Model Act for farm land lease

An expert panel appointed by NITI Aayog has submitted its recommendations to create a model law to formalise leasing of agricultural land.

What necessitated this?

Due to lack of any legal framework for leasing, the informal tenants of agricultural land have, in many parts of the country, been deprived access to institutional credit, disaster relief, and other support services.

• The situation, where beneficiaries of agricultural support services have been the land-owners and not the actual tillers, has fuelled problems of farmer suicides, default on agricultural loans among others.
• Also, agricultural land leasing has hitherto been informal due to legal restrictions imposed by some states, and these restrictions have affected agricultural productivity growth.

What’s there in the proposed model law?

• One of the key objectives of the model law is to facilitate insurance, disaster relief, and bank credit to the tenant without mortgaging of the leased land. Since the draft model law moots clear ownership of land with the lessor, itdisallows using the asset for mortgage purposes.
• The Act is meant for States that plan to legalise farm land leasing. State governments are expected to improvise it to suit the local socio-political requirements.
• 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. No changes will be made in the land records.
• Attestation of the lease is proposed to be done at the level of the sarpanch, local bank official or notary.
• The Model Act also 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 proposed model law, however, does not restrict the owner of the land from selling the asset even during the lease period, as long as the cultivation rights of the tenant are not affected.

Background:

To review the existing agricultural tenancy laws of various states and prepare a model agricultural land leasing act, the NITI Aayog, in September 2015, had set up an Expert Committee on Land Leasing headed by T Haque. Prior to submitting its report to the NITI Aayog, the committee held several rounds of discussion with states, farmer organisations and civil society groups.