ABSTRACT
The agricultural land rental or lease market has important implications for better and equitable utilization of land, agricultural growth, occupational mobility, and overall rural development. This chapter analyzes changes in the extent and pattern of leasing arrangements over time in India, determinants of leasing decisions of rural households and their implications for rural development. It has emerged from the analysis that two major changes have unfolded in the land lease market over the last few decades. First, the incidence of tenancy has increased. Second, fixed rent has emerged as the dominant form of tenancy contract. In fact, it is expected that with further increases in levels of education, there may be more supply of land in the land lease market. Hence, the challenge before the policy maker is to ensure efficient utilization of the land that will be supplied in the lease market. The existing legal framework, however, is not conducive for efficient utilization of such land. Consequently, reforms in the prevailing tenancy laws are called for so as to make leasing in and out of agricultural land hassle free. Given the finding of this study, that relatively less advantaged groups of people are more likely to participate in the lease market, making leasing arrangements tenant-friendly will improve social welfare.
