Given the government’s aim of trying to increase investment in the farm sector, according to The Economic Times, it is working on a plan to recognise tenant farmers as cultivators. With security of tenure, the argument is a well-known one, tenants will spend more on improving their land including creating small irrigational canals; more important, they will become eligible for a whole range of benefits that they do not get today. This includes being able to get, for instance, bank loans at subsidised rates, fertiliser subsidies and even the newly-announced crop insurance scheme. Given that at least 25-30% of cultivation in the country takes place on informally leased land—in some pockets, the number can be as high as 40%—this will be a big step towards boosting farm productivity. While creating better rights for tenant farmers is important for increasing farm investment, it has to be kept in mind, this is far from sufficient and what is required is a host of rural reforms, starting from freeing up movement of agricultural produce across states to stopping the current practice of delivering incentives to primarily wheat and rice in a handful of states via FCI’s procurement.
Getting a model tenancy law, of course, is easier said than done since, at its core, it means creating a viable land-lease market which most political parties are opposed to. If, however, the problem of the shrinking farm size in India is to be addressed—it is one of the causes of the low productivity—facilitating land-leasing is critical.
A big step towards tackling the political resistance will be the manner in which land records are maintained. Which means the land records either must have an entry for both the owner of the land as well as the person to whom it has been leased to—and for what period—or there could be supplementary registers that are maintained with the name of the lessee; thanks to technology that allows each piece of land to be mapped, it is quite easy to give each piece of land a unique number, much like an Aadhaar one. The good news here is that there has been rapid digitisation of land records in states like Gujarat and Karnataka—in these states, with a lot of work expected to be complete by March 2017, once the land titling Act comes through, their respective governments can even start guaranteeing title. While the Centre will legislate a model tenancy law and hope that states follow up with their own laws, there is no certainty this will not go the way of the APMC Act where, after the Centre came out with a model Act, few states followed, the results of which has been that most mandis retain their chokehold over farmers. One way out is to at least get the BJP states to pass their Acts, and hope this persuades other states to follow suit.