Tuesday, April 22, 2014

Agri Econ 11: Protecting Land Properties by the Poor in India

Another good article from my friend Barun Mitra (2nd from right in photo) of Liberty Institute in India, co-authored with his wife Madhumita Mitra, posted before the on-going India general elections started early this month.

I particularly like their point on 
"Abolish land ceiling laws, particularly in agriculture to facilitate consolidation such fragmented land into viable farm units."

That is similar to the campaign to end the no-time table agrarian reform (AR) program and forced redistribution of agri land here in the Philippines. AR was started in 1972 by the Marcos government, then a new law on AR in 1988 during Pres. Cory Aquino’s time with 10-years time table. The 1998 deadline came, and AR was extended to 2008. And further extended to June 2014. Now there are moves to further extend it for many years more.

India’s land management regime has for decades been mired in obsolete laws and misguided policies that distort markets, enable corruption, and deny fundamental property rights. Current land policies are a mix of outdated laws and even more obsolete ways of thinking, many of which are rooted in colonial India.

The paradox is best illustrated by the fact that many landowners, including farmers, would like to move out of agriculture, but cannot find remunerative price for their land assets, while industrialists and investors who would like to buy land cannot find access to land at a reasonable price. Tens of billions of dollars of investment, in public and private projects have been stalled due to land related conflicts. This land alienation is also contributing to a section of society sympathising with leftwing insurgency in some parts of India.

Land is the only asset that most Indians, even the poorest, possess to at least some degree, but technicalities often prevent them from claiming legal ownership over what they possess. A functioning land market founded on strong property rights would expand the opportunities for economic advancement for those who possess land, empowering them as citizens in a democratic India. Such a market would also allow those with wealth to access and invest in property and engage with land owners in mutually-beneficial transactions, rather than trying to use their waning political influence to access land.

The 16th General Elections to the Indian Parliament, the House of the People, (Lok Sabha), is being held thro’ April-May 2014. A new government will take office by the end of May. Reforming land management will be a key factor shaping the political and economic trajectory of the country. In that context, we suggest the following agenda items, which may be considered by the incoming government, and the country at large, in the coming months and years.

§  Clearly articulate the need to create a functioning land market which will significantly reduce the need to invoke eminent domain.
§  Partner with private, community and public-sector stakeholders to build a modern land recordkeeping infrastructure based on GIS and other imaging technologies.
§  Abolish land ceiling laws, particularly in agriculture to facilitate consolidation such fragmented land into viable farm units.
§  Eliminate capital gains tax. In a poor country, taxing capital is self-defeating.
§  Drastically reduce or eliminate fees and taxes that impede land transactions and increase the potential for corruption, replacing them with a nominal fee to cover only the administrative costs of keeping up-to-date land records.
§  Transfer authority over land-related regulation such as zoning, land use and environmental concerns, to local governments and councils.
§  The scope of eminent domain needs to be severely restricted to truly public purposes, and with the consent of those affected, not to facilitate private investment and business projects.
§  Recognise the land owners rights over forest and other environmental resources, including minerals, whether above or below the ground.
§  A new mines and mineral law, which recognises the rights of land owners and communities, and allow them to directly negotiate access and royalty with investors, is much awaited.
§  A land titling law to grant conclusive title guarantee to land owners is imperative. Property transfers must legally validate transfer of titles rather than merely enabling registration of the deed.
§  Restoration of Right to Property as a fundamental right in the Constitution.

See also:
Agri Econ 8: On Rice Price Stabilization, January 16, 2013 
Agri Econ 9: On Agrarian Reform and Agri Credit, April 29, 2013 

Agri Econ 10: On Rice Price Spikes, September 29, 2013

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