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Business News/ Politics / Policy/  Model land leasing law getting ready
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Model land leasing law getting ready

In the next two months, an expert group under NITI Aayog, plans to finalise the law, which could free up the market for leasing farm land in India

The model act will be limited to leasing of land for farming purposes and will not propose either rentals or change existing land ceiling acts in different states. Photo: Pradeep Gaur/MintPremium
The model act will be limited to leasing of land for farming purposes and will not propose either rentals or change existing land ceiling acts in different states. Photo: Pradeep Gaur/Mint

New Delhi: The provisions of a proposed model law will make it easier for owners to lease out their farm land and give tenant farmers access to agricultural loans and insurance.

In the next two months, an expert group formed in August under NITI Aayog, successor to India’s Planning Commission, plans to finalise the law, which could free up the market for leasing farm land in India. States will be free to chart out their own acts based on the broader structure of the model law.

“We had a meeting with all the state chief secretaries (end August) and the committee members will again meet on 16 October to give this a concrete shape," said T. Haque, chairman of the expert group and former head of the Commission for Agricultural Costs and Prices.

India has 140 million farm holdings and around 10% of these are farmed by tenant farmers, who stand to benefit from the model act.

“Right now, land leasing is not allowed in states like Kerala and in most states, laws are structured in such a way that both landlords and tenants are facing problems," said Haque.

“While land owners are scared to lease out land and keep changing tenants due to fear of losing possession, tenant farmers cannot avail of benefits of government schemes. The model act will allow land owners who are not interested to continue with farming to rent it out to tenants," he added.

The model act will propose formal recognition for tenant farmers. This will help them avail of credit and insurance facilities and sell their produce at the government’s support prices, much like regular land-owning farmers.

The model act will be limited to leasing of land for farming purposes and will not propose either rentals or change existing land ceiling acts in different states.

The tenant farmer will be able to invest in the land and improve its agricultural efficiency if he has a proper agreement with the land owner, Haque said.

Sanjoy Patnaik, India director at Landesa, a global non-profit working on securing land rights, welcomed the plan. “Protecting the rights of tenant farmers and landlords through liberalizing agricultural tenancy restrictions could be one significant move to ensure that our vast farm lands are not lying uncultivated, and our farmers are not forced to migrate to cities as construction labourers," Patnaik said.

Further, it will increase the tillers’ access to land and ensure increased productivity in agriculture, Patnaik added.

To implement its core proposal that land leasing should be liberalized and legalized across states, the committee also plans to hold campaigns across states and at the village level.

“The aim will be to engage both landlords and tenants and convey to them that they can enter into a legal arrangement which will be beneficial for both," Haque said.

He said this may help in identifying beneficiaries for direct benefit transfer (DBT) of fertilizer subsidy due to better land records after the act is implemented. As reported by Mint, the government is right now struggling to implement fertilizer DBT due to problems in identifying the beneficiary.

The expert committee on land leasing consists of top representatives from seven states including Andhra Pradesh, Uttarakhand, Punjab, Maharashtra, Rajasthan, Assam and Meghalaya, besides officials from the rural development ministry and the Aayog.

In a NITI Aayog blogpost published on 13 July, vice-chairman Arvind Panagariya argued that state governments must seriously consider revisiting their leasing (and land use) laws... “to enhance productivity and welfare all around." He observed that introduction of transparent land leasing laws that allow the potential tenant or sharecropper to engage in written contracts with the landowner is a win-win reform.

A committee headed by former food minister Shanta Kumar, which submitted its report in January, recommended that farmers should be given direct cash subsidy (of about 7,000 per hectare) and that the fertilizer sector can then be deregulated. For FY16, the budgetary outlay for fertilizer subsidies routed through manufacturers is 72,969 crore. At present, manufacturers sell fertilizer at a subsidized rate to farmers and realize the amount from the government.

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ABOUT THE AUTHOR
Sayantan Bera
Sayantan is a National Writer with the Long Story team at Mint, covering food and nutrition, agriculture, and rural economy. His reportage is based on granular ground reports, tying it with broader macroeconomic realities, with a sharp focus on people and livelihoods. Beyond rural issues, Sayantan has written deep dives on topics spanning healthcare, gender, education, and science.
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Published: 08 Oct 2015, 12:01 AM IST
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