UP setting up private agricultural mandis in bid to double farm exports

At present, bulk of produce is sold through 251 govt-run mandis across 75 districts. Total transactions on these notified 'mandis' stood at Rs 67,000 cr in 2018-19

The Adityanath government is setting up private agricultural ‘mandis’ in Uttar Pradesh as it aims to double the state's farm exports from the current level of Rs 17,600 crore by 2024.

At present, the bulk of the agro marketing is done through 251 government-operated mandis across the states's 75 districts. These notified ‘mandis’ had clocked total transactions worth nearly Rs 67,000 crore in 2018-19.

According to UP Mandi Parishad director Jitendra Pratap Singh, about a dozen private mandi applications had already been filed with the department and were being processed.

“The government has also received vital feedback from industry players seeking further rationalisation of the Mandi tax structure, which is under active consideration for creating a more conducive business environment,” he told Business Standard.

UP ranks among the country’s top agricultural and horticultural producers, with its annual food grain production standing in excess of 50 million tonnes (MT).

Last year, the Adityanath government had approved an amendment to the UP Agriculture Produce Marketing Committee (APMC) Act, 1964, allowing the operation of private ‘mandis’. The amendment had allowed companies to set up procurement centres outside the periphery of existing mandis for effecting the direct purchase of produce from farmers.

This was aimed at widening the procurement basket and providing more remunerative prices to farmers.

Singh said the Mandi Parishad had earned Rs 1,823 crore by way of taxes and levies in 2018-19, compared to Rs 1,211 crore in 2017-18, an increase of over 50 per cent, despite foregoing about Rs 50 crore in taxes on desi ghee. “In the current fiscal, we are estimating our earnings to touch Rs 2,172 crore.”

On September 10, the Adityanath government had announced its maiden agricultural export policy, aimed at augmenting farm income. The policy is projected to create an institutional mechanism for agro exports, promoting export-oriented commodities and encouraging the cultivation of environmentally-friendly agricultural varieties.

With the help of the new agro-export policy, the state is targetting to double the export of agricultural commodities over the next five years with the help of farmer producer organisations (FPO).

The state agri export policy would promote cluster farming of export-oriented commodities over an area of at least 50 hectares by giving sops. For example, the state would provide a subsidy of maximum Rs 10 lakh for a cluster of 50-100 hectares during 5 year period, with 40 per cent amount to be provided in the first year itself.

Since UP is a landlocked province, the state government has also decided, under the farm export policy, to provide transport subsidy for export consignments. Eligible agro commodities would be given Rs 10/kg and Rs 5/kg as export subsidy for air and sea transport respectively.