Allowing non-agriculturalists to buy agricultural land will spell disaster for the state's farmers who are largely dependent on money-lenders for credit.

Why changes to Karnatakas Land Reforms Act may worsen the agrarian crisis Image for representation
Coronavirus Land Reforms Saturday, June 20, 2020 - 17:27

It is no secret that Karnataka has been battling an agrarian crisis for quite some time now. Unavailability of water, failing crops, fluctuating prices of agricultural produce and mounting credit have put enormous pressure on farmers. In the period between 2014 and 2019, Karnataka has seen over 4,500 farmer suicides: a shocking average of two suicides per day.  

According to one estimate, Non-Performing Assets (NPAs) related to agriculture have grown by 900% in the period between 2010 and 2018. Further, agricultural NPAs constituted 36% of all bad loans in Karnataka in FY 2018-2019.

With the prevailing issues in Karnataka’s agriculture sector, we must be very watchful of any changes brought in by the government, which can have potential implications on the industry. 

Economic slow-down and the rise in unemployment has prompted state governments in many states to liberalise laws and regulations in a bid to attract investment. Amongst other things, the tedious procedures and existing impediments related to acquisition, conversion and transfer of land are considered to be major bottlenecks obstructing investment flow into the state. 

Relaxing norms to help industries 

In an attempt to address this issue, the Government of Karnataka recently passed an amendment to Section 109 of the Karnataka Land Reforms Act, 1961, allowing for the sale of agricultural land, purchased for the setting up industries, after a period of seven years; this option was not available earlier. 

Further, such projects which have been cleared by the State Level Single Window Clearance Committee (SLSWCC) shall now be exempt from the provisions of Section 63, 79A, 79B and 80 of the Karnataka Land Reforms Act, 1961. These sections acted as safeguards to farmers by keeping a check on the alienation and transfer of agricultural land to non-agriculturalists. It is also proposed to bring down the time-frame for land conversion from 60 days to 30 days. 

Allowing non-agriculturalists to buy agricultural land

Farmers have always been considered a vulnerable group and as such, they have been provided with various safeguards to protect their interests. Measures such as levying of custom duties on the import of agricultural produce, fixing of Minimum Support Prices (MSP) and restrictions on buying of agricultural land by non-agriculturalists have afforded farmers with protection from market forces. 

The recent proposed amendments to the Karnataka Land Reforms Act seek to take away some of these protections enjoyed by farmers. While the government insists that these amendments are in favour of farmers, it is imperative that we review the possible implications of these changes before arriving at a conclusion. 

The Government of Karnataka seeks to repeal Sections 63, 79A, 79B and 80 of the Karnataka Land Reforms Act, 1961 by introducing an Amendment Bill in the next Assembly session. 

Furthering his argument in support of such change, the Revenue Minister contended that this move will help high salaried professionals procure agricultural land in Karnataka and that it will result in the technological advancement of the agriculture industry. Further, it is contended that farmers will be able to secure a better price for their existing land due to a rise in demand for agricultural lands. 

While all that may be true to an extent, the vulnerability of distressed farmers cannot be disregarded. The rising suicides and NPAs suggest that currently, farmers are faced with a deep crisis. With the proposed changes, these distressed farmers may get lured by the economic opportunity to sell their land and may end up landless and without a source of livelihood. 

Section 80 of the Act specifically barred the transfer of land through sales, including sales in execution of a decree of a civil court, or mortgage in favor of a person who is not an agriculturalist or who doesn’t satisfy such other conditions contained therein. 

By repealing it, the government is jeopardizing the security and ownership of the land currently enjoyed by farmers. It is a well-known fact that farmers avail a major percentage of their credit from money-lenders. Once the proposed changes are implemented, farmers will be at the mercy of these money lenders who shall then be allowed to take possession of the mortgaged property. Furthermore, farmers may be forced to sell their land in execution of a civil court decree or to recover the arrears of land revenue.  

Landless labourers 

The proposed changes will mainly induce small and distressed farmers to sell their lands, while big farmers will make use of the higher ceiling limits and further consolidate their landholdings. It is very likely that if the proposed changes are implemented, the rural population may see a rise in the number of landless labourers. The employment opportunities for landless labourers are scarce as agricultural jobs are seasonal in nature. While the National Rural Employment Guarantee Act (MGNREGA) has provided some relief by offering 100 days of guaranteed work, most labourers still prefer to migrate to cities in search of more stable jobs. 

COVID-19 has exposed the extreme vulnerabilities of these migrant workers. In the absence of a proper regulatory framework, the government found it extremely difficult to cater to the needs of migrant workers. Any substantial addition to the number of migrant workers will only make matters worse. Relegating farmers to landless labourers, a very probable outcome of the proposed changes to the Act, is a scary scenario which must be vehemently opposed.

Need to balance the interest of farmers with industrial growth

The falling economic growth rate and rising unemployment, especially after COVID-19, call for drastic measures to attract investments and promote industrial growth. However, the same cannot be achieved at the cost of farmers. The government needs to find a proper balance between the two.

The supposed ‘reform’ intended to help farmers may prove to be counterproductive if implemented at a time when the industry is experiencing severe distress. Farmers in desperate need of money may find it convenient to sell their lands without consideration for the long-term implications; thus, reinforcing the need for protection of farmers’ interests by the government. 

Farmers will continue to be vulnerable until the issues affecting their income are addressed. Measures such as better irrigation facilities, lesser dependency on rain, higher Minimum Support Prices, availability of low-interest credit, effective crop insurances, and easier access to export their produce will go a long way in ensuring the self-sustainability of farmers. Until farmers reach this stage wherein they can make well-informed and independent decisions, it would be imprudent to go forward with the proposed changes; especially, in the absence of a framework to manage landless labourers.  

Views expressed are the author's own.

Mudassir Husain is an advocate practicing in Bengaluru who takes a keen interest in public policy.

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