Case for community-led land acquisition

As a libertarian, I instinctively dislike forced acquisition of the property of citizens by governments. So I support the farmer agitations in Singur and Nandigram against land acquisition by the West Bengal government for the Tata and Salim groups.

I do so with some reluctance, since I would love to see a re-industrialised West Bengal. But there are good and bad ways of achieving this. The wrong way is for state governments to acquire land by fiat. The right way is to empower farmers to become partners in industrialisation.

The Prime Minister has promised a new, humane displacement policy. This implies, rightly, that the old policy was inhumane. In the holy name of socialism, the government acquired land for any purpose it pleased, public or private, and decided what compensation to give. The abolition of the fundamental right to property in 1976 meant that compensation depended on the whim of politicians, not farmers’ rights.

For decades, governments (and corporations) viewed land acquisition as the first step towards industrialisation. Singur and Nandigram now show that this approach is no longer feasible. Today TV cameras cover the iniquity of forced acquisition, and opposition politicians jump into the fray. Hundreds of Special Economic Zones are now planned, many covering thousands of acres. They too will be stymied by violent agitations unless we change our acquisition laws.

Ideally, all land purchases by industry should be voluntary. Let nobody say this is impossible. Reliance has bought hundreds of acres from willing sellers in Haryana. Builders like DLF and Unitech have created land banks of thousands of acres through market purchases. The Sahara group has purchased tens of thousands of acres from willing sellers to create Amby Valley in Maharashtra.

However, a problem can arise when industry requires a block of contiguous land, and a few naysaying farmers exercise an effective veto even when the vast majority of farmers want to sell. The current answer is forced acquisition. Far better will be a new acquisition law that empowers farmers themselves to decide.

After all, if a few naysayers block a deal, they are affecting the property rights of farmers who want to sell. The new land law should provide for state governments or corporations to negotiate acquisition proposals with farmers, and then let the farmers vote on the deal. If a large majority–it could be two-thirds or three-quarters–vote in favour of selling, this should be binding on the minority.

In this scheme, the final decision will lie not with the state government or corporation, but with the community of farmers. It will constitute community-led acquisition. It will respect both the property rights and dignity of farmers, and make them full partners in industrialisation.

Some people have suggested a lesser reform, requiring panchayats to vet government acquisition. This is simply not good enough. The affected farmers alone should be empowered to overrule the naysayers.

Secondly, the new law should empower farmers to transfer land either as a sale or a lease, as they please. Forced acquisition can convert farmers into pathetic refugees. But if farmers voluntarily lease out their land, they become landlords, and corporations become their tenants. This greatly improves the status and dignity of farmers, and makes them true partners. Lease rentals should be subject to period revision.

The third feature of the new law should be to ensure that village residences stay untouched even when surrounding farmland is sold to corporations. A typical industrial estate consists of a core area that has to be walled off for security and tax reasons, and a non-core area with residences, community facilities and parks. The original villages should be incorporated into the non-core zones, which will then have a mixed population of villagers and sahibs, and not be enclaves of sahibs alone.

This proposal is less than revolutionary. Delhi has expanded over the years and swallowed up hundreds of villages. But while the farmland of villagers has been acquired by the Delhi Development Authority, the residential areas have been left intact with villagers. Thus the original villages have become an integral part of a great metropolis, and once-poor villagers now sit on property worth crores in the centre of Delhi. Many have built multi-storyed houses and let out a few storeys on rent. Something similar can happen in new industrial estates.

Corporations complain that the current agitations have created by opportunistic politics. Not so. Rather, the media have exposed vividly the deprivation of property rights inherent in today’s land acquisition rules. This has created a situation that Opposition politicians cannot afford to keep out of.

Both corporations and state governments fear that community-led acquisition will lead to long delays and hurt industrialisation. Not at all. The new law should provide for governments to map rural areas to identify good areas for future industrialisation. Once this happens, farmers in prospective areas realise the new possibilities, and some will take the initiative in offering their farmlands for sale. Agriculture today fetches very little income. Give villagers an incentive to participate profitably in industrialisation, and they will grasp it with both hands. Empower them, and entire villages will offer themselves for sale.

What do you think?