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Another model Act likely to enable lessee farmers to access credit

Sanjeeb Mukherjee/New Delhi 14 Feb 18 | 11:05 AM

Arun Jaitley in his Budget speech for 2018-19 had said that a suitable mechanism to enable lessee farmers to access credit without compromising rights of the landowners will be evolved

The Centre is looking to frame another model Act to give a sort of license to lessee cultivators without compromising on the legal rights of the landholder. The license would enable these farmers to avail the benefits of farm credit, crop insurance, and compensation in the event of a natural calamity.

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The proposed Model Land Cultivators License Act will enable states to give this sort of identity cards to farmers. 

Land is a state subject, it will incumbent on the states to either adopt the Model Act in full or in parts. The model Act will be in addition to NITI Aayog model Land Leasing Act.

This Act proposes legalization of leasing as well without impacting the legal ownership right of the holder. 

The model Act also advocated special tribunals as a last resort to solve disputes related to leases if local settlement mechanisms like panchayats and others fail.

So far, according to senior officials around 10 states have shown interest in amending the land lease laws, while others such as Madhya Pradesh has already amended their state laws.

The new Model Act, (Land Cultivators License Act) would also be sent to states for adoption once it is framed. 

The Centre’s committee on ‘Doubling Farmers Income’ has also in one of its recommendations advocated framing a separate model legislation to give a license to lessee farmers.

According to a study done by former Chairman of Commission for Agriculture Costs and Prices (CACP) and chairman of land policy cell of NITI Aayog, around 57 per cent of leased area in kharif and 54 per cent in rabi season are on short-term leases and do not have tenurial security and stability.

“We want to offer an entire bouquet of legislation and policy instruments through which farmers can be ensured better prices," a senior official said.

Finance Minister Arun Jaitley in his Budget speech for 2018-19 had said that NITI Aayog, in consultation with State Governments, will evolve a suitable mechanism to enable lessee farmers to access credit without compromising rights of the landowners.

“At present,  lessee cultivators are not able to avail crop loans. Consequently, a significant proportion of arable land remains fallow and tenant cultivators are forced to secure credit from usurious money lenders," Jaitley had told legislators.

Currently, Andhra Pradesh has a legislation to give a sort of licenses to lessee cultivators to access farm credit.

That apart, officials said the Centre is also looking at various models to make the 'Operations Greens' announced in 2018-19 work. The Operation Greens is aimed at promoting processing of tomato, onion and potato (TOP) in times of glut and boost supplies during the lean period. 

Officials said something like the Safal experience of Mother Diary or creating a holding company structure on the lines of NDDB is being looked at. 

In the SAFAL MODEL, procurement of vegetable is done from neighbouring areas directly and sold to consumers. 

In NDDB, there are designated state agencies which procure vegetables at the state level and then distribute among consumers.  

There is also a proposal to create a dedicated agency in states on the lines of milk unions for procurement and distribution of vegetables. 

Food Processing Minister Harsimrat Kaur Badal had said on Tuesday that the government would hold discussion with all stakeholders next week about ‘Operation Greens’. 

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