Report by Manu Aiyappa / TNN / Jul 3, 2021
For the longest time, the agricultural land market in Karnataka saw little movement, archaic land ceiling laws being a major reason. But over the past six months, transactions have surged, resulting in a revenue mop-up for the government.
The BJP government in the state introduced wide-ranging reforms in September last year, including enabling non-agriculturists to buy farmland.
“There is a 67.3% increase in the number of transactions in agricultural lands, resulting in 127% increase in revenue compared to what it was prior to the amendment of the Land Reforms Act,” according to revenue department’s internal report.
“The transactions in agricultural land have steadily risen in the past six months despite the negative growth during two months of lockdown,” said K P Mohan Raj, inspector general of registration and commissioner of stamps, quoting the report.
Interest in buying agricultural land has grown since the pandemic-induced slump. Individual investors, both first-time and experienced buyers, are stepping into the agriculture land market as they search for a safe, long term real estate investment in a low interest rate environment,” said a revenue official.
“farmland sales prices are up 5-15% in six months, with most of the increase coming since the new laws were introduced,” said Bhaskar C, a land aggregator. “The demand for good farmland is outstripping supply of farms for sale. The string demand to own farmland is one of the main factors pushing prices higher.”
On September 18,2020, the Yediyurappa government amended the Karnataka Land Reforms Act, 1961 removing all-important restrictions on buying farmland. The ordinance repealed section 79(A) that set a limit of non-agricultural income at Rs.25 lakh to buy agricultural land and section 79(B) that barred non-agriculturists from purchasing agricultural lands,
Section 63 was also amended to raise the cap on ownership of farmland. Earlier, the ceiling for a family of four was 54 acers and for a larger family, it was 108 acres. The amendment made it 108 acres for a person or a family of four, and 216 acres for a larger family. This is higher than Kerala (42 acres), Tamil Nadu (60 acres) and Andhra Pradesh (54 acres).
Revenue minister R Ashoka had earlier argued that removal of curbs will allow non-agriculturists to take up farming. However, some farmer groups alleged spike in demand for agricultural land is largely due to a buying spree by corporates and realtors. Farmer leader Kuruburu Shanthakumar said he will protest against such sales.
A revenue official, however, clarified that the government has not repealed Section 80 which prohibits transfer of land to non-agriculturists. This ordinance specifies that class-A irrigated land (irrigated with water from a dam) can be used only for agricultural purposes. This ordinance has inserted a new Section 80 (A) which states none of the relaxations allowed under the act apply to lands given under the Karnataka SC and ST (Prohibition of Transfer of Certain Lands), Act, 1978.
Suresh Hari, chairman of CREDAI, Bengaluru, said the policy change has certainly boosted demand for farmland.
