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LATEST NEWS UPDATES | India needs to trust its farmers and set them free -Shruti Rajagopalan </title>
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<h1 class="cat-box-title">India needs to trust its farmers and set them free -Shruti Rajagopalan</h1>
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Published on</span><span class="text-date"> Mar 21, 2018</span>
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<div align="justify">-Livemint.com<br /><br /><em>The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming<br /></em><br />Farmers have a bad romance with the Indian polity. On the one hand, India loves, even worships, these farmers. On the other, Indian policymakers create the most impossible regulatory environment for the agricultural sector, trapping farmers in a low-income, low-productivity occupation. The latest protest in Maharashtra is just another reminder of the hardships the average Indian farmer faces.<br /><br />The basic malady is known—too many people are unproductively engaged in agriculture, depressing agricultural incomes. The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming. But the entangled myriad state-level regulation has gotten in the way.<br /><br />Barriers to entry into the labour market are well known. Oppressive labour regulation creates a large, vulnerable and informal market that is less attractive for farmers, and job creation has not kept pace with population growth trends. The bigger problem for farmers, however, is the barriers to exit, which has attracted little discussion in policy circles.<br /><br />Typically, while trying to leave the agricultural sector, land owners may wish to sell, lease, or use their land for non-agricultural purposes. However, Indian states have very restrictive regulation on sale, tenancy and land use, making it quite difficult to exit agriculture.<br /><br />First, it is quite difficult to sell agricultural land. Most state laws only allow Indian resident individuals to acquire agricultural land. Not even all resident Indians are allowed to buy land, the sale can only be made to an agriculturist. In the 1950s, policy-makers believed that non-agriculturists would attempt to hoodwink farmers by buying their land at throwaway prices with little intention to farm. They feared this would lead to increase in food prices and leave naïve and illiterate farmers vulnerable. To prevent this, most states permitted only agriculturists to buy agricultural land; the definition of an agriculturalist (often based on income from non-agricultural sources) tends to be restrictive, though different in each state. If one does find an agriculturist willing to buy land, this buyer is limited in the acreage that can be bought (sometimes as low as 10 acres).<br /><br />This prevents entrepreneurs from investing in agriculture. And by limiting income from other sources, it prevents entrepreneurs from diversifying their investments. The restrictions on size prevent new entrants to large scale-farming. These state laws, intending to protect farmers, have unintentionally made the market for agricultural land smaller, and consequently depressed land prices.<br /><br />Second, to use agricultural land for non-agricultural purposes, states require owners to obtain a change of land use certificate—a process that involves a number of permissions. In most states, this may take years and a hefty sum in bribes. This makes it difficult for farmers to exit agriculture by using the land for a different purpose. In a country that is quickly urbanizing, with a large number of potential developers trying to buy land, this is one of the worst regulations affecting farmers. The new use allowed after acquiring the certificate increases the value of land. This has resulted in a dual market for agricultural land (and therefore two prices)—one with the change of land use certificate and one without. The certificate in hand can command between 10-40 times the price of land without such a certificate. However, in most states, only the buyer can request this certificate, leaving farmers trapped because they only get the depressed price for their land which can only be used for agriculture purposes. <br /><br />Please <a href="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html" title="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html">click here</a> to read more.<br /><br /></div>
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<br><a href="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html" class="re" target="_blank">Livemint.com, 20 March, 2018, http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html</a><div class="clear"></div>
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<h1 class="cat-box-title">India needs to trust its farmers and set them free -Shruti Rajagopalan</h1>
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<div align="justify">-Livemint.com<br /><br /><em>The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming<br /></em><br />Farmers have a bad romance with the Indian polity. On the one hand, India loves, even worships, these farmers. On the other, Indian policymakers create the most impossible regulatory environment for the agricultural sector, trapping farmers in a low-income, low-productivity occupation. The latest protest in Maharashtra is just another reminder of the hardships the average Indian farmer faces.<br /><br />The basic malady is known—too many people are unproductively engaged in agriculture, depressing agricultural incomes. The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming. But the entangled myriad state-level regulation has gotten in the way.