Special Correspondent

THIRUVANANTHAPURAM: The banks in the State have suggested State-level legislation to facilitate financing of farmers cultivating crops on land taken on lease.

The State-level Bankers' Committee (SLBC), at its review meeting here this week, noted that lease-land farming could be effectively used in the State to overcome problems associated with fragmentation of farmlands and absentee landlordism.

The land reforms of the 1970's had brought about a social revolution in the State by putting large tracts of land in the hands of the real tillers of the land. However, it had also led to large-scale fragmentation of the fields, making farm operations unviable, especially in the case of paddy crop. Many people who had become owners of paddy fields through the land reforms were keeping the fields fallow. Many others had started giving the plots on lease to farmers with resources to raise crops.

These more resourceful farmers too were in need of bank finance for their farm operations. Others too would surely come forward to take on lease contiguous fields owned by small farmers, if they were assured of bank finance.The meeting noted that though the banks in general favoured the idea of financing lease-land farmers, they were hesitant to give loans on a large scale owing to legal impediments.

The Government could enact suitable legislation facilitating "a free and fair lease market" to encourage farmers having non-viable fragmented plots to lease out their holdings to other farmers, without the risk of losing their ownership rights, according to the banks. The SLBC suggested that the proposed legislation incorporate provisions for mortgage of lease in favour of banks and the right for banks to transfer them to others in case of credit default.

This was a politically delicate proposition for the Left Democratic Front Government, since it could be interpreted as going back on land reforms, the spirit of which was that the land should become the property of the real toiling masses to ensure optimum productivity.

The official representing the Government at the meeting noted that enacting legislation for promoting contract or lease farming was a policy matter of the Government. However, the proposal was being placed before the Government.

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