aimed at decongesting the mandis in view of the Covid-19 and would also help farmers enhance their income. “Now, licensed traders or common consumers can buy products from farmers outside the premise of mandis and farmers will be free to sell their products to food processing units or to anyone.”

He said the Cabinet also gave the nod for the proposal for permitting warehouses, silos, cold storages to set up farmers-consumer platform and realise user charges from traders for using the places as sub-mandi. “We have also taken steps to develop farmer consumer markets, which will allow vegetable growers to sell their produce at new small markets near their fields and villages.”

The state’s move comes in the backdrop of the Centre’s April 4 directive to states, asking them to facilitate direct purchase of farm produce by big retailers, aggregators and food processors. The idea behind the move is to unshackle the farmer community hit hard by the current lockdown from the fetters of the agricultural produce market committees (APMCs) that control mandis. While most states have already de-listed fruits and vegetables from the purview of APMCs, Uttar Pradesh is probably the last major state to do so.

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