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Tenancy Reforms in India

Written by: Jayant Bhatt-Amity Law School, New Delhi
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  • Productivity in agriculture is mainly dependent on two sets of factors, they are technological and institutional. Among the technological factors are the uses of agricultural inputs and methods such as improved seeds, fertilizers, improved ploughs, tractors, harvesters, irrigations etc. All these factors help to raise productivity, even if no land reforms are introduced. On the other hand the institutional reforms include the redistribution of land ownership in favour of the cultivating classes so as to provide them a sense of participation in rural life, improving the size of farms, providing security of tenure, regulation of rent etc. Also these institutional factors, such as the existence of feudal relations, small size of farms, sub-division and fragmentation, insecurity of tenancy rights, high rents, etc. help the peasantry to raise production.

    When the socialist school of thought emerged, they believe that the existence of feudal or semi-feudal relations was the real cause of backwardness and poverty in the Indian rural communities. The other school of though that emerged believes that agricultural productivity is purely a technological phenomenon and can be raised by the application of superior agricultural methods. Thus, whereas the key to higher productivity lies in technological change according to one school, it lies in institutional reform according to the other. Quite recently, both the schools of thought are converging and opinion has come to the idea that land reforms and technological change are not mutually exclusive factors but are complementary in the process of agricultural development.

    The purpose of land reform and thus the tenancy reform is twofold. On one hand, it aims to make more rational use of the scarce land resources by affecting conditions of holdings, imposing ceilings and floors on holdings so that cultivation can be done in the most economical manner, i.e., without any waste of labour and capital. On the other hand, it is a means of redistributing agricultural land in the favour of less privileged classes, and of improving the terms and conditions on which the land is held for cultivation by the actual tillers, with a view to end exploitation.

    Scope of Land Reforms
    Land reforms in general and tenancy reforms in particular aim at redistributing ownership holding from the view point of social justice, and reorganizing operational holdings from the viewpoint of optimum utilization of land. Apart from this, the problem of tenancy i.e., the rights and conditions of holding land also come under the scope of land reforms.

    The entire concept aims at the abolition of intermediaries and bringing the actual cultivator in direct contact with the state. The provisions of security of tenancy and rent regulation provide a congenial atmosphere in which the agriculturist feels sure of reaping the fruits of his labour. The scope of land reforms therefore entails abolition of intermediaries, tenancy reforms, i.e., regulation of rent, security of tenure for tenants and conferment of ownership on them. It also focuses on land ceiling and land holdings, agrarian reorganization including consolidation of holdings and preventing of sub-division and fragmentation and organization of cooperative farms.

    Land Tenure
    At the time of independence, there existed three types of proprietary land tenures in the country. The term land tenure is used to refer to the terms and conditions on which land is held and used.

    1. The Zamindari or Landlord Tenure

    Lord Cornwallis is considered to be the father of Zamindari system in India. He introduced this system for the first time in 1793 in West Bengal and was later adopted in other states as well. Under this system, the land was held by a person who was responsible for the payment of land revenue. They could acquire the land mostly free of charge from the government during the British rule and it is called estate. Landlords never cultivated the land they owned and rented them out to the cultivators. The amount of land revenue may either be fixed once one for all when it was called ?permanent settlement? or settlement with regard to land revenue may only be temporary and may, therefore, be revised after every 30-40 years, as the practice may be. The Zamindari system is known as absentee landlordism. In this system between the actual state and the tiller there grew an intermediary who was interested in the land only to the extent of extraction of exorbitant rent. The Zamindari tenure covered about 57 percent of the area of the country.

    2. Ryotwari System

    It took its birth in 1792 in Madras at the hands of Caption Read and Thomas Menro and was later extended to other states. Under this system, the responsibility of paying land revenue to the Government was of the cultivator himself and there was no intermediary between him and the state. The ryot had full right regarding sale, transfer and leasing of land and could not be evicted from the land as long as he pays the land revenue. But the settlement of land revenue under ryotwari system was done on a temporary basis and are periodic, after 20, 30 or 40 years.

    3. The Mahalwari or The Joint Village Tenure

    This system was introduced by William Bentinck in Agra and Oudh and was later extended to Madhya Pradesh and Punjab. Under this system, the village communities held the village lands commonly and it was joint responsibility of these communities to make payments of the land revenue.

    Thus the overall system of collection of revenue was based on exploitation. The British government snatched away whatever surplus above the minimum subsistence the cultivator produced. The latter were forced to lead a wretched life of slavery and deprivation. Under the above-mentioned systems the practice of cultivation by tenants became widely prevalent. These tenants were also exploited in a number of ways. It was basically to stop the exploitation of the actual tillers of the soil and pass on the ownership of the land to them that land reforms introduced in the post-independence period in India.

    Tenancy reforms

    The land reforms refer to the reforming of defective structure of the land holdings and are a planned and institutional organization of the relation between man and land. The agriculture system that existed at the time of independence consisted of several defects including that of tenancy i.e., the insecurity of tenure and high rents charged by the landlord. The reforms aimed to eliminate all forms of exploitation and social injustice within the agrarian system, to provide security for the tiller of the soil and to remove such impediments to increase in agricultural production as arise from the agrarian structure inherited from the past. One of the major aspects of the land reforms in India has been the tenancy reform.

