Friday, December 15, 2006

The Tata Singur Impasse

The Singur controversy has attracted a strange set of bedfellows-the Tatas and the Left Government on one side representing the so-called “capitalists” and Mamta, BJP, Medha Patkar on the other representing “people’s interests”. Politically, the Rajas and Yechurys are conveniently silent and the entire issue has become Buddha’s lone fight. It's best to ignore Mamta madam’s theatrical outbursts and so I am keeping aside the politics involved here, though the clincher in the deal may be politics.

Singur is a village about 50 km northwest of Kolkata and is predominantly an agricultural area. The Tatas want to set up their small car unit here and have estimated about 997 acres of land for this. 950 acres has already been agreed and the remaining 47 acres is still being negotiated, but we know what the result would be. The compensation agreement entails owners of single-crop land to receive Rs 8.4 lakh per acre and Rs 12 lakh an acre if the land was used for double-cropping.

The issues involved, broadly, as I understand are:

1.Agricultural land for industrialization:

Most of the land acquired for the purpose of setting up the land is agricultural and fertile land. A pro-Left article claims that this is because of paucity of non-agricultural land at West Bengal. But Bengal accounts for only 3.8% of the total agricultural land in India, so that argument does not cut ice. Even if it is so, why are the Tatas insisting on acquiring this land? For a company known for its CSR, this seems like an aberration unless they take pains to explain their decision. Is the locational advantage so tremendous that the company has to set up base there or is it because of the sops being offered by the West Bengal Government?

2.Total Land Area Required:

If a Maruti Udyog with an installed capacity of 3.5 lakh cars a year requires a total land area of 300 acres, do the Tatas require three times that much land for producing only one lakh cars? Maybe they do but then shouldn’t they be transparent about it and tell the farmers and the public what they wish to do with this land? Surely, their PRO can do a better job about this rather than maintaining a dogged stance on this aspect and insisting on going ahead with the same plans.

3.Compensation payment:

There seems to be a fairly good consensus that the compensation package paid by the Government is more than adequate and more than 94% of the land owners have agreed to sell of the land because of this. But then, it’s not just the land owners who are involved here. After the land reforms instituted here under Operation Barga, most of the land rests in the hands of land owners while the revenue/produce is shared between the land owners and the share croppers (who get the land cultivated). There are also the farmers who do the actual tilling on the land and work as daily wage earners – all this makes it a more elaborate sub-contracting set-up among owners, croppers and workers. It needs to be ensured that all the three concerned parties are compensated for this sale adequately and not just the land owners.

4.Employment opportunities for the displaced:

As mentioned earlier, there are several daily wage workers who would lose out when this land goes to corporates. This loss of livelihood may have to be compensated by the company in terms of employing them in the company or elsewhere and would again require them to train the workers in other skills. The Tatas reportedly plan to train workers for this but past records of most land acquisitions do not give us much of a comfort. We do not have a system to evaluate the effectiveness of the compensation provided and the aftermath of such acquisitions. There have been cases where the displaced receive monetary compensation but their future remains uncertain due to lack of investment knowledge and absence of any other skill sets.

Currently, agricultural land in India cannot be sold for non-agricultural purposes, so such sales happen only when the government comes into the picture by a back door approach of acquiring land from rural areas and selling it to corporates. But should they involve themselves in such transactions only for public utilities like roads, flyovers etc. or should they do this even for sale to private individuals? There may be people who do not wish to sell the space but are forced to do so because the Government thinks it is for the “greater good”.

Do we give farmers the right to sell their land to anyone they wish to? Since right to Property is not a Fundamental right (it was removed under the 44th amendment Act in 1978 by the Janata Party), it becomes an arbitrary call by the government. This naturally depresses the land prices due to lack of buyers and becomes a liability for farmers who want to move out of agriculture. The very idea of this law was to prevent reduction of agricultural land and acquisition of land by loan-sharks and corporates.

However, freeing land sales may also lead to the land going back to the hands of money lenders and zamindars – again a reversal of the process of democratization of land. Moreover, we cannot reduce the worker’s dependence on agriculture suddenly without adequately training him otherwise. And if you train him, will he be gainfully employed?

At a more macro-level, there’s a school of thought which believes that since agricultural productivity is low, the land should be utilized where it gives the best revenue. An argument for effective utilization of resources but I’m not too sure about this approach. A blogger has accused the middle class of romanticizing the notion of rural agriculture when it is totally a loss making concept.

Is agriculture a viable option, especially, considering the dependence of farmers on so many extraneous factors in agriculture like monsoon, price fluctuations, seed quality etc? With stagnant agricultural growth and lack of governmental interest (except in WTO forums and election manifestos), we may require providing farmers with this freedom to sell so that farmlands are easily disposable. This ease of disposal also brings in more buyers and increases the land rates.

However, any such decision must also take into account the social and environmental fallout of rapid and massive industrialization. Somewhere, we need to take a middle path between environmental and economic considerations. We cannot look at either of them in isolation and the challenge is to marry the two interests such that any “collateral damage” is limited. Future wars may be fought on energy and food security, as the Iraqi wars and African conflicts show and we need to be ready for that.


