Reforms that turn the land market dynamic could rescue owners of small farms from their trap of poverty
An important reform announced earlier this month by the Karnataka government is little known, but will improve the land market and help farmers in the state. The cabinet has decided to open the land market by allowing non-agriculturists to purchase agricultural land, remove income restrictions imposed on the buyers’ non-agricultural income (currently ₹25 lakh), and increase the maximum permissible size of holdings by an individual or family (from 10 to 20 units) and by larger families (from 20 to 40 units). The government plans to amend the Karnataka Land Reform Act, 1961, in the next legislative session to reflect these changes. This is a long due and welcome change. It will push the agricultural land market in the state from a thin one to a thick one, and help farmers trapped in low- productivity agriculture exit. Other states must follow Karnataka.