Renovating Land Management – The Role of Land Reforms in Agriculture

INTRODUCTION #

A huge disparity in land holding pattern contin- ues to exist in the country even after seven decades of independence. A series of land reform laws have been passed by the State and Central Governments. Though the laws are very rosy and catchy but their implementation is hopeless. However, people working with rural poor masses of India must have an elementary knowledge about the existing land reform measures, operating in the country.

The stigma of Indian Agriculture is the highly defective structure of its land holdings. The measures of land reforms aim at correcting it. The term ‘land reforms’ involves procurement and redistribution of large holdings of agricultural land among the small farmers and landless agricultural labourers. It is an instrument to bring about improvements in the institutional framework of land.

The responsibility of land reforms is owned by the government with a view of benefiting those who either have petty holdings or have no land at all. As big land owners are quite unlikely to share their holdings with their landless counterparts, interven- tion by the government using force of law/legislation is necessary to secure social justice for the masses.

Land Tenure #

Land tenure may be defined as the system in which land is held by an individual or the actual tiller of the land; it determines his rights and respon- sibilities in connection with his holding. Obviously,

land tenure system refers to law/rules and regulations which confers ownership rights upon an individual or actual tiller of the soil. It determines the status of the actual tiller of the land and his relations with the state. It points out under what circumstances; the actual owner of the land may lose his ownership right. It specifies rent to be realized from the tiller, its time and methods. It specifies the conditions under which the actual tiller can sell or transfer his holding. It specifies the conditions, whether a cultivator can mortgage his land or not.

There were a large number of land tenure sys- tems prevalent in India in pre-independence period. But the following three were more prevalent in different parts of the country.

Ryotwari system #

Under this system, every registered holder is recognized as its owner. The owner cultivator or peasant proprietor is responsible directly to the government for the payment of land revenues and other dues. There is no intermediary between the government and the cultivator. This is perhaps the best system of land tenure.

Mahalwari system #

Under this system, land is held (owned) jointly by a collective body of village. This body collects land revenues from the owners or cultivator peasants and is responsible to the government. This system facilitates cooperative farming to get maximum yield from land. The main drawback with this system is that it encourages absentee landlordism.

Zamindari system #

In Zamindari system, there is a separation of ownership of land from its cultivators. Under this system, one person known as zamindar owns a village and is responsible for the payment of land revenues to the government. Now this system has been abolished.

PRESENT SITUATION: NSSO SUR- VEY #

Key Findings of the Survey #

• The NSSO figure is about 65 million hectares lower than the numbers put out by the ninth agricultural census conducted in 2010-11.
• The report on land and livestock holdings estimates that around 95 million hectares of land was classified as operational holdings in 2012-13.
• Household ownership of land- the total esti- mated area owned, and average area owned per household has declined in 2012-2013 as compared to 2002-03.
• During the agriculture year July 2012- June 2013 rural India had an estimated total area of

92.3 million hectares under household owner- ship of land and the average area owned per household was 0.592 hectares.

THE NEED FOR LAND REFORMS #

As discussed earlier, the defects existing with Indian agrarian structure pointed out by erstwhile Planning Commission, highlighted the need for land reforms. The existing system during the beginning of Planned Growth, Tenant got little incentive to increase his output since a large share went to the landowner. Very small margin was left for the actual cultivator and this amount was quite insufficient to provide for a capital investment on the land. The landlords grew richer, the intermediaries continued to flourish, the state was deprived of its share of legitimate increase in revenue and the cultivator tenants were in hand to mouth existence.

In order to remove the defects with existing agrarian structure, there was need of a institutional changes in holdings. A high powered committee in

1948 with J. L. Nehru as its Chairman recommended that “all intermediaries between the tiller and the state should be eliminated and all middlemen should be replaced by non-profit making agencies like cooperatives. The maximum size of holdings should be fixed and the surplus land should be acquired and placed at the disposal of the village cooperatives. Small holdings should be consolidated and steps should be taken to prevent further fragmentation”.

Objective of Land Reforms #

The basic objective of land reforms in India has been the creation of a system of peasant proprietor- ship. ‘Land to the tiller’ has been the motto. Through the redistribution of land by applying ceiling on land holdings, the idea has been to build up a vigorous independent peasantry consisting of small farmers and to help these farmer class with extension of credit and distribution facilities, largely through a network of cooperative service organization.

