Falling demand: Punjab lease rent party ends as crop prices plunge

Reversing trend being witnessed due to collapse in basmati and cotton realisations, minimal hikes in paddy and wheat MSP, damage to rabi crop from untimely rains and hailstorms, among others.

Written by Raakhi Jagga , Anju Agnihotri Chaba | Jalandhar/ludhiana | Updated: July 9, 2015 5:16 am
Punjab agriculture, farmland on rent, Punjab lease charges, rising crop price, crop price, rabi crop, rabi crop production, untimely rains, Indian monsoon, damaged crops, hailstorms, monsoon, Rural Development and Panchayats Department, RDPD Punjab, indian express Dalit lessee farmers seeking reduced reserve prices in shamlat or village common land auctions. ( Source: Express Photo)

The downturn in agriculture is manifesting itself now in falling demand as well as lease rentals for farmland. This is happening in Punjab, India’s granary state that had seen significant increases in lease charges over the last decade on the back of rising crop prices.

But that trend is reversing — thanks to the collapse in basmati and cotton realisations, minimal hikes in minimum support prices of paddy and wheat, damage to the recently harvested rabi crop from untimely rains and hailstorms, and forecasts of a below-average monsoon.

Last year, the Rural Development and Panchayats Department (RDPD) in Punjab had mopped up Rs 301 crore through leasing out 1,34,450 acres of ‘shamlat’ or village common lands. This year, it had planned to auction 1,40,260 acres, but has managed to lease out just 68,937 acres even after three attempts.

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“We were earlier raising the lease rate by 10 per cent every year. This time, not only have we been unable to auction even half the available shamlat land — a third of which is reserved for Dalits — but even the lease rates are lower at Rs 17,000-18,000 per acre, against an average of Rs 20,500 in 2014,” notes Shiv Dutt, deputy-director, RDPD.

But it’s not panchayat lands alone; even commercial lease rentals have shown decline. In the main Malwa belt south of the Satluj river, good fertile land was leased out last year at Rs 45,000 to Rs 53,000 per acre. This time, the rates quoted range between Rs 39,000 and Rs 44,000/acre.

The state’s other two regions have also reported drops — from Rs 35,000-40,000 levels to Rs 28,000-32,000 in Majha and Rs 25,000-30,000 in Doaba.

Bikramjit Singh has for the past 15 years been taking land on lease for cultivation. “Every year, I was paying 10-15 per cent more. This time, I paid Rs 3,000-4,000 per acre less. My landlords were happy because they did not expect that I would lease in land after having suffered a Rs 4 lakh loss last year,” says this farmer from Kahlanwali village in Dera Baba Nanak tehsil of Gurdaspur district.

Niranjan Singh, who farms 20 to 30 acres of leased land near Sultanpur Lodhi in Kapurthala district, informs that his landowner has slashed his rates by 15-20 per cent, “but I am still not ready to take it due to last year’s heavy losses”.

Nirmal Singh has been somewhat luckier in cultivating 20 acres of land at Chachrali village near Phagwara for the past 18 years. He started with Rs 8,000 and is now paying Rs 24,500/acre. “My landlord, an NRI, has been kind not to increase the rental in recent years. But even with that, I am unable to save even Rs 5,000 per acre, given rising inputs costs and sliding crop prices,” he complains.

Ramanjit Singh Sikki, a Congress MLA representing Khadoor Sahib constituency, has been engaged in potato farming on 10,000 acres of leased land in the Doaba region covering Jalandhar, Hoshiarpur and Kapurthala districts.

“This year, I have cut it down to 2,500 acre, as high production costs make it difficult to pay farm rentals. Even those who were giving land at Rs 35,000-40,000 per acre last year are offering it today at Rs 20,000-25,000. The only reason farmers are still taking land on lease is to renew their bank limits and to save themselves from becoming bankrupt socially,” he claims.

Sukhpal Singh Khaira, a Congress spokesman and former MLA who has been leasing out 60 acres since long, admits that lessees are hardly making any money today: “Fuel, farm machinery, labour and harvesting costs have all gone up, even while crop realisations are plunging. In future, we may be forced to cultivate our own land, as lessees aren’t ready to take it”.

Sukhjinder Singh Randhawa, District Congress Committee president of Gurdaspur and sitting MLA from Dera Baba Nanak, concurs with this view. He gave his 47 acres land at Rs 28,000/acre, after being forced by his lessee to reduce the rate by Rs 3,000-4,000.

Meanwhile, Dalit lessee farmers have holding regular protests across the state to get reserve prices in shamlat land auctions reduced. In Ghabdan village of Sangrur, the reserve price for highly fertile land meant for Dalits was fixed at Rs 50,000 per acre, yet the actual lease was done at Rs 15,000. In Kularan village of Patiala’s Nabha tehsil, the annual lease was similarly brought down to Rs 20,000 per acre, against the Rs 50,000 of the previous year.

“Our target is to get lease rents reduced to Rs 20,000 per acre. We cannot afford to pay the high reserve prices. Also, our crop hasn’t been good this year and most of us are still awaiting payment of compensation for the damage from unseasonal rains”, says Tarsem Peter, president of the Zameen Prapti Sangarsh Samiti, which has been spearheading the campaign for slashing of annual rates on shamlat lands.

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