Tata car: Why farmers are on a warpath

A K Bhattacharya
Source : http://inhome.rediff.com/money/2006/dec/06tata.htm

Some weeks ago, this column had argued how West Bengal Chief Minister Buddhadeb Bhattacharjee was setting a healthy precedent for all other states to emulate. This was in the context of the acquisition of land at Singur, about 50 kilometres north-west of Kolkata in West Bengal, to help the Tatas set up their small car project.

And the healthy precedent was that the Bengal government had agreed to pay compensation to farmers for acquiring their land at a generous rate -- almost 150 per cent more than the prevailing market price.

This was much more than what most other state governments had ordained as the price to be paid for acquiring land from farmers for setting up industries or special economic zones there. For instance, owners of single-crop land in Singur got Rs 8.4 lakh (Rs 840,000) per acre (Rs 12 lakh -- Rs 1.2 million -- an acre if the land was used for double-cropping), while the Maharashtra farmers got only Rs 24,000 an acre.

This comparison may not be appropriate. For, the land at Singur has a greater market value because it is close to the National Highway No. 2, connecting Kolkata with Delhi, and the land in question in Maharashtra may not enjoy a similar advantage.

Yet, it has to be conceded that the compensation package decided by the West Bengal government is generous and an important factor why well over 9,000 land-owners at Singur (over 94 per cent of the total land to be acquired) have agreed to the deal and have already received their compensation money from the state government.

The project may be going through some hiccups now because of the controversy raised by political parties like the Trinamool Congress and the BJP. But if Mr Bhattacharjee and the Tatas show some patience, maturity and, most importantly, concern for two specific issues, this controversy should soon die down.

The first issue pertains to identifying the beneficiaries of the compensation money that has already been doled out by the government. Are these beneficiaries the owners of the land or those who were directly engaged in farming activities there?

Thanks to land reforms in West Bengal in the last three decades, the agrarian workforce in the state has three distinct classes -- land-owners, share-croppers (who get the land cultivated and share the produce with the land-owners) and farmers, who work on the field and do the actual cultivation as daily wage-earners.

Mind you, Singur has a high literacy rate of 76 per cent and it is reasonable to believe that the land-owner at Singur is not himself interested in tilling the land. He either gets his land cultivated by a share-copper or he himself gets workers from near-by areas to cultivate the land and pays them daily wages.

So, when the West Bengal government doled out generous compensation for land-owners at Singur, the beneficiaries were not necessarily the farmers who were cultivating the land being acquired. In most cases, the beneficiaries were the land-owners.

Few share-croppers or farmers working on the Singur land got any compensation. If there is any groundswell of support for those political leaders opposed to the Tata project at Singur, it is because these share-croppers and farmers have been left out of the party.

Which is why, it is heartening to learn that Mr Bhattacharjee is willing to reconsider the compensation issue and examine if those who were directly dependent on the land being acquired and did not get any money can get some compensation.

The day these share-croppers and farmers are also adequately compensated, the political leaders opposing the Singur project will lose whatever support they still have in that area. Once the West Bengal chief minister recognises this problem and makes amends, it will again set a healthy precedent for other states.

The lesson they should learn from Singur is that it is not enough to compensate only the owners of the land being acquired for an industrial project or a special economic zone, it is equally important to allocate some compensation for those farmers who are otherwise dependent on such land.

The second issue that should be of concern to Mr Bhattacharjee is the perception that the Tata small car project has acquired land far in excess of what it actually requires to set up a factory of that capacity. Maruti Udyog is situated in a total land area of 300 acres and has an installed capacity of 3.5 lakh (350,000) cars a year. The Singur land being handed over to the Tatas is three times more than what Maruti Udyog has -- and for producing only one lakh (100,000) cars.

The question that Mr Bhattacharjee should answer is why the Tatas need 997 acres of land and whether there are other facilities that are being planned in that same area. Without such explanation, questions on the justification of allocating the Singur land to the Tatas will continue to be raised.