labels: Economy - general, Shivshankar Verma
Land acquisitions and farmers' rights news
08 October 2008

Most major industrial projects in the country are now mired in controversies and violent agitations over land acquisition. There are ways to avoid these problems and make the whole process more equitable for land owners. By Shivshanker Verma

Last weekend, I met my best friends from school. We were seeing each other for the first time since we somehow managed to complete school, something we often doubted we ever would. That was three decades ago and we all went our different ways, to learn a trade, earn a living and raise families. Once we recovered from the initial surprise of discovering what each of us had become, we were the same bunch of boys again. Albeit with grey hair and bellies.

After rounds of rum and cola, all for old time's sake, we ended up in a heated debate on land acquisitions for industry and farmers' rights. As the majority were from the corporate world, they all predictably ganged up against the lone farmer in the group. I remained neutral for a good part of the debate, as most in the media do, to see which way the arguments went before taking a clear position.

Now, my farmer friend is no ordinary farmer. He is very much a new-age agriculturist, comfortable with technology and well acquainted with global commodity market trends. He owns and directly manages tea plantations in the Nilgiris, where the conditions and commercial viability are far different from most of rural India.

But, as we eventually discovered, his views about farming were not that of a wealthy plantation owner but closer to the marginal farmer who tills his own land, sows and harvests the crop. His sensibilities were shaped by the two decades he spent under the hot sun in the southern tip of Tamil Nadu, trying to grow mangoes, pomegranate and cashew. His toils proved unsuccessful, as a combination of adverse conditions, water scarcity and poor farm research support made him frustrated enough to quit.

My friend had two basic arguments. First, the rest of us didn't have a clue what it takes to develop land, make it arable and nurture it to become a sustainable source of income. Second, all those who favour land acquisition for industry have no idea what it means to a farmer to be forcibly separated from his land. And then forced to develop a farm at a distant place where the entire environment is completyely alien or find another vocation.

The first of his arguments is almost entirely true. We all assume that farming is a highly uncomplicated affair and hence farmers can be easily relocated. Just an alternate plot of land would do, the rest is all so easy. In our view, all a farmer needs to do is plough the land, add fertiliser, sow seeds and enjoy life until it is harvest time. If it is a plantation with commercial crops like tea, coffee or rubber, it is even easier. Once the plants are ready to yield, all that is required of the planter o do for many years is to sit back and manage a few workers. The money will flow like an assured annuity.

In real life, farmers don't get to enjoy such a blissful existence. Identifying land suitable for a particular crop is no less difficult than finding a suitable location for a factory, and the farmer will know whether he made the right choice only after a few harvests. Just like a business, a farmer needs to create support infrastructure and organise logistics. Just because a farmer has to do it on a smaller scale does not mean it is any easier. In fact, it is all the more difficult for a farmer because the support systems and infrastructure in terms of research and technology inputs, storage facilities, physical access to market and access to price information are woefully inadequate. Unfavourable climate changes and pest attacks add to the risks.

These difficulties explain why long-established farmlands are prized by farmers. Such areas are proven in terms of the crops that can be planted and the yield that can be expected. Basic support infrastructure will be in place and accessibility to markets will be relatively easier. More importantly, farmers in such areas become a community where 'best practices' evolve over generations and benefit everyone. Such practices can be different across different areas, even if the crops are the same.

For instance, paddy farming in Bengal is not the same as paddy farming in Andhra. In that sense, these farming communities are no different from the 'industrial clusters' that develop specialised skills and excel in certain products.

When that is the case, why should we be surprised when farmers refuse to give up their land? Will the government ask the hosiery makers of Tirupur or the metal workers of Faridabad to leave their towns for someone else to build oil refineries or steel plants there? Can we justify acquisition of farmland just because fewer people are affected or displaced?

The second argument is about respect for private property rights. The doctrine of eminent domain which gives the state the power to acquire private property for delivering a public good deserves to be upheld. But, the question here is how far can we stretch the definition of public good? Beyond a certain limit, it becomes a blatant abuse of the overarching powers of the state to violate individual rights to help large and powerful corporations.

It can be validly argued that industrialisation falls under the definition of public good, because of employment that it is supposed to generate. This is true even when private industry is promoted, because jobs are highly valuable to society as a whole. But, when the quest for this public good comes at a disproportionate cost to individuals, can that be justified? Especially when those individuals are the least able among us to rebuild their lives elsewhere or re-equip themselves for other vocations? Where do we draw the line?

On the other hand, there is a pressing need to create a large number of industrial jobs because that is just about the only way to lift those who find jobs out of poverty. Unfortunately, every farmer agitation is now getting highly politicised, Singur being one of the most visible cases, and eventually political interests gain precedence over the fundamental issue of farmers' rights in many of these agitations. As the stakes go up and politicians try to score points, peaceful agitations turn violent and lives are lost. The entire state will be branded as industry unfriendly, like Bengal now, and investments slow down. The country can hardly afford this either.

Is there a way out? Of course there is, if certain ground rules acceptable to all are strictly followed.

To begin with, fertile land should never be allowed to be converted for industrial use. We don't necessarily have to destroy one productive asset to create another, when there are alternatives. Only land unfit for productive farming should be used for industry. The government should undertake a nation-wide survey to identify such large land parcels and designate them for industrial use. Most likely, such areas will be sparsely populated and those likely to be affected should be rehabilitated beforehand.

If such land tracts are inaccessible or lack other infrastructure, the government should take the initiative to build them. After developing the basic infrastructure, the land should be auctioned to private SEZ developers.

If at all fertile land must be developed because of the advantages of its location, industry should negotiate directly with the farmers. The government should only play the role of a facilitator, if need be. Yes, acquisition costs for industry will be higher and there could be delays because of hold-ups by a few land owners. But, if the location advantage is compelling enough, industry should be willing to bear the higher cost.

If there is no other way but to acquire a specific tract of land, like for mining, the land owners should be made partners in the project. Instead of outright acquisition, the land can be leased for a specified period and handed back at the end of the period when the mineral resources are exhausted. The lease fee can be directly paid to the land owners who will be assured of a steady income, until they get to repossess the land.

In case the productive period of the land for mining or other purposes is indeterminate, or when the developer has to make large investments and hence would prefer freehold rights, the land owners may be given stakes in the venture. This should be in addition to a fixed cash compensation sufficient enough to rebuild their lives. Moreover, the developer should rehabilitate the land owners at his cost.

All these terms should be negotiated and settled directly between the developer and the land owners, so that they themselves take ownership for executing them. Instead of giving equity stakes to individual land owners, their collective shareholding can be held by a trust to manage the holdings and distribute the income among members.

Industry may find some of these suggestions restrictive and raising its project costs. However, they are preferable to the violent opposition, inordinate delays and either inadequate or costly relocations that now plague many large projects across the country. They are also more equitable and give due respect the rights of individual land owners. It is time industry bodies like CII, Ficci and Assocham took the initiative to establish some ground rules that are also equitable to farmers, instead of trying to evade the vicious maelstroms that surround every major industrial project these days.


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Land acquisitions and farmers' rights