The Rajasthan government has recently made headlines for imposing a 2% Krishak Kalyan fees on the agricultural produce brought, bought or sold in mandis (local markets). The collected fee will directly go to the Krishak Kalyan Kosh, an initiative aimed at improving the welfare of farmers within the state. However, this move has sparked concerns among farming communities due to the fear that these additional costs may trickle down to them, especially when they are already facing financial difficulties due to the COVID-19 lockdown.
About the Krishak Kalyan Kosh
The Rajasthan government initiated the Krishak Kalyan Kosh in 2019 with an objective to provide fair prices to farmers for their produce and to facilitate “ease of doing farming”. Through an ordinance, it was outlined that the market committee would be responsible for collecting the Krishak Kalyan fee from licensees who bought, brought, or sold agricultural produce in mandis. This rate is determined by the state government, who maintains that the fee shouldn’t impose any burden on mandi-associated individuals or farmers.
Why the Krishak Kalyan Fees?
The reason behind levying this fee, as stated by the government, is to create a consistent revenue source for the Krishak Kalyan Kosh. Given that financial resources are limited, and bank loans taken for the same purpose need to be repaid, such a steady inflow of funds becomes essential. The government had previously procured loans to pay for the state’s share of insurance premium under the Pradhan Mantri Fasal Bima Yojana (PMFBY), which enabled farmers to receive insurance claims worth Rs 2,200 over the past 20-25 days amidst the coronavirus crisis.
The Implications of the Krishak Kalyan Fees
The newly instituted Krishak Kalyan fee is in addition to the existing mandi cess of 1.6% on the produce, making the total fee now 3.6%, a substantial increase compared to other states. This escalation can potentially trigger black marketing as farmers could be tempted to sell their produce outside the official mandi mechanism to avoid higher costs. Also, the prices that farmers receive for their produce in mandis are usually much lower than the Minimum Support Price (MSP). The introduction of Krishak Kalyan fee may lead to farmers receiving even lower prices for their agricultural produce.
In summary, while the Krishak Kalyan Fees initiative aims at improving farmer welfare, it might have unintended consequences due to the impact on already struggling farmers. Further assessment and consideration of these potential effects will be crucial to ensure the long-term success of the scheme.