    Under the Zamindari and ryotwari systems, tenancy cultivation had been quite common in India. Tenancy cultivation may be done by small proprietors who find that they have an insufficient quantity of land or it may be carried on by landless labourers. Sometimes, the tenants holding land from an intermediary may sub-let it for cultivation. Broadly speaking tenants are divided into three categories:
    1. Occupancy tenants-enjoyed permanent and heritable rights on land. They had security of tenure and could claim compensation from the landlords for any improvement affected on the land.

    2. Tenants at will-did not have security of tenure and could be evicted from the land whenever landlord so desired. There is no security of tenure for them and they are also made to pay exorbitant rent to the landlords.

    3. The Sub tenants-were appointed by the occupancy tenants.
    The rights of tenancy are permanent and heritable. The tenants can also receive some compensation from the landlords incase they make some improvements on the land. The tenants enjoy a fixity and security of tenure, which makes them the virtual owners of the land. It can be said that the only difference between the occupancy tenant and the peasant proprietor is that the former is required to pay rent to the landlord and the latter to pay the land revenue to the state. So, for all practical purposes, occupancy tenants are treated as land owners. The position of tenants at will and that of sub-tenants is extremely weak and mostly they are subjected to ruthless exploitation. Frequent enhancement of rent, eviction of minor pretexts of several kinds, extractions and beggar are some of the popular ways of exploitation. In a country like India where the demand of land is more than its supply on account of its growing population, exploitation of weak and unprotected is a widespread evil. Fifty percent of the produce was the normal rent under Batai or sharecropping. On several occasions, the peasant had to forgo even two thirds of the produce as rent.

    The tenancy cultivation suffers from three main defects; they are insecurity of tenure, rack-renting and lack of incentives of the actual cultivator. The National Sample Survey (8th round) had estimated that in 1953-54 about 90 percent of agriculture land was under tenancy system. The percentage of area leased out varied from 11 to 26 percent, though the all India average was 20 percent. It showed that about one-fifth of the total area was held under tenancy and thus it was not possible to ignore a problem affecting such a wide area. According to the 1961 census, 77 percent of the total-cultivating households were in the nature of ownership holdings, 8 percent of pure tenancy and 15 percent in mixed tenancy.

    Besides this open tenancy, there is a considerable amount of land leased out on the basis of oral or hidden tenancy that accounts for anything between 35-40 percent of the total cultivated area. The informal or the oral tenancy has been a common feature of traditional agricultural societies. Although attempts have been made to provide security of tenure, redistribution of land and fixation of fair rents, yet informal or oral tenancy has continued to exist even to this day. The term informal tenancy is referred to as oral tenancy which refers to tenancy without legal sanctions and permissions, or without any written agreement. The principal of shifting to informal tenancy is to extract higher land rents from the tenants. This is primarily done so as to get high yielding varieties programme that has brought a realization among the landlords that land is a very valuable asset and promises high rates of return. India, which is marked by land hunger, it is possible here to take advantage of the situation by charging higher rents. Also, informal tenancy arrangements are a convenient device with the landlords for nullifying tenancy reforms. Thus, unrecorded or clandestine tenancy perpetuates a semi-feudal land system that was sought to be abolished by measures of land reforms.

    Measures of Tenancy Reforms
    The legislation for abolition of intermediaries was aimed at providing land to the tiller but it did not put an end to the problem of tenancy. Moreover, even with the limit of ceiling, it may not be possible for a family to cultivate the entire land and so some sub-letting is unavoidable. Besides, in order to induce agricultural population to take over non-agricultural occupations, some sub-letting to tenants may be allowed. A total ban on letting or sub-letting land would neither be socially desirable nor administratively practicable. That is why measures were taken up so as to minimize the evils of tenancy cultivation and to safeguard the interest of the tenants.

    Regulation of rents: during the pre-independence period, rents were fixed either by the custom or were the result of the market forces of demand and supply. Supply of land being fixed, the demand of land rowing with an increasing population, there has been a continuous tendency for rents to rise. The decay of handicrafts increased the dependence of land further and thus pushed up the rents. Rack-renting was a common feature of the Indian agrarian structure.
    It was, therefore, imperative that rents should be fixed by enacting legislation. The rates of rent prevalent were one half of the produce or more. Considering the return on investment in other sectors of economy, these rents were excessive by any standard of social justice.

    Consequently, the First and the Second five-year plan recommended that rents should not exceed one fourth or one fifth of the gross produce. Various states have passed necessary legislation regulating rents, but there are large variations in the rents fixed in different states. In Gujarat, Maharashtra, and Rajasthan, one-sixth of gross produce is fixed as maximum rent. In Assam, Karnataka, Manipur and Tripura, maximum rents vary between one-fourth to one-fifth of the gross produce. In Punjab,

    one-third of produce has been considered as fair rent, while in Tamil Nadu it is between 33.3 and 40 percent of the gross produce. In Andhra Pradesh one-fourth of the gross produce for irrigated land and one-fifth in other cases has been fixed as rent.

