India's landless poor can benefit from public 'land bank', analyst says

NEW DELHI (Thomson Reuters Foundation) - A public land bank that accepts deposits of land, from those who do not wish to cultivate it and lends to those with little or no land, can be an effective way to address rural landlessness in India, according to a leading analyst.

A land bank with incentives based on the tenure of the deposit and the size of the holding can also help increase crop output and rural incomes in the country, said Bina Agarwal, a professor at the University of Manchester.

“Creating a public land bank at the village level is a simple and effective way to regulate rural land demand and supply,” she said on a visit to New Delhi.

“It gets around the fear of loss of ownership from leasing out land, yet delivers similar benefits, and it won’t cost much to set up.”

More than 56 percent of rural households in India own no land, according to official data.

The average size of land holdings is 1.15 hectare (11,500 sq meters), with more than two-thirds of owners holding fewer than 4 hectares of cultivable land.

Even as the size of holdings declined due to indebtedness and inheritance over the decades, demand for land for industrial and development use has increased as the economy expanded.

This has led to conflicts between farmers and states, stalling projects worth billions of dollars.

The northern state of Haryana is considering a land bank to buy land from willing farmers for industrial use to avert conflicts.

Agarwal, who led a working group that recommended a state-backed land bank, said the priority should be lending to small and marginal farmers, and landless minority groups.

A public land bank has many advantages, but implementation would be tricky as it would need a mediating agency, said T. Haque, chairman of the land policy cell in NITI Aayog, a government think tank.

“It is a good idea, but it will need a public or private mediating agency, which would add a layer of bureaucracy, and perhaps make it vulnerable to corruption,” he said.

“So we are in favor of a model land leasing law instead. Anyone can lease out, anyone can lease in, and there’s no middleman.”

The model Land Leasing Act aims at giving poor tenant farmers greater access to benefits such as credit while also protecting the rights of land owners.