The objectives of land reforms policy were set out by the planners as “the removal of such institu- tional and motivational impediments to the modern- ization of agriculture as were innate in the agrarian structure inherited from the past and the reduction of gross inequalities in the agrarian economy and rural society which stemmed from unequal rights in land”.

The erstwhile Planning Commission gave two basic objectives of land reforms, namely.

Economic efficiency #

The agrarian reforms should help in removing all obstacles to achieve high agricultural productivity. They should help in creating conditions for evolving as speedy as possible, an agricultural economy with high level of efficiency.

Social justice #

The agrarian reforms should help to eliminate all elements of exploitation and ensure social justice within the agrarian system to provide security for the tiller of the soil and assure equality of status and opportunity to all the sections of the rural population. In order to achieve these objectives, the following policy measures were envisaged:

• Abolition of the prevalent intermediary sys- tem between the state and the actual tillers;

• Tenancy reforms such as conferment of own- ership rights on the cultivating tenants in the land held under their possession;
• Imposition of a ceiling on agricultural land holdings as a measure contributing to the modernization of agriculture and to eliminate parasitic absentee landlordism;
• Rationalization of the record of rights in land so as to make the rights of tenants, share crop- pers and other categories of insecure landlords;
• Consolidation of holdings with a view to making easier the application of modern techniques of agriculture; and
• Development of co-operative farming and co – operative village management.

Progress of Land Reform Measures #

The land tenure systems which the British imposed in India, regardless of the different juridical forms they assumed in different regions, were only variants of feudal and semi-feudal land ownership. The British administrators altered these systems in a manner as to facilitate the extraction of more rents from the cultivators by making the landlord, who was earlier a rent collector, the absolute owner of land and by depriving the actual cultivators of all their traditional rights.

Although juristically no landlord or intermedi- aries were created and the settlements were made directly with the ryot, yet the fact was that, due to prevailing inequalities in land holdings, the bigger ryot landlords came to dominate the agrarian set up in many respects and became the counter – parts of the landlords in zamindari areas. Like the latter, they indulged in many semi- feudal forms of exploitation such as share cropping, rack renting, ejectments, forced labour, usury, etc.

Thus, the structure of agrarian society evolved under British rule, created a socio-economic set up in which parasitism flourished, land concentration in the hands of a few rural rich continued to grow, and landlessness and land hunger of the peasants mounted at an over increasing pace. Evictions and insecurity of tenancy and rack – renting became a general phenomenon and the cultivators were ground down by a colossal burden of indebtedness.

Land reforms have been on the agenda of rural reconstruction since independence. Number of land reform laws has been made by state and central government after independence. The reforms have been undertaken along the following lines:

• Abolition of zamindars and other interme- diaries (jagirdars, inamdars, malgujars, etc) between the/state and the cultivator;
• Tenancy reforms and the reconstruction of the land ownership system;
• Fixation of ceiling on holdings and distribu- tion of surplus land among the landless;
• Reorganization of agriculture through consol- idation of holding and prevention of further fragmentation; and
• Development of co-operative farming and co-operative village management systems.

Tenancy reforms #

The first phase of land reforms (1948-55) was mainly concerned with the abolition of intermediar- ies. The tenancy reform which is the integral part of land reform policy favored neither wholesale removal of landlordism nor the wholesale abolition of tenant cultivators. Hence, the middle course was adopted. Thus certain amendments to the existing tenancy laws were carried out along with the legislations for the abolition of intermediaries. This extended the scope of protection to the tenants of intermediaries particularly in areas of statutory landlordism.

But the owners were allowed to resume land for their personal cultivation. This led to the mass eviction of tenants, sub-tenants and share-croppers through various legal and extra-legal actions. In fact, a big drive to clear land of tenant occupants was started by landlords in order to obtain maximum areas. Innumerable evictions were effected the pro- cess of resumption of land by landowners. But such evictions could not take place in U.P. and Union Territory of Delhi. In fact, U.P. has the credit of having the best land reforms in India.

To counteract this, the law makers in most of the states tried to enact or amend tenancy laws in the following decade (1955-65) and friends plug certain glaring loopholes in the existing laws. The major aspects incorporated in tenancy legislation in

different states to protect the tenants can be identi- fied as follows.

