UP Mandi Fee & Cess Exemption for Direct Farm-to-Processor Sales — Frequently Asked Questions

It removes the Mandi fee and cess that would normally be charged when farm produce changes hands. A farmer in Uttar Pradesh who sells directly to a processing unit pays nothing on those two heads for that transaction. The waiver covers 100% of the applicable charges, and no ceiling on it is mentioned in the policy.

The benefit is written for farmers and agricultural producers operating in Uttar Pradesh. The sale has to be a direct one to a processing unit — a grower selling to a processor, rather than through a commission agent or another intermediary. Both smallholders and large cultivators are covered, and no landholding size requirement is stated.

It equals 100% of the Mandi fee and cess on qualifying transactions, so the rupee value depends on the scale of the sale and the rates that would otherwise be charged. That is why the programme is listed with an amount that varies, and no upper limit is given.

No. This is a rolling benefit that remains open. It forms part of the Uttar Pradesh Food Processing Industry Policy 2022-2027 and is not tied to a fixed submission date or a closing application window.

Neither. This is a fee exemption, so there is no equity dilution and nothing to pay back. It is classified as a subsidy, with regulatory support as an added dimension, rather than an investment or a loan.

The policy does not list DPIIT recognition or MSME registration as a condition for this exemption. Eligibility rests on being a farmer in Uttar Pradesh and completing a direct sale of produce to a processing unit.

The policy speaks in broad terms — "agricultural produce" sold to a "processing industry" — rather than naming individual crops or processing categories. The emphasis is on strengthening the agri-food supply chain within Uttar Pradesh, so the coverage is wide by design.

Begin by reading the Uttar Pradesh Food Processing Industry Policy 2022-2027. Then identify a processing unit in the state that buys farm produce directly from cultivators, enter into that direct sale arrangement, and submit the documentation the state's agricultural or industry department requires as proof of a direct sale. Applications are handled through the state's single-window portal at https://niveshmitra.up.gov.in/. Every transaction has to comply with the policy guidelines to qualify.

Skipping intermediaries can mean a better price for the crop, a shorter and more transparent chain of trade, and steadier demand — a processor that buys raw material regularly gives the farmer a predictable outlet. Combined with the fee waiver, direct selling becomes more profitable than the conventional route through the mandi.

No. It is a policy of the Uttar Pradesh government, so the produce has to be sold within the state to a processing unit there, and the farmer claiming the exemption must be operating in Uttar Pradesh.

UP Mandi Fee & Cess Exemption for Direct Farm-to-Processor Sales is offered by Government of Uttar Pradesh, a government body. It is provided as non-dilutive funding.

Apply directly through the official application link on this page. Review the eligibility criteria and prepare your startup documents before you begin.