Explained: The Plight of Tenant Farmers and How DBT Schemes Can Help

The majority of economists support converting all agricultural subsidies, whether they are related to providing fertilizer, electricity, and water below the cost or on purchasing commodities at prices above market, into direct income support for farmers.

Such assistance is viewed as transparent and easy to manage and is provided in the form of direct benefit transfers (DBT) on a per-acre or per-farmer basis. Additionally, it does not produce input and output market distortions and is crop-neutral (as of currently, only farmers of rice, wheat, and sugarcane effectively receive minimum support prices).

The current agri-DBT programmes, such as the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan) of the Centre, the Rythu Bandhu of the Telangana government, and the YSR Rythu Bharosa of the Andhra Pradesh government, have one drawback: they do not apply to tenant farmers, or those who cultivate on leased land.

All Indian farmer families who own land are given an annual income support of Rs 6,000 by PM-Kisan. Rythu Bandhu offers all farmers who own land, regardless of size, cash aid of Rs 10,000 per acre. Farmer households are given Rs 13,500 year through YSR Rythu Bharosa, which also includes a Rs 7,500 top-up from the AP government and Rs 6,000 through PM-Kisan.

Given the expanding tendency of landowners no longer personally cultivating their properties, the exclusion of tenant farmers from income support as well as zero or low-interest loans, crop insurance, catastrophe compensation, and other agri-related programmes is noteworthy.

According to the Situation Assessment of Agricultural Households survey conducted by the National Statistical Office (NSO) for the 2018–19 academic year, 17.3 per cent of the projected 101.98 million operational holdings (i.e. farms) in rural India were situated on leased lands. Such leased-in lands made for 13 per cent of the total area used for agricultural production. According to earlier NSO surveys from 2012–13 and 2002–03, the percentage of leased-in holdings was just 13.7% per cent.

Both "tenancy" (landless/marginal farmers leasing in land to cultivate) and "reverse tenancy" (small landowners leasing out to better-off farmers keen to reap economies of scale) are becoming more common in Indian agriculture. This is expected because not everyone, even those who own property, may be skilled at or interested in farming.

It is indeed crucial for the Centre and the state governments to understand the significance of the matter in a larger context, and include the tenant farmers in the DBT schemes in order to boost farming in country in a fair and fear-free manner.

Farming might eventually turn into a specialised industry. Both tenant and reverse-tenant farmers can operate integrated holdings with the aid of leasing, which also enables owners to work outside of agriculture without worrying about losing their property.