Fixation of rents #

Before the initiation of land reform measures the tenants were required to pay one half of their produce or more as rent to the landlords. During the first plan period, it was suggested that the rent should not exceed 1/4th or 1/5 of the produce in any case. During the second and third plans also this suggestion was repeated and it was suggested that the rent should be made payable in cash. Legislation along these lines has been enacted in all the states. However, different states have prescribed different rates of rents. For instance in Gujarat and Mahar- ashtra the maximum rent stands at one-sixth of the produce. In Assam, Manipur and Tripura maximum rents vary between 1/4 and 1/5th of the gross pro- duce. In Orissa and Bihar, 1/4th of the gross produce has been fixed as rent. In Rajasthan, fair rent is fixed at 1/6th of the gross produce but in case of cash rents, at twice the land revenue assessment.

Security of tenants #

It was emphasized in the first, second and third five year plans that the tenants. Should be accorded permanent rights in the lands leased in by them sub- ject to a limited right of resumption to be granted to land-owners. In accordance with this legislation providing for security of tenure has been enacted in all states.

This legislation has three aims:

• The ejectment of tenant should not take place except in accordance with the provision of law;
• The land may be resumed by the owner only for personal cultivation; and
• In the event of resumption, the tenant is to be assured of a minimum tenanted area in his possession.
• The legislation provided that the ejectment of tenant can take place only through order of a revenue court. The grounds on which ejectment may be allowed include:
• Non-payment of rent,
• Performance of an act which is destructive or permanently injurious to land,
• Sub-letting the land, and

• Resumption of land for personal cultivation by the landlord.

Legislations have been passed for granting security of tenure in different states on the following patterns.

All tenants in possession of cultivated land, have been given full security of tenure. The land owners have no right to resume land for personal cultivation as in V.P. and Delhi.

In Assam, Maharashtra, Gujarat, Punjab, Rajasthan and Himachal Pradesh land owners are permitted to resume a limited area for personal cultivation subject to the condition that a minimum area or portion of the holding is left with the tenants.

In West Bengal and Jammu & Kashmir, a limit has been placed on the extent of land which a land owner may resume. But the tenant is not entitled to retain a minimum area or portion of this holding in all cases.

Right of ownership #

Regulation of rents and security of tenure are treated as first stage in the tenancy reforms. The ultimate goal is to confer rights of ownership on as many tenants as possible and bring them in direct contact with the state. Legislations passed along these lines provide for bringing tenants of non-re- sumable lands into direct relationship with the state in the following three ways:

• By declaring tenants as owners; the tenants were required to pay compensation to owners in suitable installments;
• Through the acquisition of right of ownership by the state on payment of compensation and transfer of ownership to tenants; and
• By protecting the interests of sub-tenants under the tenancy laws and bringing them into direct relation – ship with the state.

The practice of leasing out of land is adopted by those cultivators’ who do not possess required amount of labour and capitals. Otherwise, in view of high returns from land, leasing out and share-cropping are considered unprofitable by owner cultivators.

Evaluation of tenancy reforms #

As a result of tenancy legislations in many states the tenants and sub-tenants have been brought into

direct relationship with the state. But the progress was very slow in some states due to the following reasons.

1. The legislation has not been able to meet the objects laid down by the Erstwhile Planning Commission. The fixation of statutory rent was very high in some states.
2. The term personal cultivation was defined in a loose manner. Because of this, the lands ostensibly resumed by the land-lords on the pretext of personal cultivation are cultivated through crop -sharing arrangements where the sharers are treated as labourers.
3. The definition of the term ‘tenant’ excluded the share croppers who form a vast majority of the tenant cultivators. Thus share croppers did not get any benefit.
4. The non-availability of correct and up-to-date land. Records have not allowed to carry out the tenancy reforms properly.
5. The tenants can be evicted from their hold- ings on many grounds. This has been termed as a continuing hang over of the feudal sys- tem.

Suggestions for improvement #

The following suggestions can be considered useful in achieving the aims of tenancy reforms.

1. The resumption of land by the owner should be legal in cases where the owner cultivates the land himself.
2. The ex-landlords who have retained excess holdings under the pretext of personal culti- vation should be brought under a ceiling lim- it.
3. Correct land records should be compiled and maintained so as to facilitate effective appli- cation of tenancy land reforms.
4. There should be complete ban on letting and subletting of agricultural lands. Exception should be allowed in cases where the owner is a widow, minor or handicapped. The real purpose of land reforms can be served only if the cultivators get financial support from the financial institutions for the permanent im- provement of their holdings.

