We think that with the powers of the Land Acquisition Act gone,the re-establishment of land rights should see the market taking over. If we were clever,we would also wrap the kisan as a stakeholder in partnerships,thus isolating the lone rangers who are unwilling to sell at any cost and making it easy to handle them. The flip side would be business as usual,what with the might of the state and the brutality of contractors running and funding the roost. It was heart-warming to hear the Prime Minister advocating from Lal Qila that farmers should be stakeholders in the change in India when their land is used for development. But not everybody tunes in on Independence Day. And in nearby districts,it was the flip side that was working itself out in the most despicable manner. It is also worth mentioning that contractors are not happy with the Sardar Sarovar rehabilitation plan or with the one concerning Tehri.
On a news channel,there was recently an argument about land prices,which concluded that since they have not risen on account of the farmers own efforts,they should thereby be limited. This is the argument for acquiring land at jantri rates. Of course,that no one ever buys or sells land at jantri rates (normally a quarter of the market price) is another matter since the rest changes hands without paying stamp duties or other taxes. It is true that land prices are rising on account of economy level factors. We are mismanaging soil and water,and the demands for food and commodities are rising. If land under crops,in addition to cropping intensity,does not rise because irrigated area is constant and agricultural demand goes up by 4-5% annually,you dont have to be David Ricardo to say that land rents and prices will rise. While the farmer didnt earn higher land prices,this is not his fault either and it is unfair to paint him the villain of the piece.
When everybody is making money from rising prices,with demand (incomes) rising at twice the rate of supply,there is little logic in denying the farmer his share when he owns and claims it for the first time in history. The Prime Ministers advocacy is good. Instead of making the farmer a sullen outsider,make him a stakeholder. That way he will enhance change,instead of bottlenecking it. We have argued for producer companies for farmers in which a share in equity should be considered instead of cash compensation,for then farmers would have a direct incentive to expedite,not obstruct. They could be encouraged to set up businesses around the developments and be trained/financed for this. The use of locals enhances loyalties towards businesses.
All this will add up to costs. Yes,it will. But this is a real cost emerging from real scarcities and has to be paid. We are so used to a subsidy culture that even hard-nosed businessmen expect the state to give them freebies and then lecture others on the virtues of the free market. If you cannot afford the land,your project is unviable. However,nobody dares to broadcast this. At best,the message is not given because the other CM does not give it and there is a genuine beggar-thy-neighbour policy. The more uncharitable interpretation is that the sethji pays the piper. The faster urbanisation spreads,the worse the problem will be.
There are other ways of solving the problem. But they involve planning,which is no longer fashionable. If you ask policymakers to do land use planning,they look at you blankly. They are from the land ceiling days and so used to monkeying around with plots of land that the idea of a larger solution is not visible. For example,you could build urban spaces on barren land and make the development central by planning transport. Transport is of paramount importance as villages become large villages and large villages becomes towns that need markets,infrastructure and land.
It is not wise to alienate the farmer. Civilisations like India,Egypt and China have existed because of their peasantry. Invaders came and went. Sometimes they looted villages. The ones who stayed back learnt to deal with the farmer without shaking his world. The great transition has begun in India. The spread of markets is dense,as satellite pictures show. The Prime Minister says,and we have argued,that the rural-urban continuum has to be managed in harmony and not in conflict. The stakes are too high for us to fail.
The author is a former Union minister