Why India needs a land leasing framework

Predominance of small landholders in Indian agriculture:

• Predominance of smallholders demonstrates their importance in the agriculture policy landscape.
• As per the Agriculture Census 2010-11, there are 138 million farm-holdings in India, of which about 93 million are marginal (<1 ha) and about 25 million are small (1-2 ha).
• Even though small and marginal farmers account for more than 85% of total farm holdings, their share in operational area is only 41.2%.
• About 1.5-2 million new marginal and small farmers are added every year through break up of land for inheritance.

Other small farmers:

•  Also, agricultural landless labourers; pastoralists; fishermen and sharecroppers/tenants/lessee cultivators contribute to agricultural growth and deserve special attention.

 

PM KISAN ignores the landless:

• PM-KISAN (Pradhan Mantri Kisan Samman Nidhi) was launched as an income support scheme for small-holder farmers.
• However, the initiative does not cover landless agricultural labourers and the sharecroppers/tenants, especially due to unavailability of credible records.

 

Land reforms in India post-independence:

• The land reform legislations in post-Independence India consisted of:
  • Redistribution of surplus land from the rich to the poor
  • Abolition of intermediaries
  • Security of tenure to tenants (and tenancy regulations)
  • Consolidation of landholdings
• Land reforms in India have not been successful across several states, with the exception of Operation Barga in West Bengal.

 

More land reforms needed

1. Land leasing:

• While it is important to bring policies to raise land productivity through appropriate technologies, more land reforms are needed, including legalising land leasing.
• Enacting appropriate land leasing laws should be the highest priority of state governments.
• Recently, the NITI Aayog recognised that land lease should be viewed as an “economic necessity”, not mere “feudal agrarian structure”.

Benefits of land leasing

• Enhancing investment and farm efficiency:
  • With rising levels of income, the prices of agricultural lands are going up and, therefore, landless agri-labourers and small/marginal farmers can’t afford to purchase new parcels of lands.
  • Ensuring poor people’s access to the land lease market could prove to be a gamechanger for enhancing farmers’ income.
  • Enabling land leasing through a legal framework incentivises tenant cultivators to invest and conserve agricultural land resources, which, in turn, leads to increased land productivity and profitability.
• Improving credit flow to landless farmers:
  • The issue of lack of credit flow to lessee farmers/sharecroppers/tenants could be addressed by legalising land leasing, as land is often used by lending financial institutions as collateral for farm loans.
• Bringing more land under production:
  • The fear of agricultural lands falling into the hands of the sharecroppers after a specific period (due to restrictive clauses) has also led to large chunk of lands (as high as 25 million hectares, as per some estimates) remaining fallow in the country.
  • Clear land leasing laws will bring this land under production.

Diverse land leasing laws across India:

• The existing legislations on land leasing are diverse and complex across the states.
  • Those that allow leasing: There is no legal ban on leasing in a few states viz. Andhra Pradesh, Tamil Nadu, West Bengal and Rajasthan.
  • Those with laws in line with the model law: Few states like Madhya Pradesh, Maharashtra and Uttarakhand have implemented land leasing legislations after making suitable modifications to the proposed model law.
  • Leasing permitted for only some: There are few states like Odisha, Karnataka and Uttar Pradesh, where specific persons/institutions (armed forces personnel; privileged raiyats) are permitted to lease out their agricultural lands.
  • Those in process of legalizing: States like Odisha and Uttar Pradesh are considering amendments to their existing revenue laws to legalise land leasing.

Model Agricultural Land Leasing Law:

• The existing legislations on land revenue matters are diverse and complex across the states.
• NITI Aayog has brought out the model Agricultural Land Leasing Act in 2016.
  • This model Act doesn’t specify the rent on leased land and the period of lease and has rightly left it to the concerned parties without any interference from the government.
• The committee on Doubling Farmers’ Income (DFI) of the Government of India has also recommended legislating it to ensure private sector investments in agriculture.

 

1. Digitisation of land records

• Another important aspect of land reforms is ensuring effective modernisation and digitisation of land records.
• The computerisation of land records, land-property transactions and the registration processes have not been achieved in land revenue administration so far.
• The process of mutation and updating of land records has been slow in many states.
• The poor maintenance of land records and slow pace of digitisation of land revenue administration is negatively impacting agriculture.
• A massive upgradation of land records and existing processes through computerisation, capacity building of stakeholders and amending the appropriate land laws is needed.

Use of technology for this:

• High resolution satellite imagery coupled with ground truthing has also been suggested for the survey operations.
• Aadhaar provides a perfect tool to assist the ongoing process of modernising land records to validate land assets.

Will help farmers also:

• Police records in many Indian states show that land disputes are the reason behind a sizeable chunk of cognisable offences (as high as 40% in Bihar). An updated record of ownership would help farmers avoid land-related litigations.
• Clear land titles will also enable farmers access to credit as well as government benefits like the recently launched PM-KISAN.

 

Conclusion:

• Ensuring food and nutrition security and tackling the looming threat of climate change makes land reforms necessary.
• A land reforms agenda, particularly the land leasing legislations and updated land records, should receive the highest priority to increase incomes of smallholders, tenant farmers and sharecroppers.