Ceiling on land holdings #

Ceiling on land holdings refers to the fixation of maximum size of a holding that an individual cultivator or a household may possess. Beyond this maximum limit, all land belonging to the landlords is taken away by the government to be redistributed among the landless labourers. Thus the imposition of ceiling on agricultural holdings is mainly a redis- tribution measure.

The idea basically is to ration the land in such a way that, above a certain level, the surplus land is taken away from the present holders and is distrib- uted to the landless or to the small farmers. This will reduce the wide disparities of income and wealth found in the agrarian structure.

The ceiling question gave rise to more debate and arguments than any other reform issue. Legis- lations for ceiling on existing holding and future acquisition were enacted in most of the states during the second plan period

The ceiling on agricultural holdings was intended

to:

• Meet the hunger of the landless;
• Reduce the glaring inequalities in land own- ership so as to pave the way for development of co- operative rural economy; and
• Increase self employment in owned land.

The ceiling laws were enacted and enforced actually in two phases: the earlier phase covering the period from 1960-1972, before the national guidelines were laid down, and the later since 1972 after the adoption of guidelines. However, provi- sions related to ceiling laws can be analyzed under the following heads.

Unit of application #

In the beginning, some states took ‘individual’ as the unit of ceiling, while some others regarded ‘family’ as the unit. This led to widespread irregu- larities and big land owners started transferring their land into pieces to their fake kiths and kins and managed to keep unduly large holdings.

However, since 1972, after suitable corrections, the unit of land ceiling universally adopted by all the states is family having a father, a mother and

children. Parents having more than 5 children can be given a little exemption but in no way the amount of exemption will exceed twice the prescribed limits.

Recommendations of the chief minister’s conference #

In 1972, a new national policy on land ceiling was evolved on the recommendations of the chief minister’s conference. The following guidelines were laid down.

• Taking into account the fertility of soil and other conditions, the best category of land in the state with assured irrigation and capable of yielding atleast two crops a year the ceiling should be fixed 10-18 acres.
• In the case of land with assured irrigation for only one crop in a year, ceiling shall not exceed 27 acres.
• In case of owners with different types of holdings, after converting the better catego- ries of land into lowest categories, the ceiling should not exceed 54 acres.
• The unit of application should be a family of 5 members. Where the members of the family exceed additional land may be allowed for each member in excess of 5 in such a manner that the total area admissible to the family does not exceed twice the ceiling limit for a family of 5 members. Where both husband and wife hold land in their own names the two will have rights in the properties within the ceiling in proportion to the value of land held by each before the application of ceiling. Each major child is to be treated as a separate unit for the purpose of application of ceiling.

Consolidation of holding #

India is a land of very small, fragmented and uneconomical holdings. That is why the need of consolidating these fragmented holdings was felt in order to improve their productivity and viability of investments. Legislations have been introduced by various state governments, on these lines. Consoli- dation of land is a process of rearrangement of land on the basis of existing rights.

Most states have not shown any enthusiasm for implementing such legislations. Only in Punjab,

Haryana and parts of U.P. this programme has made desired progress. Orissa, Bihar, H.P. etc. have also taken up consolidation in a big way. An area of

584.72 lakh hectares has so far been consolidated all over India.

Impact of Land Reforms #

The impact of land reform measures on agrar- ian structure of the country can be discussed under following heads.

Changing over to market oriented farming #

The analysis of pre-independence patterns of land systems reveals that the agrarian and social structure which developed under the British tended to perpetuate a backward and medieval economy in a state of stagnation for decades. The forces to impede the production and development were very active.

In contrast to this, National Commission on Agriculture (NCA) pointed out that the essence of present situation is that Indian agriculture is in a stage of transition from predominantly semi-feudal type of agriculture characterized by large scale leas- ing of land and subsistence farming to a commer- cialized agriculture and, thus, increasingly assuming the character of market oriented farming.

End of feudalism #

The National Commission on Agriculture also pointed out that as a result of land reforms that have taken place since the independence; the feudal and semi-feudal land owning classes have lost their erstwhile domination over Indian agrarian economy as a whole. Moreover, the decline in the semi-feu- dalistic relations has followed growth of agriculture on commercial lines. However, some of the evils such as share-cropping, extraction of high rates of rents, usury, eviction of tenants, social and caste oppression, etc. still prevail in some parts of the country but the degree of their intensity is negligible.

