Legalise farmland leasing

Both land owners and tenants will benefit

The government’s decision to prod states to legalise leasing of agricultural land by amending their land laws on the lines of the model Act drafted by the NITI Aayog is well advised. The need to make land leasing lawful and transparent in the interests of both land owners and tenants is, in fact, widely felt almost across the country. The Centre’s plea is, therefore, unlikely to face much resistance from states; not at least of the kind witnessed in the case of attempted changes in the land acquisition law in 2015. Some states like Madhya Pradesh, Odisha and Uttar Pradesh have already initiated the process of legitimising land leasing. Many others also seem inclined to do so. These include some of the states not ruled by the National Democratic Alliance (NDA) as well, such as Congress-ruled Karnataka and Left-ruled Kerala.

 
The objective of this move is to allow absentee or non-cultivator land owners to rent out their holdings to tenants on mutually agreed and legally enforceable terms. It will allow land that now remains untilled to be put to gainful use without altering its proprietorship. The NITI Aayog, which is spearheading efforts on this front, reckons that it can help bring 20 million hectares of unutilised or underutilised land under cultivation. If that is so, lease legalisation will emerge as one of the most momentous reforms in the agriculture sector in over half a century. The land reforms of 1950s and 1960s were essentially guided by the need to abolish zamindari and provide ownership rights to the tillers of land. The imposition of a land ceiling was conceived as another means of freeing land from big landlords for redistribution among the landless. These measures have outlived their utility and have turned irrelevant and even counterproductive in many cases. They, therefore, need to be replaced with measures that can have a positive bearing on agricultural production and generate new avenues of employment and income.

 
The benefits of legalised land tenancies are, indeed, many and far-reaching. Besides bringing idle land into gainful use, it can help expand operational holdings, many of which have now become too small and fragmented to be economically viable. Besides, it will incentivise tenant-cultivators to invest in long- and short-term land improvement and yield-enhancing measures, such as irrigation, improved seeds, fertilisers and pesticides. This is not possible now because of the sense of insecurity among tenants.  Even land owners do not normally allow this for fear of losing control over their land. The biggest advantage is that it will make tenant-cultivators eligible for institutional credit, government subsidies and risk mitigation mechanisms like insurance and compensation for crop losses due to natural or other calamities.

 
Though the NITI Aayog’s model law falls shy of suggesting leasing agricultural land for non-agricultural use, it may be worthwhile to consider incorporation of such a provision in the amended law, subjecting it to well-defined conditions. This can facilitate making land available for infrastructure, industrialisation and other development projects, something that is extremely difficult under the existing legal framework. Prime arable land, including irrigated land, pastures and grazing grounds, can surely be excluded from the purview of such provisions. If states can go a step further and repeal the outmoded land ceiling laws, it will help to curb the evil of benami land deals as well.