<br /><br />Barriers to entry into the labour market are well known. Oppressive labour regulation creates a large, vulnerable and informal market that is less attractive for farmers, and job creation has not kept pace with population growth trends. The bigger problem for farmers, however, is the barriers to exit, which has attracted little discussion in policy circles.<br /><br />Typically, while trying to leave the agricultural sector, land owners may wish to sell, lease, or use their land for non-agricultural purposes. However, Indian states have very restrictive regulation on sale, tenancy and land use, making it quite difficult to exit agriculture.<br /><br />First, it is quite difficult to sell agricultural land. Most state laws only allow Indian resident individuals to acquire agricultural land. Not even all resident Indians are allowed to buy land, the sale can only be made to an agriculturist. In the 1950s, policy-makers believed that non-agriculturists would attempt to hoodwink farmers by buying their land at throwaway prices with little intention to farm. They feared this would lead to increase in food prices and leave naïve and illiterate farmers vulnerable. To prevent this, most states permitted only agriculturists to buy agricultural land; the definition of an agriculturalist (often based on income from non-agricultural sources) tends to be restrictive, though different in each state. If one does find an agriculturist willing to buy land, this buyer is limited in the acreage that can be bought (sometimes as low as 10 acres).<br /><br />This prevents entrepreneurs from investing in agriculture. And by limiting income from other sources, it prevents entrepreneurs from diversifying their investments. The restrictions on size prevent new entrants to large scale-farming. These state laws, intending to protect farmers, have unintentionally made the market for agricultural land smaller, and consequently depressed land prices.<br /><br />Second, to use agricultural land for non-agricultural purposes, states require owners to obtain a change of land use certificate—a process that involves a number of permissions. In most states, this may take years and a hefty sum in bribes. This makes it difficult for farmers to exit agriculture by using the land for a different purpose. In a country that is quickly urbanizing, with a large number of potential developers trying to buy land, this is one of the worst regulations affecting farmers. The new use allowed after acquiring the certificate increases the value of land. This has resulted in a dual market for agricultural land (and therefore two prices)—one with the change of land use certificate and one without. The certificate in hand can command between 10-40 times the price of land without such a certificate. However, in most states, only the buyer can request this certificate, leaving farmers trapped because they only get the depressed price for their land which can only be used for agriculture purposes. <br /><br />Please <a href="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html" title="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html">click here</a> to read more.<br /><br /></div>
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<h1 class="cat-box-title">India needs to trust its farmers and set them free -Shruti Rajagopalan</h1>
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<div align="justify">-Livemint.com<br /><br /><em>The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming<br /></em><br />Farmers have a bad romance with the Indian polity. On the one hand, India loves, even worships, these farmers. On the other, Indian policymakers create the most impossible regulatory environment for the agricultural sector, trapping farmers in a low-income, low-productivity occupation. The latest protest in Maharashtra is just another reminder of the hardships the average Indian farmer faces.<br /><br />The basic malady is known—too many people are unproductively engaged in agriculture, depressing agricultural incomes. The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming. But the entangled myriad state-level regulation has gotten in the way.<br /><br />Barriers to entry into the labour market are well known. Oppressive labour regulation creates a large, vulnerable and informal market that is less attractive for farmers, and job creation has not kept pace with population growth trends. The bigger problem for farmers, however, is the barriers to exit, which has attracted little discussion in policy circles.<br /><br />Typically, while trying to leave the agricultural sector, land owners may wish to sell, lease, or use their land for non-agricultural purposes. However, Indian states have very restrictive regulation on sale, tenancy and land use, making it quite difficult to exit agriculture.<br /><br />First, it is quite difficult to sell agricultural land. Most state laws only allow Indian resident individuals to acquire agricultural land. Not even all resident Indians are allowed to buy land, the sale can only be made to an agriculturist. In the 1950s, policy-makers believed that non-agriculturists would attempt to hoodwink farmers by buying their land at throwaway prices with little intention to farm. They feared this would lead to increase in food prices and leave naïve and illiterate farmers vulnerable. To prevent this, most states permitted only agriculturists to buy agricultural land; the definition of an agriculturalist (often based on income from non-agricultural sources) tends to be restrictive, though different in each state. If one does find an agriculturist willing to buy land, this buyer is limited in the acreage that can be bought (sometimes as low as 10 acres).<br /><br />This prevents entrepreneurs from investing in agriculture. And by limiting income from other sources, it prevents entrepreneurs from diversifying their investments. The restrictions on size prevent new entrants to large scale-farming. These state laws, intending to protect farmers, have unintentionally made the market for agricultural land smaller, and consequently depressed land prices.