Download Refrom in he land policy for accelerated

REFORM IN THE LAND POLICY FOR
ACCELERATED AGRICULTURAL
GROWTH AND
POVERTY REDUCTION
SOME DISABLING FEATURES OF AGRICULTURAL
ECONOMY
ABOUT 85 PERCENT OPERATIONAL HOLDINGS ARE SMALL
AND MARGINAL LACKING ACCESS TO CAPITAL, TECHNOLOGY
AND MARKET FOR GROWTH
INSTITUTIONAL ARRANGEMENTS AND POLICY SUPPORT FOR
BACKWARD AND FORWARD LINKAGES ARE HIGHLY
INADEQUATE
RESTRICTIVE LAND LAWS HAVE REDUCED OCCUPATIONAL
MOBILITY OF PEOPLE AND ALSO THE POOR PEOPLES’
ACCESSIBILITY TO LAND DUE TO ABSENCE OF ACTIVE LEASE
MARKET
MANY PEOPLE PREFER TO KEEP LAND FALLOW THAN TO
LEASE OUT
THERE IS LACK OF MUTUALLY SUPPORTIVE AGRICULTURE INDUSTRY SYMBIOTIC LINKAGES THAT COULD LEAD TO
BETTER POST HARVEST MANAGEMENT AND HIGHER VALUE
ADDITION IN THE AGRICULTURE SECTOR
TASKS AHEAD
REFORM IN THE LAND POLICY FOR ACCELERATED
AGRICULTURAL GROWTH AND POVERTY REDUCTION
A PARADIGM SHIFT FROM SUBSISTENCE FARMING TO
MARKET ORIENTED COMMERCIAL AGRICULTURE
IMPROVE VIABILITY OF SMALL AND MARGINAL FARMS
ENABLE SMALL FARMS TO BENEFIT FROM AGRICULTURAL
DIVERSIFICATION AND VALUE ADDITION
MEANS
PROMOTE CONTRACT FARMING
LEGALIZE AND LIBERALIZE LAND LEASING
PROMOTE LAND SHARE COMPANIES IN AGRICULTURE
THESE WILL FORM PARTS OF A BROAD BASED AND
INTEGRATED REFORM OF LAND POLICY FOR ACCELERATED
AND SMALL FARMERS FRIENDLY AGRICULTURAL GROWTH
CONCEPT OF CONTRACT FARMING
CONTRACT FARMING REFERS TO A SYSTEM OF FARMING IN
WHICH AGRO-PROCESSING OR TRADING UNITS ENTER INTO A
CONTRACT WITH FARMERS TO PURCHASE A SPECIFIED
QUANTITY OF ANY AGRICULTURAL COMMODITY AT A PREAGREED PRICE
IT PROVIDES AN ASSURED MARKET AND PRICE FOR AN
AGRICULTURAL COMMODITY WHICH IS CRUCIAL FOR
DIVERSIFIED AGRICULTURAL GROWTH
IT HELPS IMPROVE CROP YIELDS AND INCOME
IT ENABLES THE SMALL AND MARGINAL FARMERS TO
PARTICIPATE IN COMMERCIAL FARMING, AS THE COMPANY
WILL PROVIDE THEM WITH QUALITY INPUTS AND TECHNICAL
GUIDANCE
SOME EXAMPLES OF CONTRACT FARMING
HIDUSTRAN LEVER LTD/PEPSICO IN TOMATO IN PUNJAB
PEPSICO IN BASMATI RICE IN PUNJAB
MAXWORTH IN HORTICULTURE CROPS IN ANDHRA
PRADESH, KARNATAKA AND TAMIL NADU
VST NATURAL PRODUCTS LTD. IN CUCUMBER/PEPRIKA IN
ANDHRA PRADESH
NDDB IN BANANA IN MAHARASHTRA
CADBURY IN COCOA IN KARNATAKA
SEVERAL OTHERS IN SUGARCANE, TOBACCO, OIL PALM
DAIRY, POULTRY, AQUACUTURE ON SMALL SCALE
MAJOR IMPEDIMENTS TO GROWTH OF
CONTRACT FARMING
INFORMAL NATURE OF CONTRACT FARMING WITHOUT ANY
