The union government has rolled out a model Agricultural Land Leasing Act, 2016 that would legalize leasing of land in India; a move that government thinks would promote agricultural efficiency, equity and poverty reduction.
As per the Act, the land owner can now legally enter into a lease contract with the tenant for use of his/her agricultural land for agriculture and allied activities for a specified period for a consideration based on an agreement with terms and conditions mutually agreed by the owner and the cultivator.
Agriculture and allied activities would include raising of crops including food and non-food crops, fodder or grass; fruits and vegetables, flowers, any other horticultural crops and plantation; animal husbandry and dairy; poultry farming, stock breeding; fishery; agro forestry, agro-processing and other related activities by farmers and farmer groups.
T Haque-led committee, set up under the government’s think-tank NITI Aayog last year, has formulated the Act which is seen as a savior for the government whose repeated efforts to get changes to the Land Acquisition Act, 2013 passed in Parliament failed.
Telengana, Bihar, Karnataka, Madhya Pradesh and Uttar Pradesh ban land leasing with exceptions granted to landowners among widows, minors, disabled and defence personnel.
Tenancy is banned in Kerala for long but the state has only recently permitted only self-help groups to lease land.
States like Punjab, Haryana, Gujarat, Maharashtra and Assam do not ban leasing but the tenant acquires a right to purchase the leased land from the owner after a specified period of tenancy.
Only Andhra Pradesh, Tamil Nadu, Rajasthan and West Bengal have liberal tenancy laws.
Under the Act, leasing of land will ensure complete security of land ownership right for land owners and security of tenure for tenants for the agreed lease period.
Besides, the law provides for removing the clause of adverse possession of land in the land laws of various states and allows automatic resumption of land after the agreed lease period without requiring any minimum area of land to be left with the tenant even after termination of tenancy.
Further, it allows the terms and conditions of lease to be determined mutually by the land owner and the tenant and facilitate all tenants including share croppers to access insurance bank credit and bank credit against pledging of expected output besides incentivizing them to make investment in land improvement and also entitle them to get back the unused value of investment at the time of termination of tenancy.
Land ownership will remain secure and will revert to the owner and in case the parcel of land is sold before the tenure of the lease is complete, the rights of the tenants will be secure.
Attestation of the lease is proposed to be done at the level of the sarpanch, local bank official or notary.
The Model Act proposes that farmers and farmer groups be allowed to lease out land.
The definition of ‘farm land’ is proposed to be broadened to include food processing.
The Model Act proposes quicker litigation process in case of disputes, by suggesting recourse through criminal proceedings and special tribunal.
It is expected that the dispute settlement will be taken up at the level of the Gram Sabha, Panchayat and Tehsildar.
At present, only land owners can avail of crop insurance schemes or loans. Also, disaster relief in case of drought and crop damage is provided only to the owners and not cultivators.
The Model Act will enable share croppers to receive such benefits and relief. Lessee cultivators could raise crop loans on the basis of expected produce.
The Model Act is being finalised by an expert committee which NITI Aayog Vice-Chairman Arvind Panagariya had set up in September 2015 under former Commission for Agricultural Costs & Prices (CACP) chairman T. Haque.