Yes he can transfer the land to you as you both are agriculturists. Collector's permission is required in case tye land belongs to the sc/st person or the buyer is a non agriculturalist. If that is the case then proceed accordingly.

You need to seek collectors permission for the same to execute gift deed

Neighbour has to approach collector for permission 

he cannot gift the land d to you or create any third party rights on the land 

Query has been replied to 

Approach collector for permission to transfer land 

Then you have to ontain the collector's permission.

Since the local laws prevent sale of this small pocket of land or transfer of the same by any mode except with the permission of the District collector, it would be pertinent that he obtains permission from collector to transfer this pocket of land by gift deed to you as a farmer by your  farmer neighbor to .

Your query has been promptly replied by many advocates of this forum, now you have to think about further course of action to be taken on this whether individually or through an assistance of any advocate or any agent

If the other party has tenancy rights and this property  cannot be transferred  as per the 7/12 extracts, then he may have to apply for permission from collector to get it transferred by a gift deed. 

Dear Client,

                 The 7/12 extract, traditionally called as “Saath Baara Utara”, is an extract from the land register of any district, maintained by the revenue department of the government in the state of Maharashtra.Private forest land is transferable if the word private is mentioned.Lands covered under sea bed, creeks below high water mark, rivers, lakes, tanks etc. are government lands, if private ownership is not reflected and hence not transferable without permission.Any person or family cannot hold land in excess of ceiling area fixed on 26th Person or family cannot transfer surplus land until the land in excess of the ceiling area is determined under the act.(Section- 8) A person possessing land in excess of ceiling area cannot acquire land by transfer. (Section-9)The land held by individual or the family of the Maharashtra State or the part of India is to be taken into consideration while calculating the ceiling area.Area of land unfit for cultivation is mentioned in this column in two categories-

• 
  VARG (A) – Category (a) – under this category consists of that land area which is uncultivable due to rocky area, land under Nala and farm building.
• 
  VARG (B) – Category (b) – under this category consists of that land area which is uncultivable due to land reserved for public purposes i.e. Road, Recognized Foot path and public place for drinking water etc.

Lands under section 32-G category are private lands, which are allotted to kool (Tenant) for cultivation, against payment of yearly rent payable by the said kool to the landlord. Under the provisions of Bombay tenancy (protected) act (kool-kayda) the lands under cultivation by such tenant as on 1-4-1957 (Tillers day), such kool being statutory purchaser automatically becomes the holder of such land, had it been the said tenant has paid appropriate value (Nazarana) to the government and have obtained a Sanad / certificate under section 32 M of the act and thereafter such land can be sold and not otherwise.

Thanks & Regards