Leasing in of land by big owners #

One of the important effects of land reforms is that, the subsistence farming is changing over to commercial farming. In this context NCA has pointed out that under commercial tenancy, leasing in of land by the big land owners from the small farmers takes place and such tenancy prevails more

in areas where agriculture is modernized. It is com- mon in Punjab and other areas where the impact of the green revolution has been appreciable. It is almost absent in the eastern regions of the country where agriculture is far less developed and where old type of tenancy still persists.

Emergence of modern entrepreneurs #

As a result of land reforms a class of modern entrepreneur farmers has emerged. These farmers have substantial land holdings and cultivate their land through hired labour and new technology. They are drawn largely from the ranks of ex-feudal landlords, upper strata of privileged tenants and the bigger ryots, moneylenders, merchants and various other categories of substantial landlords. Besides the growth of commercial agriculture and the rise in the prices of agricultural commodities and also improvement in techniques, have strengthened the economic position of this class of big farmers. They are also the main beneficiaries of governmental expenditure on agricultural development. It is this class which has been treated as the main custodian of the ‘green-revolution’.

Reduction of poverty #

Besides several negative impacts, land reform measures have certainly reduced the disparities in agricultural holdings. The surplus lands of big landlords have been distributed among the tenants and small farmers. The exploitation of tenants by the land owners has been reduced considerably. The cultivator-owner has been given assistance by the credit institutions to increase the productivity of their lands. The cultivator-owner has been brought in direct contact with state. They are no longer required to share their produce with their landlords. All these steps have led to an increase in the income of the small farmers and thus reduced poverty in the rural areas.

Use of institutional credit #

Agrarian reforms have significant implications in facilitating the use of institutional credit. The land re – form measures have influenced the working of financial institutions viz. co- operative banks, regional rural banks and commercial banks, etc.

Review of Land Reform Measures #

Though the land reform measures have been

instrumental in bringing about some desirable changes in Indian agrarian structure, yet, they have failed to secure a justice to a large section of the rural population. The results of land reforms imple- mented so far have been far from satisfactory.

Some of the glaring examples of weakness in land reform measures are listed as under.

1. There has been no uniformity in execution of land reform policies and legislations in differ- ent states. For example, the rent to be charged from the cultivators shows a wide variation from 20% to 50 % of the gross product.
2. Land reform measures have failed to prevent subletting and rack-renting.
3. The identification of self-cultivation was wrong which allowed the big landlords to keep large holdings with them.
4. Ex-landlords and zamindars have showed on papers that they have been cultivating the land. However, they get them tilled by hired labourers.
5. Eviction of tenants has occurred on a large scale out of the suspicion of land being lost and under the guise of “voluntary surrenders”.
6. Administrative arrangements for enforce- ment and supervision of land reforms have been fully inadequate.
7. Records of tenants did not exist in several states and often incomplete and out of date records were used for the implementation purposes.
8. In several states,l the existing provisions of security of tenure were of an interim nature and comprehensive measures to bring tenants into direct relation with the state are yet to be adopted.
9. The rights to resumption widened the scope of ejectment.

Reasons for Low Progress of Land Reforms #

The task force on agrarian relations set up by the Planning Commission to appraise the progress and problems of land reforms, identified the following reasons for the poor performance of land reform measures.

Lack of political will #

In the context of the socio-economic conditions prevailing in the country, no tangible progress can be expected in the field of land reforms in the absence of requisite political will. The sad truth is that this crucial factor has been wanting. In no sphere of pub- lic activity in our country since independence has had such a big gap between precept and practice i.e. between policy pronouncement and actual execution.

Absence of pressure from below #

Except in a few scattered and localized pockets, practically all over the country, the poor peasants and agricultural workers are passive, unorganized and inarticulate. The basic difficulty in our situation arises from the fact that the beneficiaries of land reforms do not constitute a homogeneous social or economic group.

Negative attitude of the bureaucracy #

Towards the implementation of land reforms, attitude of bureaucracy has been generally lukewarm and indifferent. This is, of course, inevitable because, as in the case of men who wield political power, those in the high echelons of the administration also are either big landowners themselves or have close nexus with big landowners.

Legal hurdles #

Legal hurdles also stand in the way of land reforms. The task force categorically states: “in a society in which the entire weight of civil and crim- inal laws, judicial pronouncements and precedents, administrative procedure and practice is thrown on the side of the existing social order based on the inviolability of the private property, an isolated law aiming at the restructuring of the property relation in the rural area has little chance of success. And whatever little chance of success was there, com- pletely evaporated because of the loopholes in the laws and protracted legislations”.