  1. The problem is not just about money or agricultural land use/misuse or political parties scoring brownie points with the electorate.... it is a systematic failure of society in general. A society, which is not educated (not in terms of literacy) & aware. Aware of Right or Wrong… Rights & Duties….Authority & Responsibility……People who just sway with their hearts. Minds long back fast asleep or never woken up at all.

    The fault lines run deep all throughout right from the impoverished farmer, laborer who does not know the value of land that he/ she owns or tills. The attraction of one-time money (which may be quite substantial to many of the marginal farmers & daily wage earners and an amount they might have never seen in their lifetimes & would never again as he/she does not know how to judiciously use it, ensure a secure future) to the industrialist who for simple reason of tax sops & to be in the good books of the politicians & rulers of the day…. to the Politicians themselves who may do it for “greater good of nation” from either side of fence whether opposing or proposing the good…. to the media who shall highlight such things till it gets the TRPs. It runs everywhere & runs deep….

    Why only this issue, take any recent news items… Farmer suicides in Maharashtra due to mounting debts… First the farmers go for crops like cotton & sugarcane leaving behind Rice & Wheat as they get higher returns in the former due to government buying & price fixing (which in itself is voter appeasement & self serving as most of the Sugar & Cotton mills belong to them or the corporates who contribute to the party funds) irrespective of market reality. If majority land is cultivated for cotton & the weather is considerate enough (some times it is) there comes a bumper crop situation…. now that should be a good news but no…the prices crash as supply surpasses Demand. Farmers enter into distress sale as there exists no proper infrastructure or support system to face this situation. The returns fall short of investment & the farmer commits suicide as he cannot pay the atrocious rates of interest he is being charged by the local money-lender (yes, ‘Bank’ is not a common word in rural India & There is no Code of money lenders commitment to customers that protects the interest of these small farmers). Now in the reverse situation of bad whether (Failure of Monsoon) the same act repeats only this time there is no crop to sell but the money borrowed has to be returned. What happens up the value chain is just a continuation of the story…. The mill owners will raise prices saying stocks are scarce or of poor quality… the retailer will hoard to get a higher price.. the consumer will complain of high prices & ask for higher salaries … Salary hike which enables the purchase of cloth at hiked up rates….the cloth becomes inaccessible to the poor who may have to borrow to get a piece of basic necessity & the cycle continues of non repayment & suicides… another news …. Another failure of government… another opposition protest & call for PM/Cm resignation… another election (large sum of hard earned salaried class money down the drain) & after some days the news is no longer priority.

    This still excludes corruption, foreign hand, unfair treaties; the desolate/ desperate/ clueless families left behind post the suicide of the bread earner etc…

    Whom do I fool when I read such instances & feel sad for a moment… utter some fowl words for everyone around… blame others & then go ahead with my routine life! ’I’ infact does nothing about it but cribs. The center of the problem is ‘I’ & the ‘I’ cannot come out of its own self-centered, short term gain approach to things & situations. ‘I’ has to get educated… be aware & act, then only is anything going to change. Else there is another event/ news/ crisis waiting to happen in the very next moment…. this problem runs across societies, castes religions, nations

  2. Have liked this one a lot...

  3. definitely not ur best blog...... lacking in humour and structured like a official report of some kind.....

  4. this piece has been written very well but i still feel its kind of partial.

  5. This one was a really serious and eye-opening post. Pradeep and Roopesh...excellent job done.
    We service class people never get time to peep into these farmer's lives :(
    I'm sure this one would help everyone to get a clearer picture of what Singur story is all about and learn something visible !!

  6. Why cann't we make the farmers the equity owners of the company instead? Loosers too gain some thing. The compensation is devided into two halves, one immideate monetory compensation to shift them from the place and settle down temporarily, another half as equity in the proposed company with clauses like a fixed value even if the firm fails financially, non trasferable for specific number of years etc. Thus loosers are made gainers, why cann't TATA try this way of CSR or ISR or whatever it is!!!!!!


  7. the work was good....but u should add more facts...a little more background information about d events

  8. costa rica real estateFri Jun 15, 03:39:00 am GMT+5:30

    The Chief Minister having set a stiff deadline, the administration was racing against time right from the morning. More than a thousand people were deployed to finish fencing the Tata Motors plot, but the work couldn't be completed on Tuesday. costa rica real estate Most farmers have resigned to fate, and a hunger strike is all that they could do to mark their protest. But the West Bengal government has, in the meanwhile, taken a giant stride toward resolving the imbroglio. It has decided to acknowledge the right to livelihood of even unrecorded tenants of Singur farmland and compensate them.

  9. The West Bengal government has taken a giant stride towards resolving the farmland acquisition controversy surrounding Tata Motors' proposed factory near Kolkata, reports CNBC-TV18.The Chief Minister having set a stiff deadline, the administration was racing against time right from the morning.sportsbook More than a thousand people were deployed to finish fencing the Tata Motors plot, but the work couldn't be completed on Tuesday.

  10. Tata Motors' car project in Singur is mired in controversy over the acquisition of agricultural land and forcible eviction of farmers.Ratan Tata, however,soporte tecnico jaco costa rica said they would not pull out of the state. In an interview with NDTV 24x7 Ratan Tata says his group will not pull out of the Singur project, despite the growing political controversy. Tata, who has been voted NDTV's 'Indian of the Year', said the proposed Tata Motors project had clearly got caught up in "a political quagmire."

  11. This comment has been removed by the author.