LEGAL PROTECTION
SHARE CROPPERS AND UNDER-RYOTS WHO DO NOT ENJOY
SECURITY OF TENURE FAIL TO PARTICIPATE IN CONTRACT
FARMING
THE BARGAINING POWER OF UNORGANIZED FARMERS VIS-AVIS THE COMPANY REMAINS WEAK
LACK OF EFFECTIVE LINKAGE BETWEEN THE COMPANY AND
AGRICULTURAL RESEARCH AND EXTENTION SYSTEM IN
MATTER OF TECHNOLOGY DIFFUSION
POLICY RECOMMENDATIONS ON CONTRACT
FARMING
AN INSTITUTIONAL ARRANGEMENT TO RECORD/REGISTER
ALL CONTRACTUAL ARRANGEMENTS TO PROMOTE
CONFIDENCE BETWEEN THE PARTIES AND ALSO HELP SOLVE
ANY DISPUTE, ARISING OUT OF VIOLATION OF CONTRACT
DISPUTE SETTLEMENT MACHINERY
NEED FOR TRANSPARENT, PARTICIPATORY, COMPREHENSIVE
AND FLEXIBLE CONTRACT
A PROVISION FOR BOTH FORWARD AND BACKWARD
LINKAGES
BANK ACCOUNT OF ALL CONTRACT FARMERS AND
AVAILABILITY OF AEQUATE CREDIT FACILITY
CONTRACT FARMERS’ SELF-HELP GROUPS OR ASSOCIATION
OR COOPERATIVES AT THE PLANT LEVEL WHICH WILL
IMPROVE THEIR BARGAINING POWER VIS A VIS THE
COMPANY
SELECTION OF APPROPRIATE PLANT VARIETY FOR HIGHER
YIELDS AND INCOME
COVERAGE OF CONTRACT FARMERS BY INSURANCE PREMIUM
BEING SHARED BY BOTH THE FARMERS AND THE COMPANY
LEGALIZE AGRICULTURAL TENANCY FOR ENABLING THE
TENANT FARMERS TO BENEFIT FROM CONTRACT FARMING
POLITICAL CONSENSUS TO PROMOTE CONTRACT FARMING
A CONDUCIVE POLICY ENVIRONMENT FOR ENCOURAGING
NATIONAL AND INTERNATIONAL COMPANIES TO PROMOTE
CONTRACT FARMING BY CREATING AN APPROPRIATE LEGAL,
POLITICAL AND ADMINISTRATIVE SYSTEM AS WELL AS
NECESSARY INFRASTRUCTURE
AMEND APMC ACTS AND OTHER RELEVANT LAWS TO PERMIT
FORWARD TRADING/CONTRACT FARMING / DIRECT
MARKETING AS AN ALTERNATIVE TO REGULATED MARKETS
EXEMPT AGRO-PROCESSING UNITS FROM LOCAL TAXES,
MARKET FEES ETC.
IDENTIFICATION OF SOME COMMODITIES BY GOVERNMENT
IN EACH STATE FOR INITIAL EXPOSURE AND RAPID
IMPLEMENTATION OF THE CONCEPT, IN COLLABORATION
WITH THE PARTICIPATING COMPANY
DEVELOP ADEQUATE INFRASTRUCTURE FACILITIES SUCH AS
ROADS, PUBLIC TRANSPORT, TELEPHONES, POSTAL
SERVICES, STABLE POWER AND WATER SUPPLIES,
GODOWNS, COLD STORAGE FACILITIES ETC.
REFORM PUBLIC RESEARCH AND EXTENSION SYSTEMS
PROVIDE NECESSARY GUIDELINES FOR LAND USE PLANNING
IN DIFFERENT REGIONS IN ORDER TO PREVENT ANY
EROSION OF BIODIVERSITY DUE TO CONTRACT FARMING
LEGAL RESTRICTIONS ON LAND LEASING IN
VARIOUS STATES
STATES/REGIONS WHERE LEASING OUT OF AGRICULTURAL
LAND IS LEGALLY BANNED, EXCEPTING BY THE DISABLED,
ARMED PERSONNEL ETC.
