Date:21/12/2005 URL: http://www.thehindubusinessline.com/2005/12/21/stories/2005122102691900.htm

Back High mandi tax: Karnataka solvent extractors facing oilseeds shortage

Our Bureau

Bangalore , Dec. 20

SOLVENT extracting units in Karnataka are faced with shortage of oilseeds resulting in reduced capacity utilisation and loss in revenues. A high Mandi (marketing yard) tax of 1.5 per cent on oilseeds has forced the farmers to sell their produce to neighbouring States resulting in lower availability for the crushing units.

According to the Solvent Extractors' Association of India, the Karnataka farmers sell more than 50 per cent of 16.9 lakh tonnes to Maharashtra and Andhra Pradesh, whose levy of only 0.75 per cent offers better realisation to them.

Though the association has represented its case to the State Chief Minister and the Agriculture Minister, it has not received any relief so far.

As the solvent extractionplants across the country are operating on a thin margin, the higher Mandi tax makes it difficult for the extractors to offer good prices to the farmers, the association said in a statement.

Karnataka has 30 solvent extraction plants with a total crushing capacity of 12 lakh tonnes a year. Due to the supply shortage of oilseeds, currently only less than 50 per cent of the overall capacity is being utilised leading to a threat of closure of many plants.

Karnataka is also losing an estimated Rs 50 crore in revenues by way of sales tax as the produce is being sold outside the State. Besides, the diversion of oilseeds to neighbouring States has also reduced the earnings from Mandi tax, the association said.