Pending agri reform

Even though the government’s recent game-changing moves to open up agricultural marketing and formalise contract farming are being likened by some to the economic liberalisation of 1991, the process of agricultural reforms is far from complete. A critical big-ticket land sector reform — the legalisation on land leasing — is still pending. Besides, analysts have noticed some loopholes in the reforms-oriented Ordinances, which need to be addressed to enable them to deliver the desired results. Fortunately, the task at hand is not too difficult. The issues concerning the Ordinances can be taken care of in the laws to be passed by Parliament to replace them, or the rules to be framed under these laws. The ratification of land leasing will, however, require the cooperation of the state governments, which the Centre will need to seek through persuasion. 

Legalisation of land leasing has been a part of the agricultural reforms agenda laid down by the official think tank, the National Institution for Transforming India (NITI) Aayog, during the first term of the Narendra Modi government. This has subsequently been endorsed by the high-level committee on doubling farmers’ income, headed by an agriculture ministry official Ashok Dalwai, in its report submitted to the government last year. A valid land lease market is, in fact, believed to have become an economic necessity for the small farmers who want to either rent out their fields to quit farming or hire more land to make their holdings viable. At present, leasing of agricultural land is either banned or severely restricted in most states. Only some states allow selected individuals — such as disabled people, widows or armed forces personnel—to let out their lands. As a result, many tiny land parcels and land holdings of migrant farmers, cumulatively amounting to a sizable part of the cultivable land, remain unutilised because the landholders do not lease them out for fear of losing the ownership rights. 

Legal validation of land leasing, more importantly, is imperative to undo the gross injustice done to tenant farmers and share-croppers by denying them compensation for crop damages and access to cheap bank loans and other government subsidies and doles, such as the direct income support through annual cash transfer of Rs 6,000 per hectare. Tenurial security, on the other hand, will incentivise tenant cultivators to invest in land improvement and crop yield-enhancing measures to raise their income. 

A NITI Aayog-appointed committee headed by the former chairman of the Commission for Agricultural Costs and Prices, T Haque, has already drafted a model land leasing Bill to serve as a guide for the states to amend their land laws. Several states are said to be favourably inclined to reform their land-related statutes, yet concrete action has not been forthcoming in this field. Unlike the vexed land acquisition law, which faced stiff resistance from farmers who did not want to be uprooted from their ancestral lands, the mooted land lease statute is non-controversial as it does not affect land ownership. All that the Centre needs to do is nudge the states to make the necessary provisions in their laws for leasing of land. There is, thus, no reason for further delay in carrying out this vital farm sector reform that can potentially help the rural poor move out of poverty.

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