Absence of correct and up-to-date land records #

The absence of correct and complete land records further added a good deal of confusion. It is because of this that no amount of legislative measures could help the tenant in the court unless he could prove

that he is the actual tenant. This he could only do if there were reliable, and up-to-date records of tenants. The main reason for the unsatisfactory state of affairs are:

• Many of the areas in the country have never been cadastrally surveyed,
• In some areas where cadastral surveys were done for a long time, no resurveys have been taken,
• No machinery of any kind existed for main- taining village records,
• Even where records were kept by government

officials, there is no uniform system, and

• It has been found that even official records in

many cases have not been correct.

Land reforms have been treated as an administrative issue #

The implementation of land reforms is not an administrative issue, it is more of a political issue. Therefore, it is necessary to strengthen the political will for implementing land reforms. The task force of the Erstwhile Planning Commission in a very forthright manner states: “it should, however, be clearly understood that the mere setting up of an efficient administrative machinery will not by itself lead to any substantial improvement unless the political and economic hurdles operating against the programme are removed.”

Suggestions for Improvement #

The land reform measures were thoroughly reviewed by Planning Commission and other commit- tees. Based on their findings, National Commission on Agriculture has suggested following measures to reinforce the implementation of land reforms:

Breaking of landlord-tenant nexus #

The private owner who rents out land today is undoubtedly intermediary between the tiller and the state and, as such, does not fit into the fundamental pattern of land reforms. It is, therefore, high time that tenancy reforms were directed towards the state of finally breaking up the landlord-tenant nexus.

A potent practice of agriculture i.e. landlordism should be discouraged and ultimately curbed. Agri- culture should be treated as a family occupation of

the peasant-cultivator and not a source of subsidiary unearned income. In a normal peasant-proprietor economy absentee landlordism should find no place.

Restricted tenancy should be allowed #

Under the present land-man ratio existing in India, tenancy as such cannot be banned though undesirable. Experience has shown that wherever such an overall ban has been imposed, it has led to the emergence of concealed tenancy with all its evils.

Hence, until such time as socio-economic devel- opment in the country bring about a radical change in man-land ratio and create possibilities of transfer of population from the agriculture to non-agricul- tural sectors on a big scale, tenancy shall have to be permitted in a restricted form. It will have to be strictly controlled and regulated. Leasing in of land should be permitted only in case of small farmers. Leasing in of land by big landowners from small landowners should be discouraged.

Effective implementation of ceiling laws #

The studies have revealed that ceiling laws have not been able to make any appreciable break-through in reducing concentration of land in the hands of a few big farmers. These laws are devised to achieve the objective of substantially reducing the present inequalities in land holdings. It is, therefore, sug- gested that present ceiling legislations should be enforced vigorously. For instance, it is necessary to take firm measures against fiction and benami transfers which have been deliberately manipulated by big land- owners in order to by-pass ceiling legislations.

The state government should conduct a proper inquiry into such transfers. If it is found that the transfers were made purposely to evade the provi- sions of ceiling laws, the land so transferred should be vested in the state after imposition of some penalty on the transferee. In cases where fictions co-operative societies have been organized with a view to concealing the surplus land, such co-oper- atives should be subjected to proper investigation. And where many partners have been shown in a holding, but the holding as a whole is under a single management, such cases should also be brought to lime – light and adequate actions should be taken to undo it.

Control on land held by trusts and institutions #

The Erstwhile Planning Commission holds the view that the land possessed by trusts or institutions used for religions, charitable or educational purposes should be brought under ceiling laws. It would not be proper to give them a blanket exemption because a large number of such institutions and trusts are fictions or have been deliberately created to evade ceiling laws.

Some of them are not being used for the pur- pose which on paper they profess to serve. Arable lands held by such trusts and endowments should be brought under the ceiling laws and more ceiling should also be made applicable to forests and water areas held by such institutions.

Distribution of surplus land #

There is enough force in the argument that land should be distributed to small peasants owning less land than the economic holding or the minimum operational holding. Some have also argued that it is not only important to fix a ceiling on land hold- ing, but it is also important to fix floor so that a large number of peasants may have at least a small operational holdings.

