In raisin business, Maharashtra risin', Karnataka losin'

Bitter sweet

Bijapur district is one of the highest producers of grapes and raisins, but high taxes - both value added tax (VAT) and the APMC cess - have forced grape growers to sell the raisins in neighbouring Maharashtra where the taxes are much less.

This year, there has been a bumper crop of grapes and the production of raisins has also been high. The State imposes VAT at the rate of 13.5 per cent and an APMC cess of 1.5 per cent and the total taxes come to around 15 per cent.

“If we sell the produce in the State, the traders pass the tax burden on us, thereby denting our profit. Hence, growers are selling their produce in the markets of Maharashtra,” said Somanath Bagalkot, a progressive grape farmer.

Also, Maharashtra beats the State in the number of cold storage units. While there are more than 50 cold storage units in and around Sangli of Maharashtra, the number in Bijapur district is a mere 13. Thus, the neighbouring State provides a double advantage for grape growers.

“We had submitted a memorandum to Chief Minister B S Yeddyurappa seeking a cut on the taxes imposed on raisins, but to no avail. The State government is under the wrong impression that a slash in taxes benefits the traders,” said K H Mumbareddy, honorary secretary of the Karnataka Grape Farmers Association.

Mumbareddy said that with growers selling their produce outside the State, there has been no business in the local market, thereby reducing the revenue for the State drastically. Maharashtra imposes no tax on grapes and the APMC cess there is as low as 0.1 per cent. It is for this reason that growers flock to the APMC yards in the neighbouring State to sell their produce.

In contrast, small and marginal grape farmers of the State are selling their produce in the black market only to be exploited. Needless to say, the black marketeers do not pay any tax to the government, said Vithalgowda Biradar, president of the Horticulture Co-operative Society.

Growers in the State are also buying the raw materials for grape cultivation in Maharashtra itself. The farmers are demanding that Karnataka, which is providing subsidised power for irrigation pumpsets, should extend the subsidy for the electricity to run grading machines also, instead of the commercial rates that are being imposed at present, said Somanath Bagalkot.

APMC sources in the district also confirmed that all grape farmers were selling their ware in Maharashtra