Supply Chain Council of European Union | Scceu.org
Procurement

32% of FCI’s FY21 wheat procurement cost to be mandi taxes, middlemen fee


As the debate rages on the impact of high mandi taxes on the finances of the (FCI), the data available with the Commission for Agriculture Costs and Prices (CACP) — the body that fixes minimum selling price (MSP) of crops — shows that arthiya (middlemen) com­mission and mandi taxes are expected to account for 32% of the total procurement incidentals of FCI in the 2020-21 season that began in April. Procure­ment incidental of FCI is part of the economic cost of procuring foodgrain.


The other components are poo­led cost of grains and distribution cost that includes freight, handling, and storage, etc. Data of past five years shows while the economic cost of wheat increased at an annual growth rate of 4.9%, the distribution cost reco­rded the highest growth of 7.2%, followed by pooled cost of grains (5.7%), and the lowest (1.2%) was procurement incidentals.



Increase in pooled cost of grains is due to a rise in MSP of wheat and lower growth rate in procure­ment incidentals is due to reduction in statutory charges after introduction of the goods and services tax.


However, these charges are still high in some states, a CACP report said, and there is a need to reduce procure­ment incidentals by reducing mandi fee and other char­ges in states such as Punjab and Haryana, the report said.

chart


Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Related posts

Working towards clean future- The New Indian Express

scceu

Small Pharma Reports Fiscal Second Quarter 2023 Highlights

scceu

Thinfilm Updates Solid-State Battery Manufacturing Progress Oslo Stock Exchange:THIN

scceu