Liberalising land leasing necessary for growth, says Tajamul Haque

The past 10 months have shown signs of a large agrarian crisis. Tajamul Haque, a former chairperson of the Commission for Agricultural Costs and Prices, tells Bhasker Tripathi that land leasing is the answer — if the model law is implemented by states across India it can benefit all stakeholders.

What does the Model Agricultural Land Leasing Act prescribe? How would it help tenants?

The Act is intended to liberalise and legalise the land leasing system in the country. Most of the states passed their tenancy laws in the 1960s and 70s, which were highly restrictive. Some of the states banned leasing altogether. For instance, Kerala and Jammu and Kashmir do not allow land leasing. Other states like Bihar, Uttar Pradesh, Chhattisgarh, Karnataka and Himachal Pradesh allow only certain categories of people to give land on lease, for example the disabled, widow, minors, etc. Karnataka does not even allow these categories of people to lease out their land, the state only allowed people in services, for instance: soldiers, to lease their land.

In Andhra Pradesh, Punjab, Haryana and Gujarat, the governments have not banned leasing but at the same time, there are certain provisions in these states which make the option of leasing as good as prohibited. For example, in Andhra Pradesh, if an owner wants to end leasing and take the land from the tenant for personal cultivation, then the owner will have to leave at least 50 per cent of the land with the tenant. Now, no owner would want to lease the land with these restrictions. Similarly, some states prescribe that if a tenant has been cultivating the land for more than the prescribed period of time, the tenant then has the right to occupy the land. The Zamindari Abolition Act of Uttar Pradesh [intended to remove an oppressive land-leasing system], for instance, also had a possession clause which said that if a tenant continued to cultivate a piece of land for over 12 years, s/he would be eligible to occupy that land. These clauses instill a fear in the owner’s mind against the leasing of land.

As a result, people let their land remain fallow, which affects the agricultural productivity of the country. Currently, 25 million hectares of land in the country are lying fallow largely because owners are not leasing them out due to restrictive clauses. If you assume that one hectare produces two tonnes of grain, with 25 million hectares lying fallow, the country is losing 50 million tonnes of grain.

So with the Model Land Leasing Act, we tried to remove all these restrictions. If an owner, out of lack of interest, lack of money to invest or other reasons, does not want to cultivate the land, s/he can choose to lease it out to some landless cultivator and benefit from the rent rather than keeping the land fallow for fear of losing it.

The tenant and the owner can mutually agree upon the rent and period of leasing and come up with a written contract, which should be attested by a person in a position of responsibility — such as the gram pradhan (village head), an advocate or a revenue officer — to make the leasing legal. They need not go to any revenue office or administrative department.

This formal signed document will do two things; first, it will assure the owner that the land is safe. Second, it will make a tenant-farmer eligible for government subsidies, insurance, disaster relief and credit schemes, because for the first time the tenant will have a document to prove that s/he is cultivating the land.

Tenant farmers have long been denied the right to even sell their farm produce in government agricultural produce markets where they can get better prices; they have to go through intermediaries and end up losing a lot of their profits. Now, if tenancy is legalised through a contract, the tenant farmer would be able to sell in these markets.

The Model Land Leasing Act, if applied, will not only help increase the income and productivity of tenant farmers’ land significantly, it will also help overall agricultural growth while helping the government double farmers’ income.

How many states have adopted the Model Law or amended their land laws on the lines of the Model Law?

Uttarakhand and Uttar Pradesh have amended their land laws. Uttarakhand has done it quite comprehensively, whereas Uttar Pradesh has just deleted the clause which allowed the tenant to occupy land after operating on it for more than 12 years. It has also included a range of people — businessmen, traders, people in services, Members of Legislative Assembly or Parliament — who would now be eligible to lease out their land along with the disabled. It is a big relief, but there is one thing they should not have done, which is prescribing a maximum lease period of three years. It should have been left for the owner to decide.

Madhya Pradesh and Maharashtra have passed a new law on the lines of our Model Law. They have also added a penalty clause that if the tenant does not return the land after the lease period is over, s/he could be punished with imprisonment.

Would these formal leases have to be recorded with a government agency/department?

In our Model Law, we said the agreement between the tenant and the owner need not be recorded or registered with the revenue department; that would make the process complex. It also becomes a cause of fear in the owner’s head that their land is registered in revenue records under a lease and tomorrow a new law could come and prescribe that the tenant would have a right over the land.

Hence, we suggested that the agreement be a simple written document attested by a person in a position of responsibility, for example the gram pradhan (village head), an advocate or a revenue officer. The government does not need to interfere. This document alone would be enough to make the lease formal and legal.

Once the period of the lease is over, the land will by default go back into the owner’s possession. Nobody needs to go to any office to take possession back.

Now, some states are prescribing the timeline of leases between three and six years, but that is not the correct way to do it. You see, if a tenant farmer is cultivating horticulture crops such as fruit, it could take more than a decade for the crop to be completely ready. Now, if the owner is willing to allow the tenant farmer to cultivate for a longer period of time, why are the states saying that it should be three years or six years? The owner and the tenant should be left to decide if the lease is for 10 years, or 20 years.

There are good examples also. Uttarakhand with its new law allows the leases to last for a maximum of 30 years, which is very reasonable.

Why do you think land redistribution has failed?

Out of the 5.1 million acres of land redistributed, about 21 per cent is in West Bengal alone. Also, 60 per cent of the total number of beneficiaries who received land in redistribution are in the state of West Bengal. So, West Bengal is actually the only state which, somewhat successfully, implemented the land ceiling and redistribution laws. Bihar also took some steps but all other big states like Maharashtra, Madhya Pradesh and Uttar Pradesh have failed in redistribution of land.

This is partly because in the past when the time was right, the state governments did not have the willpower to do it and a committed bureaucracy was not there. Another reason was that Jammu and Kashmir and Bihar implemented land ceiling laws along with laws abolishing intermediaries as early as the 1950s, but all the other states implemented these laws very late, in the 1960s and 70s. By that time, all the landlords were alert and had transferred their land under different names, which became a reason for the failure of land reforms in many states.

If we talk about the present scenario of land reforms in the country, the situation is not really good: nearly two lakh hectares of land — together comprising an area larger than Delhi — are under prolonged litigation, so unless this land is free, there is no hope. Currently there is only one state, West Bengal, which is still redistributing small chunks of land to the landless, but nothing is happening in any other Indian state.

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