In a bid to ensure smooth flow of credit, subsidies and other benefits to the sections of farmers who do not own land, the Centre will soon bring out a model legislation which, if implemented by states, could help in liberalising and legalising the tenancy rights across the country.
In the absence of tenancy rights, farmers cultivating crops as tenants do not have access to not only agricultural credit but a host of other subsidies doled out by the Centre and state governments. This impacts the agricultural yield as well as income of both tenants and land owners. The proposed model legislation would propose formal recognition for the tenant farmers. This will help small and marginal farmers in integrating with the banking system. Also, they could sell their produce at the minimum support prices to state-owned agencies. The model law would allow land owners who are not interested to continue with farming to rent it out to tenants.
The expert committee chaired by T Haque, former chairman of commission for agricultural costs and prices (CACP) is expected to submit a draft model act on tenancy right to the NITI Aayog soon.
“Although according to official data, only 10% of 140 million hectare of the country’s farm land are cultivated by tenant farmers, in reality the figure is much higher because most of the tenancy rights are given informally.
Kerala, Jammu and Kashmir and Manipur have no provisions for tenancy rights while most of other states, including Telangana, Bihar, Uttar Pradesh, Madhya Pradesh, Himachal Pradesh, Odisha and Jharkhand provide only limited tenancy rights specially in those land owned my defence personnel.
“The focus of the model legislation would be to engage both landlords and tenants legally so that not only higher agricultural output is achieved but also the owner gets higher rental,” Haque told FE. Some elements of the proposed legislation is expected to feature in the Budget speech.
Haque said the proposed law will set to abolish adverse possession clauses on the issue of possession of land which often creates fear in the mind of land owners t lease out land for a long period. Besides, it will ask the states to issue identity proof while certifying them as tenant farmers, who would be eligible to claim any benefit, which the other farmers are entitled to, including compensation for crop damages and input subsidies from the government.
The expert committee on land leasing chaired by Haque which was set up last year by NITI Aaayog and has representation from Andhra Pradesh, Uttarakhand, Punjab, Maharashtra, Rajasthan, Assam and Meghalaya governments. Meanwhile, a recent assessment by National Bank for Agriculture and Rural Development (NABARD) has noted that although the agricultural credit outflow has been rising steadily in the past years, there has been gross regional imbalance in credit flow specially to eastern , central and north-eastern regions of the country,
Of the total agricultural credit outflow of `8 lakh crore to the farmers by banks in the last financial year, more than 61% went to farmer in southern and northern regions while the share of western (12.66%) and eastern (9.47%) regions have been rather small. The credit disbursement to farmers in north-eastern states has been virtually negligible. “There has been impressive growth in volumes of agricultural credit disbursed while the physical outreach is a concern,” NABARD has stated in an assessement titled enhancing ‘Institutional credit flow to farm sector’.