Land leasing needs a sound law

Abrogating the ceiling on agricultural holdings and legalising land leasing are the two reforms that the farm sector vitally needs. While land ceiling has lost its relevance because most large holdings have already been divided and fragmented into smaller pieces on being passed on to succeeding generations, legal validation of land leasing is imperative to ensure jurisdictional security to both landowners and tenants. Only a statutory regime that safeguards the rights and interests of both proprietors and tenants can check further shrinkage of operational holdings, most of which have already become too small to be economically viable.

The concept of imposing limits on land ownership and acquiring surplus land for allocation to landless people, in fact, seldom served its intended objective of equitable distribution of farmland. This was partly because of a lackadaisical enforcement of the ceiling laws, but largely due to landowners exploiting the wilfully incorporated loopholes in these statutes. The much-needed political will to implement this measure has also been missing in most states. With the size of operational farms having now contracted substantially, even the context for putting a cap on land ownership has ceased to exist.

According to the National Sample Survey of 2018-19, fewer than 200,000 farmers, constituting merely around 0.1 per cent of rural households, now own more than 10 hectares. Over 85 per cent of Indian farmers fall in the category of small and marginal farmers, possessing less than 2 hectares each. The average size of farm holdings has dwindled to merely 1.1 hectares, which is too small to offer a decent living for a normal household.

Most of the small and marginal farmers, therefore, need to take more land on rent to supplement their income. But in the absence of official recognition of tenancy, they are forced to do so informally, mostly through unwritten or oral agreements, which have no legal sanctity. Such arrangements do not offer any long-term security of possession of land, and there is no incentive to invest in land improvement measures such as levelling land, installing tube-wells, or reclaiming saline or other kinds of problematic land. Besides, many landowners who have given up farming for various reasons turn wary of renting out their land for fear of losing ownership. There are also legal provisions in many states to grant ownership to tillers of land after a stipulated time frame. This results in numerous pieces of land remaining unutilised rather than being given on lease to others for cultivation. Besides, many small farmers who intend to expand their operational holdings by taking more land on rent are needlessly denied the opportunity of doing so.

Legislating land leasing is necessary also for a host of other reasons. For one, it is required to make tenant-cultivators eligible for benefits under various farmers’ welfare programmes of the central and state governments. Even the Pradhan Mantri Kisan Samman Nidhi scheme, under which Rs 6,000 is given annually in three instalments to every farmer, is applicable only to title-holders of land. The tenants are not entitled to it even if they are the tillers of that land. Most other subsidies, paid as direct benefit transfer, too, are denied to the tenants and are given to the landowners, regardless of whether they are the actual tillers of land or just absentee-landlords who have migrated to cities for paid employment.

This apart, the present land laws in most states are highly restrictive in nature. In Kerala, for instance, land leasing is virtually prohibited. A number of other states allow only select categories of landholding individuals, such as the armed forces personnel, widows, the differently-abled, minors, or the imprisoned to lease out their land. These states include Himachal Pradesh, Uttarakhand, Bihar, Jharkhand, Odisha, Telangana, Karnataka, Madhya Pradesh, and Uttar Pradesh. In some other states, the owners do not receive their entire land back after the end of the lease tenure. Some states have capped rents to be charged on the land leased out, making land leasing unattractive. All such curbs hamper the development of a healthy land-leasing market.

The need for legitimising land leasing has been felt for a long time. The Centre had circulated to the states a model land leasing Act, prepared by a committee set up by the NITI Aayog way back in 2016, to serve as the guide for amending their local land laws. This draft sought to protect the genuine interests of both landowners and tenants to create an environment conducive for the emergence of a vibrant land-leasing market. It also sought to incentivise investment in land improvement measures. The overarching aim was to make farm holdings economically viable. However, not many states took this model law seriously. Fresh initiatives by the Centre are, therefore, called for to spur the states to accord this issue the priority it merits.

 

surinder.sud@gmail.com