Why DBT schemes need to fix the problem of farmers?

In News

• Recently, some of the economists have suggested the conversion of all agricultural subsidies (Inputs or Output) into direct income support to farmers. 
  • The IMF too recently lauded India’s Direct Benefit Transfer (DBT) Scheme as a “logistical marvel” that has reached hundreds of millions of people and specifically benefited women, the elderly and farmers. 

Who are Tenant farmers? / Data on tenant Farmers 

• Who is a tenant farmer?
  • He is a farmer or farm worker who resides on land owned by a landlord.
  • It is an agricultural production system in which landowners contribute their land and often a measure of operating capital and management, while tenant farmers contribute their labour along with at times varying amounts of capital and management. 
  • Depending on the contract, tenants can make payments to the owner either of a fixed portion of the product, in cash or in a combination. 
  • Farm tenancy agreements are largely oral, unwritten contracts and seldom recorded leases.
• Trend: There is a steady increase in tenant farmers. 
• NSO survey: According to the National Statistical Office’s (NSO) ‘Situation Assessment of Agricultural Households’ survey for 2018-19, 17.3 percent out of the total estimated 101.98 million operational holdings in rural India were on leased lands. 
  • The share of such leased-in lands in the total area used for agricultural production was 13 per cent.
  • The NSO’s previous surveys for 2012-13 and 2002-03 revealed the shares of leased-in holdings at only 13.7 per cent (11.3 percent of area) and 9.9 per cent (6.5 per cent), respectively.  
• State-wise tenancy data
  • Highest tenant farmers are in Andhra Pradesh (42.4 per cent) and Odisha (39 per cent).
  • Haryana and Punjab: the share of leased-in area is higher than the percentage of tenant holdings.
    • It means that the tenant farmers in these 2 states operate relatively large holdings, even though they don’t own these lands. 

Limitations of DBT Schemes and Tenancy 

• Limited reach: Schemes such as PM-Kisan, Rythu Bandhu and YSR Rythu Bharosa do not reach tenant farmers (those who undertake cultivation on leased land).
• Left-out beneficiaries: The exclusion of tenant farmers from income support and also zero/low-interest loans, crop insurance, disaster compensation and other agri-related schemes is significant because of the rising trend of owners no longer directly cultivating their lands.
• Crop cultivator rights cards: The CCRC requires the landowner’s signature and cannot be issued without his consent. Most owners are hesitant to sign any document confirming they have given their lands on lease. 
  • They fear that any written agreement makes them vulnerable to lawsuits by tenants claiming rights over the land. 

Significance of DBT and Tenancy 

• Transparency: Direct benefit transfers (DBT) on a per-acre or per-farmer basis is seen as transparent and simple to administer.
• DBT is crop-neutral: only rice, wheat and sugarcane farmers effectively get minimum support prices now and does not cause distortions in input/output markets.
• Eliminate delays in transfers: DBT will avoid time delays in transferring of benefits to the beneficiaries.
• No middlemen: Middlemen will be eliminated to reduce the leakage of funds.
• Biometric identification: Fake and duplicate beneficiaries will be eliminated through biometric identification (Aadhaar). Since intermediaries are removed, this will help the government reduce the structural cost in the end.

Way forward

• Agriculture in India is increasingly seeing both tenancy: 
  • Landless/marginal farmers leasing land to cultivate.
  • Reverse tenancy where small landowners leasing out to better-off farmers keen to reap economies of scale.
• Leasing can help both tenant and reverse-tenant farmers operate consolidated holdings, while allowing owners to take up non-agricultural employment without risking loss of their lands. 
• DBT by leveraging the JAM (Jan Dhan, Aadhaar and Mobiles) trinity and the technological prowess offers to drastically improve the benefit delivery system in the country. 
• States have to come forward to adopt the Model (Agricultural) Land Leasing Act proposed by NITI Aayog in 2016. 
  • This Act would allow for the profitable use of fallow land and provide tenant farmers with access to credit and insurance services. 
• The government should try to subsume all existing input and output subsidies under a single DBT Scheme and should find an answer to the tenant problem. 

Source: IE