TELENGANA AREA OF ANDHRA PRADESH, BIHAR, KARNATAKA,
MADHYA PRADESH, UTTAR PRADESH
STATE WHERE LEASING OUT OF AGRICULTURAL LAND IS
TOTALLY PROHIBITED, WITHOUT ANY EXCEPTION
KERELA
STATES WHERE LEASING IS NOT BANNED, BUT THE SUBTENANT ACQUIRES A RIGHT TO PURCHASE THE LEASED IN
LAND WITHIN A SPECIFIED PERIOD OF CREATION OF TENANCY
GUJARAT, MAHARASHTRA, PUNJAB AND HARYANA
STATES/REGIONS WHERE THERE ARE NO RESTRICTIONS ON
LAND LEASING
ANDHRA AREA OF ANDHRA PRADESH, ORISSA, RAJASTHAN,
TAMIL NADU AND WEST BENGAL, ALTHOUGH IN WEST
BENGAL ONLY SHARE CROPPING TENANCY IS PERMITTED
MAIN ARGUMENTS IN FAVOUR OF
LEGALIZATION OF LAND LEASING
LEGALIZATION OF LEASING WOULD INCREASE
OCCUPATIONAL MOBILITY OF PEOPLE
IT WILL IMPROVE THE AVAILABILITY OF LAND IN THE LEASE
MARKET AND ALSO POOR PEOPLES ACCESSIBILITY TO LAND
TRHOUGH LEASING
IT WILL DISCOURAGE LAND BEING KEPT FALLOW AND
RESULT IN BETTER UTILIZATION OF LAND, FULLER
UTILIZATION OF LABOUR AND INCREASED FARM OUTPUT
IT WOULD PROMOTE BOTH FARM AND NON-FARM
DEVELOPMENT BY IMPROVING THE LAND OWNERS ABILITY
AND INCENTIVE TO INVEST
MAJOR RECOMMENDATIONS ON LAND LEASING
REVIEW, SIMPLIFY AND LIBERALIZE LAND LEASING LAWS
TO PROMOTE BOTH AGRICULTURAL EFFICIENCY AND EQUITY
LEAGALIZE LAND LEASING IN ALL AREAS WITHIN EXISTING
CEILING LIMITS
REMOVE THE CLUASE OF ADVERSE POSSESSION OF LAND IN
THE LAND LAWS OF VARIOUS STATES AS IT INTERFERES
WITH FREE FUNCTIONING OF LAND LEASE MARKET
RECORD ALL CASES OF LAND LEASING
ALLOW AUTOMATIC RESUMPTION OF LAND AFTER THE
AGREED LEASE PERIOD
ENTITLE AND FACILITATE ALL TENANTS INCLUDING SHARE
CROPPERS TO ACCESS SHORT TERM BANK CTREDIT, AGAINST
PLEDING OF EXPECTED OUTPUT
REPLACE THE SYSTEM OF SHARE CORPPING BY FIXED CASH
OR FIXED PRODUCE SYSTEMS OF LEASING WHICH ARE
RELATIVELY MORE EFFICIENT
ABOLISH THE EXISTING SYSTEM OF REGULATION OF RENT BY
THE STATE. THE MARKET RENT, AS AGREED UPON IN WRITING
BY THE LESSOR AND LESSEE SHOULD PREVAIL
CONCEPT OF LAND SHARE COMPANY IN
AGRICULTURE
THIS IS A RELATIVELY NEW CONCEPT
IN RECENT YEARS, THE PEOPLE’S REPUBLIC OF CHINA HAVE
EXPERIMENTED WITH A LAND STOCK SHARE SYSTEM IN
SOME PROVINCES. ALSO, RUSSIA HAS PASSED A LAW TO
FACILITATE SUCH EXPERIMENTS
LAND SHARE COMPANIES COULD BE ON THE LINE OF EITHER
PRODUCER COMPANIES OR JOINT STOCK COMPANIES OR
COMPANY - FARMER PARTNERSHIP WHERE THE FARMERS
COLLECTIVELY MOBILIZE THEIR RESOURCES, GAIN ACCESS
TO MODERN TECHNOLOGY AND EMPLOY PROFESSIONALS TO
MANAGE ENTERPRIZES THAT SERVE THEIR NEEDS
THIS WILL HELP IN REALIZING THE FULL POTENTIALS
OF ECONOMIC GROWTH IN RURAL AREAS IN GENERAL
AND CREATING ADDITIONAL EMPLOYMENT
OPPORTUNITIES AND INCOME FOR THE EXISTING
NON-VIABLE SMALL AND MARGINAL LANDHOLDERS
SUGGESTED RULES/GUIDELINES FOR THE
FORMATION OF LAND SHARE COMPANY
THE ACCESS TO SHARES OF LAND SHARE COMPANY SHOULD
BE LARGELY RESTRICTED TO FARMERS/LAND HOLDERS
ONLY, WHO ARE PREPARED TO LEASE OUT LAND TO THE
COMPANY ON LONG TERM BASIS AGAINST ISSUE OF
SHARE(S).