But in the view of massive landlessness, a serious lack of employment opportunities and a subsistence level of, almost half of the rural population below the poverty line, the land should be distributed to the landless labourer to whom land, however small, is the source of employment and relief from des- titution. Hence for a long time to come a floor or ownership cannot be applied.

Simplification of legal procedure and administrative machinery #

The Planning Commission has observed that ceiling legislations have suffered not only because of certain political and economic constraints but also because of a very inadequate and inefficient administrative machinery for enforcing it. The same is true for other kinds of land reform measures. It means that existing administrative machinery has generally failed to prevent the evasion of effected laws and has been functioning largely in collusion with the vested interests, especially at the village

and tehsil levels.

The existing districts civil and revenue courts cannot properly discharge those functions being already overburdened with other kinds of litigations. Besides, the existing system causes unnecessary delays and makes justice very costly. It often results in dispensation of a doubtful nature. These courts are far away from villages and the poor man is generally at a disadvantage. Hence, the restructuring of administrative machinery is required.

Voluntary   surrenders   should   not   be accepted #

Voluntary surrenders have generally been used to cover up forcible and illegal eviction of tenants. Such surrenders should not be accepted as valid unless they are certified as genuine by an appropriate authority. In this context, the commission suggested that land surrendered should not revert to the land- owner but should vest in the state to be allotted to any other eligible person. It can also be argued that it should revert to the owner if he possesses land less than the ceiling limit.

Preparation of up-to-date land records #

Tenancy legislation cannot be properly imple- mented without adequate and proper land records. Therefore, it is imperative that the preparation of land records should be given top priority in the whole scheme of enforcement of land reforms. Tenants, tenants-at will, and share – croppers should be promptly and properly identified and their names should be recorded forthwith. It can, however, be said that the interest of the owner should not be ignored.

Ensure security of tenure #

So far as the tenure is concerned, the most important requirements would be:

• Recording the names of all the persons who hold land including share-croppers in the record of right;
• Ensuring that not more than the legally stipulated share of crop is taken from the share-croppers by land owners;
• Ensuring that no ejectment takes place either on the basis of voluntary or through other extra- legal or illegal methods;

• Ensuring inheritance to the heirs of the share-croppers on their death where law provides it; and
• Providing supportive services including credit to share-croppers to free them from the clutches of landowners and moneylenders.

Is contract farming and land leasing is the solution for declining average size of land holdings in India? #

Land is important natural resource as all the three sector of economy is very much dependent on land, particularly agriculture.

Pros #

Contract farming and land leasing are innovative method of prudent utilization of land.

Contract farming has been used for agricultural production for decades but its popularity appears to have been increasing in recent years. The use of contracts has become attractive to many farmers because the arrangement can offer both an assured market and access to production support.

Contract farming is also of interest to buyers, who seek supplies of products for sale further along the value chain or for processing. Processors consti- tute the main users of contracts, as the guaranteed supply enables them to maximize utilization of their processing capacity.

Contracts with farmers can also reduce risk from disease or weather and facilitate certification, which is being increasingly demanded by advanced markets. There are also potential benefits for national econo- mies as contract farming leads to economies of scale, which, as some agriculture scientist argue, are bound to provide for a more dynamic agricultural sector.

Although contract farming must first and fore- most be considered as a commercial proposition, it has also come to be viewed as an effective approach to help solve many of the market access and input supply problems faced by small farmers. That’s help in development of agriculture sector

Cons #

Common problems include farmers selling to a buyer other than the one with whom they hold a

contract or using inputs supplied by the company for purposes other than intended. From the other side, a company sometimes fails to buy products at the agreed prices or in the agreed quantities, or arbitrarily downgrades produce quality.

Lack of legal framework is thus crucial for the successful implementation and long-term sustaina- bility of contract farming operations.

A system of law is essential to assist farmers and their buyers in the negotiation and drafting of contracts. It is also important to protect them from risks that may occur during contractual execution, such as abuse of power by the stronger bargaining party or breach of contract. Strengthening farmer organizations to improve their contract negotiating skills can redress the potential for subsequent mis- understandings

Even apparently successful contracts from a legal point of view can face other difficulties. For example, family relationships can be threatened. Work for contracts is often done by women but the contracts are invariably in the name of the man who also receives the payment. So, considering the pros and cons of Contract farming and land leasing, it is clear that they have potential to transform agricul- tural sector into a major driver of Indian economy.

