Context: Recently, Rajasthan government is levying a 2% Krishak Kalyan fees on agricultural produce brought or bought or sold in mandis and the fees collected will be deposited in the Krishak Kalyan Kosh which is dedicated to the welfare of farmers in the state.
Background

• The Rajasthan government had announced the creation of the Krishak Kalyan Kosh for the purpose of ensuring fair price for farmer’s produce and to strive towards “ease of doing farming” in 2019.

Key Points

• Through an ordinance, the government stated that the market committee shall collect Krishak Kalyan fee from the licensees in the prescribed manner on the agricultural produce brought or bought or sold by them in the market area (mandi) at such rate as may be specified by the state government.
• The government has insisted that the money collected as Krishi Kalyan fees will be spent on the welfare of farmers.
• The fee will be a burden neither on the people associated with the mandis nor the farmers. This charge is meant for the next point of sale, after farmers sell their produce.
• This money collected will actually benefit them as it will be spent for their welfare. The entire money will be used on ensuring that the farmers get adequate price and providing them other incentives.

Concerns

• Farmer outfits are apprehensive that people at agricultural mandis will pass on the burden of the increased cost to farmers, already reeling by the lockdown imposed due to the coronavirus.
• It may result in farmers getting less prices for their agricultural produce, traders incurring losses because of people choosing to sell the produce to black marketers, and agriculture produce from Rajasthan being sold outside the state.
• There is already mandi cess of 1.6 per cent on the produce. This 2 per cent fees will increase it to 3.6 per cent, which is much higher than other states. This increased cess will encourage black marketing.