    Owing to the weak position of the tenants and the prevalence of the widespread land hunger, the law regulating rent is observed more in its breach then in its compliance. Another suggestion in this regard is to fix rents in cash rather than in kind. Historically, rents have been paid in kind in India but in view of the fact that the peasants have to make a good many payments in money, while purchasing seeds, fertilizers, implements and other necessaries of life, it would be desirable to switch over to cash payment of rents. This is in fitness with the requirements of a rural economy changing rapidly from barter to money economy.
    Security of Tenure: the security of tenure is aimed to provide some incentives to tenants to make certain improvements of permanent nature on the land they cultivate. Many states have, therefore, enacted legislation providing for the security of tenure so long as they continue paying the rent. In some states like Maharashtra, Gujarat etc., the landlord for his personal cultivation has granted tenants security of tenure in respect of areas not resumable. In some states, the minimum period of lease of land has been prescribed, e.g., five years in Punjab, Haryana, etc., and in Andhra Pradesh four years for one category of tenants and six years for another.

    Ownership rights: experience of the implementation of Zamindari abolition showed that, on the plea of resumption for personal cultivation, eviction of tenants took place on a massive scale. There is no doubt that in certain cases and categories on holder's resumption should be allowed, but the plea of resumption should not lead to large-scale ejectment of tenants. During the Second plan, states formed provisions for resumption broadly on the following patterns:
    1. All tenants have been given full security of tenure, without giving the owners the right of personal cultivation.

    2. Owners have been given the right to resume a limited area (not more than family holding in any case) subject, however, to the condition that a minimum area is left with a tenant.

    3. A limit has been placed on the extent of land which a land-owner may resume, but the tenant is not entitled to retain minimum area for cultivation in all cases.
    Thus the tenancy reforms aim at conferring the right of ownership of land on the tenants. To encourage hard-working tenants to become owned-cultivators, many state governments have given tenants the right to purchase their holdings. This right however, is subject to the condition that the total holdings of the landlords is not thereby reduced below the limit laid down for maximum holding of a landlord.

    Right of Ownership of Tenants: A very important feature of the land reform is the provision of the right of ownership of tenants. The Second plan considered it very desirable to bring tenants in non-resumable area in direct contact with the state. Earlier the right to purchase was optional to the tenants but this did not prove to be effective. Thus, the third plan suggested the optional clause to be removed and peasants be required to purchase land. Legislation for this purpose was enacted in various states. For instance, in West Bengal the tenants and sub-tenants have been brought into direct relationship with the state by the conferment of full ownership rights. In Punjab, the right to purchase is optional. Legislation has been enacted in Gujarat, Kerala, Madhya Pradesh, Maharashtra, Karnataka, Orissa, Rajasthan, Uttar Pradesh, West Bengal and the Union Territories. Whereas in Assam, Jammu and Kashmir and Tamil Nadu, no provisions exists even for an optional right of purchase. While the state can facilitate the transfer of ownership rights from the landlords to the tenants, no financial burden is imposed on the state.

    In case of voluntary surrenders, to check its evil two recommendations were made in the Third Plan. First, the volunteer surrenders of land by tenants should not be considered valid unless they were duly registered by revenue authorities, and second in case of voluntary surrenders, the land-owner should be entitled to undertake cultivation only to extent of his right resumption by law. There is much leeway to be covered in implementation in this regard so as to save the poor tenants-the most vulnerable, though the most important section in rural India. Legal Protection to Tenants unable to bring about redistribution of ownership of land, the legislation attempted to provide security of tenure to tenants, to fix land rents and condition of tenancy. Also, in order to enable tenants to obtain institutional credits, tenants should have the right to pledge their interests in land taken on rent by them. Some states have taken steps in this area of tenancy legislation. In few states, creation of a tenancy in future has been prohibited, i.e., only in special cases that also for a limited period of three years at a
    time. The steps for the Remission of rent for the tenants in times of famines or natural calamities when the landlord is given relief through the remission of land revenue have also been taken. Begar and other unauthorized levies have been declared illegal.

    Moreover the tenancy legislation being not comprehensive has failed to grasp the interdependence of fixation of ceiling on rents and security of occupancy rights. Myrdal focuses attention on this problem in the following words: ?In the absence of limits on rent, all rules about security of tenure can be nullified, the landlord can simply raise the rent beyond the tenants capacity to pay and legally evict him for non-payment. By the same token, legislation on maximum rentals is meaningless if not buttressed by security of tenancy. Besides this, legislation aimed to provide security to a minority of tenants who paid fixed rentals and left out the majority of sharecroppers who represented the more vulnerable section of the Indian peasantry.

    The most important beneficial result of the reform is that it put an end to the system of parasitic intermediaries. On the other hand it has not put an end to absentee ownership of land nor has it lead to the disappearance of tenancies. All in all, although the contribution of tenancy reforms could not be totally neglected but the programmes including these reforms since independence did not lead into any significant redistribution of land, or the removal of all the obstacles to increasing agricultural production. The policies adopted in case were ambivalent and there were large gaps between policy and legislation and implementation.

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