ALSO THERE SHOULD BE A PROVISION TO INCLUDE ALL
FARMERS OF A VILLAGE OR OF ANY CLUSTER OF VILLAGES.
EACH FARMER I.E. LAND HOLDER WILL BE ALLOTTED
SHARE(S) OF THE COMPANY ACCORDING TO THE MARKET
VALUE OF THE LAND BEING BROUGHT IN (ON LEASE TERMS)
BY THE FARMER AS SHARE CAPITAL
THE LAND SHARE COMPANY WILL OPERATE ON COMMERCIAL
BASIS
THE MANAGEMENT OF THE AFFAIRS OF THE LAND SHARE
COMPANY WILL BE IN THE HANDS OF AN ELECTED BOARD OF
DIRECTORS. AS IN THE CASE OF COOPERATIVE AND OTHER
PRODUCER COMPANIES, VOTING WILL BE ON THE BASIS OF
ONE MEMBER ONE VOTE, IRRESPECTIVE OF THE VALUE OF
SHARE OF EACH MEMBER. HOWEVER, THE GENERAL BODY OF
MEMBERS WILL BE THE ULTIMATE AUTHORITY IN MATTERS
OF POLICY
EACH SHARE HOLDER (LAND OR CASH) WILL RECEIVE A
SHARE IN THE TOTAL PROFIT/DIVIDEND OF THE COMPANY
IN PROPORTION TO HIS SHARE HOLDING.
SHARES SHOULD BE HERTIABLE. IT SHOULD ALSO BE
TRANSFERABLE TO OTHER SHARE HOLDING MEMBERS.
HOWEVER, THE SHARES SHALL NOT BE PUBLICLY TRADED IN
ORDER TO AVOID ANY RISK OF TAKEOVER BY CORPORATES
OR OTHER NON-FARMING INTERESTS
THERE COULD BE A CONTRACT FARMING ARRANGEMENT
BETWEEN THE COMPANY AND THE SHARE HOLDING
FARMERS. THE COMPANY WILL PROVIDE NOT ONLY
ASSURED MARKET FOR THE FARM PRODUCE, BUT ALSO
ENSURE SUPPLY OF QUALITY SEEDS, INPUTS AND CREDIT TO
THE FARMERS OPTING FOR CONTRACT FARMING
THE COMPANY BASED ON LAND SHARE SYSTEM SHOULD BE
ELIGIBLE TO RECEIVE CONCESSIONAL CREDIT AND OTHER
INVESTMENT SUBSIDIES/TAX EXEMPTIONS ALLOWED FOR
THE PROMOTION OF AGRO-PROCESSING ENTERPRISES
THE COMPANY SHOULD HAVE THE RIGHT TO CONVERT
AGRICULTURAL LAND FOR NON-AGRICULTURAL USES,
INCLUDING FOR PLANT SITES AND OTHER NECESSARY
INFRASTRUCTURE FOR THE PURPOSE OF ITS BUSINESS WITH
THE CONSENT OF MAJORITY OF SHARE HOLDERS. TO THE
EXTENT POSSIBLE, THE COMPANY SHOULD AVOID
CONVERTING AND USING AGRICULTURAL LAND BELONGING
TO SMALL AND MARGINAL FARMERS AND TRIBAL FARMERS TO
NON-AGRICULTURAL USES
IN THE EVENT OF LIQUIDATION OF THE COMPANY, THE SHARE
HOLDERS, PARTICULARLY SMALL AND MARGINAL FARMERS
AND TRIBALS SHOULD GET BACK THEIR LAND RIGHTS IN
RESPECT OF LAND COVERED BY THE SHARE HOLDING
CONCLUSIONS
THE ABOVE MENTIONED REFORMS WOULD BE CRUCIAL FOR
THE GROWTH OF MARKET ORIENTED AGRICULTURE,. RURAL
DIVERSIFICATION AND VALUE ADDITION
THESE WILL IMPROVE THE VIABILITY OF SMALL OFARMS AND
ENABLE THEM TO BENEFIT FROM MARKET LED COMMERCIAL
AGRICULTURE
THESE WILL HELP PROMOTE BOTH FARM AND NON-FARM
DEVELOPMENT
THANKS