September 20, 2020

Karnataka Land Reforms Ordinance: Inviting Corporate Capital & Alienating Small Farmers

Aparajita Bakshi and Soham Bhattacharya

THE central government has used the pandemic to pass ordinances that significantly changed agricultural legislations to open up agricultural markets and serve interests of large companies and corporate capital. The Karnataka government has followed in the footsteps of the central government to promulgate the Karnataka Land Reforms (Amendment) Ordinance, 2020 (henceforth the Karnataka land ordinance) on July 13. This ordinance seeks to further corporate and private interests in agricultural land. The ordinance has the potential to alienate small and marginal farmers in unirrigated areas from their land and livelihoods.

There are three major changes that the current amendment introduces. Firstly, changes in section 63 doubles the existing land ceilings. Secondly, restrictions on entities that can own agricultural land are removed. The existing law prohibited persons with regular sources of non-agricultural incomes above a certain limit, and entities other than cultivators such as trusts, companies, associations, cooperative societies other than cooperative farms to own, lease or mortgage agricultural land. These restrictions are removed with the omission of sections 79A and 79B. Thirdly, amendments in Section 80 that previously barred agricultural land from being transferred in any form to non-agriculturists are eased. The present law only imposes restrictions on land transfers of irrigated double-cropped land to ‘who does not use it for agricultural purpose’.

Karnataka is one of the few states in India, to have adopted and implemented some progressive land reforms measures under the aegis of a non-Left government in the 1970s. The Devaraj Urs government in 1974 made changes in the Karnataka Land Reforms Act, 1961 to reduce ceiling limits, abolish tenancy, assign land titles to tenant cultivators, and restrict the transfer of agricultural land to non-agricultural classes. Since the advent of neoliberal policies in the early 1990s, however, several of these legislations were reversed. Sections 79A, 79B and 80 were repeatedly amended to allow non-agricultural interest groups to purchase and convert agricultural land since 1991. Agri-businesses gained much policy focus in Karnataka since the 1990s and the land reforms laws were amended to allow agri-businesses to gain land in the state. The current amendments in the Karnataka Land Reforms Act are thus a continuation of the changes in the Act taking place since early 1990s, and reflect the policy direction of the state to encourage private and corporate investments in agriculture.

Karnataka’s agriculture is marked by the preponderance of small and marginal holdings, which represents 80 per cent of the total operational holdings. However, official data suggest that during the last two decades relatively large farmers, who already own more than five acres of land, are leasing in more land in the state. The amended ceilings in the ordinance provide an opportunity for relatively large farmers to increase their land holdings through purchase. Entry of large retail chains and MNCs provides fresh incentives for rich farmers to scale-up horticultural production and secure contracts from these companies, as they receive higher benefits from contract farming than small and marginal farmers. 

The amendments also pave the way for private companies and corporate entities to directly gain entry into agricultural land markets and introduce corporate farming. Contract farming is practiced in Karnataka since the early 1990s. Now, changes in sections 79A and B and section 80 would allow companies to buy or lease agricultural land and create sufficiently large corporate farms to fulfil supply needs for retail chains and agro-processing industries. This has the potential of driving out small and marginal farmers from the production of high value crops, and alienate them from their lands.

Only 28.9 per cent of net sown area in Karnataka is irrigated, much below the national average of 43.2 per cent. The expansion of high value horticultural and commercial crops are limited to few districts in the irrigated parts of Karnataka, while the major agricultural land is under cereals and pulses cultivated by small and marginal farmers. The amendments, particularly the provisions in section 80 pave way for agricultural land conversion, which may lead to alienation of land among dryland farmers.

When the Karnataka land amendments are seen in conjunction with amendments in the state’s APMC (amendment) ordinance also passed during the pandemic on May 15, it becomes clear that the government is trying to create a larger space for the private companies and corporates in the state’s agriculture. The two amendments together give substantial boost to the corporate interests in agriculture in Karnataka.

By narrowly focussing on a policy of corporatisation of agriculture, and easing restrictions on conversion of unirrigated agricultural land to other uses, the government of Karnataka is abdicating its responsibility towards small and marginal farmers who depend on unirrigated agriculture for their livelihoods and who constitute the majority of farmers in Karnataka. Given the past record, such myopic perspective will neither modernise farming in large parts of the state, nor benefit the majority of farmers.