<br /><br />Second, to use agricultural land for non-agricultural purposes, states require owners to obtain a change of land use certificate—a process that involves a number of permissions. In most states, this may take years and a hefty sum in bribes. This makes it difficult for farmers to exit agriculture by using the land for a different purpose. In a country that is quickly urbanizing, with a large number of potential developers trying to buy land, this is one of the worst regulations affecting farmers. The new use allowed after acquiring the certificate increases the value of land. This has resulted in a dual market for agricultural land (and therefore two prices)—one with the change of land use certificate and one without. The certificate in hand can command between 10-40 times the price of land without such a certificate. However, in most states, only the buyer can request this certificate, leaving farmers trapped because they only get the depressed price for their land which can only be used for agriculture purposes. <br /><br />Please <a href="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html" title="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html">click here</a> to read more.<br /><br /></div>
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<br><a href="http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html" class="re" target="_blank">Livemint.com, 20 March, 2018, http://www.livemint.com/Opinion/Ur1gpECTWdd3VnbpuuUD9O/India-needs-to-trust-its-farmers-and-set-them-free.html</a><div class="clear"></div>
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LATEST NEWS UPDATES | India needs to trust its farmers and set them free -Shruti Rajagopalan
India needs to trust its farmers and set them free -Shruti Rajagopalan
Published on Mar 21, 2018
Modified on Mar 21, 2018
-Livemint.com
The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming
Farmers have a bad romance with the Indian polity. On the one hand, India loves, even worships, these farmers. On the other, Indian policymakers create the most impossible regulatory environment for the agricultural sector, trapping farmers in a low-income, low-productivity occupation. The latest protest in Maharashtra is just another reminder of the hardships the average Indian farmer faces.
The basic malady is known—too many people are unproductively engaged in agriculture, depressing agricultural incomes. The only way to solve the farmers’ problem is to make entry to other sectors attractive by creating employment opportunities, and to make it easy to exit farming. But the entangled myriad state-level regulation has gotten in the way.
Barriers to entry into the labour market are well known. Oppressive labour regulation creates a large, vulnerable and informal market that is less attractive for farmers, and job creation has not kept pace with population growth trends. The bigger problem for farmers, however, is the barriers to exit, which has attracted little discussion in policy circles.
Typically, while trying to leave the agricultural sector, land owners may wish to sell, lease, or use their land for non-agricultural purposes. However, Indian states have very restrictive regulation on sale, tenancy and land use, making it quite difficult to exit agriculture.
First, it is quite difficult to sell agricultural land. Most state laws only allow Indian resident individuals to acquire agricultural land. Not even all resident Indians are allowed to buy land, the sale can only be made to an agriculturist. In the 1950s, policy-makers believed that non-agriculturists would attempt to hoodwink farmers by buying their land at throwaway prices with little intention to farm. They feared this would lead to increase in food prices and leave naïve and illiterate farmers vulnerable. To prevent this, most states permitted only agriculturists to buy agricultural land; the definition of an agriculturalist (often based on income from non-agricultural sources) tends to be restrictive, though different in each state. If one does find an agriculturist willing to buy land, this buyer is limited in the acreage that can be bought (sometimes as low as 10 acres).
This prevents entrepreneurs from investing in agriculture. And by limiting income from other sources, it prevents entrepreneurs from diversifying their investments. The restrictions on size prevent new entrants to large scale-farming. These state laws, intending to protect farmers, have unintentionally made the market for agricultural land smaller, and consequently depressed land prices.
Second, to use agricultural land for non-agricultural purposes, states require owners to obtain a change of land use certificate—a process that involves a number of permissions. In most states, this may take years and a hefty sum in bribes. This makes it difficult for farmers to exit agriculture by using the land for a different purpose. In a country that is quickly urbanizing, with a large number of potential developers trying to buy land, this is one of the worst regulations affecting farmers. The new use allowed after acquiring the certificate increases the value of land. This has resulted in a dual market for agricultural land (and therefore two prices)—one with the change of land use certificate and one without. The certificate in hand can command between 10-40 times the price of land without such a certificate. However, in most states, only the buyer can request this certificate, leaving farmers trapped because they only get the depressed price for their land which can only be used for agriculture purposes.
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