RECENT REFLECTIONS #

Reconciling land interests #

India Inc should welcome the Land Acquisition, Rehabilitation and Resettlement (LAAR) Bill, now on course to becoming law. The earlier version of the Bill had several onerous and impractical provi- sions. These included one that forced companies, even in cases where they privately purchase over 100 acres in rural areas or 50 acres in urban areas, to undertake rehabilitation and resettlement activity.

Moreover, in cases of Government acquisition for private firms, consent from at least 80 per cent of ‘project affected people’ was mandatory. Equally irrational were the provisions that fixed compensation at four times the ‘market value’ in all rural and twice this for all urban areas (without distinguishing between undervalued and already expensive land) and laid down that not more than 5 per cent of irrigated multi-crop land in any district

can be acquired. This would have effectively shut out industrialization in areas such as Punjab, coastal Andhra and western Uttar Pradesh.

The Bill passed by the Lok Sabha corrects many of these flaws. The land size threshold for applying R&R conditions for private land purchases has been left to the discretion of States. The flat four times market value formula has been relaxed, with States given the flexibility to fix the multiplier in relation to the distance from an urban centre. The ‘market value’ itself would exclude any outlier transaction that does not reflect on the actual prevailing rate.

The percentage of irrigated farmland to be acquired for non-agricultural purposes will now also be decided by the States – which is how it should be. The informed consent provision will be limited to only 80 per cent of actual landowners and not all ‘affected people’ (sharecroppers, farm labourers, etc). Even this proportion has been lowered to 70 per cent in the case of land acquired for public-pri- vate-partnership projects.

After factoring in all these dilutions, the LAAR Bill strikes a reasonable balance between our larger economic goals and landowner rights. The latter, unlike in the past, are now aware that the value of their agricultural land is much higher when put to a different use. Since the existing circle rates don’t capture this value, it is only fair they are paid more than the ‘market rate’.

At the same time, fragmentation of holdings and absence of clear titles makes acquisition of contiguous tracts a costly and time-consuming affair for private firms. This makes some form of state involvement in land acquisition for projects, including private ones, necessary.

The good thing about the LAAR Bill is that it provides a basic framework for such acquisitions, without which industry simply cannot come up. However, the definition of ‘public purpose’ when applied to Government land purchases for private companies should be expanded beyond infrastruc- ture projects to include any manufacturing or ser- vice sector activity offering significant employment generation potential. The law must be amended to expand the definition of ‘public purpose’, if it is going to be truly effective.

MODEL LAND LEASING LAW #

Niti Aayog Panel proposes Model Land Leasing Law after a 11-member committee was constituted under T. Haque has suggested the enactment of the law to permit and facilitate leasing of agricultural land.

Significance #

• According to Haque, former chairman of CACP, about 20% of land holdings are managed by tenant farmers, with the figure in states like Andhra Pradesh going up to 60%.
• Presently farmers cultivating the agricultural land on lease are unable to access loans through credit institutions, insurance, disaster relief and other support services provided by the government as they don’t own the land.
• They cannot show the land as collateral as land owners are afraid of losing their land to tenants under various tenancy laws. So, they keep on changing tenants. This makes tenants unable to benefit from various govt. schemes.

Broad framework of the model act #

• Make land leasing legal.
• Remove adverse possession clause from laws of states. (Adverse possession creates fear among owners, as a tenant may claim title if he keeps possession of the land for a specified period of time).
• Facilitate access to short-term credit and crop

insurance based on a simple lease agreement for tenants.

• Allow automatic resumption of land on expiry of agreed lease period without requiring any minimum area criteria. (In some states, the criterion stipulates a minimum area to be left to the tenant on expiry of the lease to protect his future).
• Terms of lease and Rent to be determined mutually by owner and tenant.
• Lease to be terminated within lease period by giving an advance notice of one crop season or one crop or grounds like non-payment of rent, use of land for purpose other than what was agreed upon, lease harms the land, legal framework of leasing is not farmer-friendly and both parties are not benefiting

Benefits #

• To allow owners to lease out agricultural land to tenant farmers without any fear of losing it.
• To promote legalisation of land leasing.
• To ensure tenant farmers have access to institutional credit, insurance and disaster com- pensation without affecting the landowner title.
• This would allow unused land to be used pro- ductively, and enable tenant farmers to invest in the land and access credit and insurance.
• Will allow consolidation of farm land so that small plots of land that are economically unviable can be leased out.