Balancing industrialisation, growth and farmers' well-being

In the last Situation Assessment Survey of farmers done by the National Sample Survey Organisation, 40% of respondents said that they continue to do farming only because they have no alternative. The vast majority of our farmers are marginal farmers eking out a precarious existence, with most of them also working as hired labour part of the time. Clearly, this is no glorious condition to be preserved in perpetuity. Yet, most people resent, in fact, fear, change. The reason is the firm conviction that any loss of land would only serve to leave the land-losers worse off, that any prospect of their lives being transformed for the better belongs firmly in the same category as poll-time promises and fairy tales.

Most attempts to take over farm land for conversion to urban, commercial use have tended to reinforce this fear. The new land acquisition law being prepared for the Cabinet’s consideration seeks to address this fear, by mandating resettlement and rehabilitation of landlosers. That is welcome. The precise details of the compensation package have to be worked out by the states. The central law only seeks to lay down a minimum level of compensation.

However, that minimum might also be economically inefficient. It would be inefficient to increase a project’s capital cost by jacking up upfront payment requirements. The ideal situation would be to make the land-loser a stakeholder in what comes up on his land: he could earn lease rental, have the right to get a portion of the land back in a developed form, receive annuities or get an assured job or a combination of all these, apart from some upfront compensation. It is neither necessary nor possible to guarantee that a land-loser would be rehabilitated as a farmer. The point is to ensure certainty of future livelihood and dignity. Once these are guaranteed, it would be indefensible to resist growth of towns and industrialisation in the name of protecting farmers’ livelihoods.