Opinion

Plight of tenant farmers

K.V.KURMANATH | Updated on January 21, 2011 Published on January 13, 2011

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Tenant farmers, whose existence is not acknowledged in government records, are unable to access cheap finance. Their condition could deepen the crisis in agriculture.

Nature's recent fury in Andhra Pradesh has brought to the fore a serious but completely neglected problem in Indian agriculture. It is the issue of tenant farmers. Everyone knows they exist in large numbers, but no one acknowledges them on paper.

Their agreements with landowners have no legal sanction. The Government virtually has no record of tenancy farming in the State. It is not because their number is miniscule. They constitute half of the 1.20 crore farmers. About 60-80 per cent of farming in the rice bowl areas of East Godavari, West Godavari, Krishna and Guntur districts is being done by tenant farmers.

Unfortunately, the situation is not confined to Andhra Pradesh alone. This phenomenon holds good for all agriculturally developed States. A recent Government report estimated that the area under informal tenancy in the country varies between 15 per cent and 35 per cent of the total farm area. And 36 per cent of the total rural households leasing land are landless labourers and 47.5 per cent have land below 0.5 hectare.

NOT ON GOVT RECORDS

Notwithstanding the huge numbers, tenant farmers do not exist in revenue records! As a result, they are exposed to several problems. Absence of transparency in tie-ups with landlords makes them pay exorbitant and unreasonable payouts in cash and kind. In most cases, it is 50 per cent of the produce, if it is in kind. Or, they end up paying anywhere near between Rs 10,000 to Rs 60,000 depending on crop and area.

The next problem is financing. Doors of almost all institutional finance are shut on them as they do not carry any Government tag. As a result, they are forced to depend on money lenders, landlords, input sellers and micro-finance institutions. Obviously, this costs them heavily. Add to this, huge rentals, skyrocketing input prices and very high rate of interest (which goes up to 36 per cent) on loans push them to the edge.

When everything goes well, they can hope for repaying debts in order to make them ‘eligible' for loans in the following season. Any slight volatility in weather lands them in trouble.

ACCESS TO FINANCE

Farmers in Andhra Pradesh were in for, as some of them put it, the worst weather in recent memory. They were hit by three bouts of heavy downpour in the kharif. After each of them they pumped in investments in the hope of salvaging whatever remained. In some other cases, they had to sow afresh in order not to miss the season. As a result, their investments doubled and trebled depending on their location.

Though all farmers had suffered because of this unprecedented calamity, tenant farmers faced an additional burden of very expensive interest component. They get no insurance cover too because they can submit no land document or other supporting evidence to become eligible for insurance.

Not that the Government does not talk about the problems faced by tenant farmers. It always does the talking part very effectively and ‘advises' and ‘asks' banks to lend copiously to tenant farmers. It never happens because banks have to adhere to their norms. Unless the Government evolves a mechanism and gives them a tenancy card, it is very difficult for tenant farmers to get access to institutional credit and insurance.

AGREEMENT ISSUES

This, however, is not an easy task. Land owners dread the very idea of entering into official agreements with tenant farmers. Most of them have moved to towns and cities, realising the futility of being confined to agriculture. They know full well that it is no longer remunerative. On the other hand, tenancy gives them assured returns, no matter whether weather is favourable or not. Old farmers recall a phase 20-30 years ago when reverse tenancy (where the rich landowners used to take land from small and medium farmers) was in vogue.

You ask a Government official and he safely blames it on the victim. “Landowners do not like to enter any official agreement because they are afraid that their land would end in legal problems.

Those who want to take land on rent are not in a position to demand agreement on paper,” they would say.

Prof. K R Chowdhary, an agriculture economist, says Governments can take a cue from the West Bengal example and give cards to tenant farmers. “I'm not saying it is working miracles in that State. But at least there is a way to acknowledge the existence of tenant farmers,” he points out.

IMPACT ON FARMING

The most disturbing factor about tenancy is that it is impacting farmers belonging to backward classes and dalits most. A good number of tenant farmers belong to these sections.

After the rich landowners moved away from villages in search of other businesses, small and medium farmers and agricultural labourers belonging to the vulnerable sections tried to fill in the gaps.

This new breed of farmers has got nothing to fall back on in times of distress. Unless the Government gets down to work and factor in them while preparing plans we may end up with large tracts of arable land vacant in the next few years. Already neck deep in loans, they are not going to get any credit for next season. Even as it is, land use are going against the interests of agriculture in several States. If the system drives out tenant farmers from agriculture, more land will go out of agriculture.

With the problem of food security staring at us, can we afford this? Is the economy in a position to provide employment to a large number of jobless tenant farmers?



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Published on January 13, 2011
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