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Indian policy planners 'sacrificing' progress of farm sector for the benefit of industry

By NS Venkataraman* 

There appears to be a mistaken view amongst policy planners in the Central government and state governments that ensuring the growth of industrial, infrastructure and housing sector is very vital for the economic growth of the country, even if it were to be ensured by sacrificing the progress of agricultural sector to some extent, by diverting the farm land for other purposes.
This view appears to have been prompted by the assumption by the policy planners that India produces sufficient food grains for its requirements, which, according to the policy planners, is evident from the fact that India exports rice, wheat, sugar produced from sugarcane and other agri commodities, with India emerging as the largest exporter of rice in the world and second largest producer of sugar in the world.
Obviously, the policy planners seem to think that diverting some of the farm land for other purpose would not adversely impact the level of food security in India.

Food security in India - A myth

The view that India enjoys a situation of food security due to “the surplus food grain production" is a myth, since more than 20% of Indian population is estimated to be living below poverty line and their affordability to buy adequate food grain is very low. If every Indian including the 20% of the population living below poverty line were to get three meals a day that is required for a sound health, then the availability of food grain in India would be grossly inadequate.
For example, there is a view that India is the largest producer of milk in the world and India has surplus milk production. But, the ground reality is that large section of people in the lower income group do not buy milk, since they cannot afford to do so, with their level of income.
The fact is that India has “surplus food grains for export" only because the purchasing capacity of section of Indian population is very low.
According to UN Report, the undernourished people in India is 224.3 million in the period 2019-2021.

Protest against acquisition of farm land

In recent times, there are many instances all over India when farm land are sought to be diverted for building industrial, infrastructure and housing projects.
There have been many protests, particularly by the marginal farmers, against the acquisition of farm land, which provides the life sustaining source of their income for them. the average landholding of marginal farmers, who constitute around 65 per cent of total farmers in India, is less than one acre (0.4 hectares).
There are huge protests now going on in Tamil Nadu against acquisition of around 5746.18 acre of land, which includes 3,774.01 acres of wet land at Parandur near Chennai for airport project. There is another protest going on by farmers against acquisition of farm land to the extent of 3,174 acres for setting up industrial estate by SIPCOT at Cheyyar near Thiruvannamalai in Tamil Nadu. Another protest is going on against the acquisition of 820 acres of farm land for setting up industrial estate by SIPCOT near Namakkal in Tamil Nadu.
All over India, there have been several other protests by the farmers against acquiring farm land for satellite towns, for setting up Special Economic Zone, for opening mines, crude oil exploration project, petroleum refinery project etc.
Facing such protest, government says that it would compensate the farmers whose farm land would be acquired, by paying them compensation amount more than the market value for acquired farm land. To buy peace with the agitating farmers, some more measures are being announced, some of which could be “cosmetic" that have no real significance for the farmers.
The ground reality is that the farmers only know farming operations and have no skill in other areas and therefore, justifiably refuse to accept the proposal of the government to rehabilitate them elsewhere. The apprehension of the farmers that such attempts to resettle them elsewhere would uproot their social and economic security in the long run is real and genuine.
The compensation amount given by the government would be a one time payment and with the face value of the rupee constantly coming down due to inflation etc. Such compensation amount would not help the farmers in the long run, even as they would be denied the benefit of recurring income from their farm land.

Logical question

While industrial growth, infrastructure and housing projects are necessary, the question is whether they should happen by diverting farm land for such projects, which virtually mean that the area of land under agricultural operation would come down and production of agricultural products would decline.
The next logical question is whether the alternate options for acquiring land for industrial and other projects have been adequately studied and explored, instead of choosing the easy option of diverting the farm land for the purpose.

Alternate options

There are many operating industrial units all over India, which have large area of surplus and unused land. Similarly, there are many educational institutions and universities which too have large area of unused land. In all such cases, there are no plans for utilizing such land and are just remaining unused for decades.
There are thousands of industrial units in small, medium and large scale that have become sick and have been remaining closed for several years with little prospects of being reopened. Such locations, where the units have unused land apart from building and other facilities, can be put to use for setting up new industries, instead of opting to take over fam land.
It is reported that Indian Railway has 12,066 acres of unused land in different parts of India. Further, central and state governments have large area of unused land in their possession generally known as Poromboke land.
If such unused land were to be assessed, it would be several thousands of hectare on all India basis. Unfortunately, no organised study has been initiated by the central and state governments to assess the availability of such land and the feasibility of putting them to use.

Indian wasteland area

It was estimated that the spatial extent of wasteland for entire country was around 55.76 million hectares (16.96% of geographical area of the country i.e. 328.72 million hectares) in the year 2015-16. These waste land include dense scrub, water logged marshy land, sandy area, degraded pastures / grazing land, ravenous land, land affected by salinity and alkalinity, barren rocky area etc. (Source: NRSC, ISRO, Dept of Space & Dept of Land Resources, Ministry of rural Development).
Such waste land can be recovered and reclaimed and put to use for setting up industries and housing projects and infrastructure projects. Even sea is being reclaimed to control flooding and make more space for agriculture and coastal industries.

Continuing loss of farm land

Farm land acquisition for other non agricultural purpose is often sought to be justified by policy planners by arguing that acquisition is made only in some areas and acquired area is small compared to the overall farm land area available in the country.
This argument is wrong, as in the past, total farm land area in India has come down considerably due to repeated farm land acquisition for other purpose. It needs to be kept in view that the process of converting the fam land for industrial and other purpose is an irreversible process.
According to the Ministry of Agriculture, India lost 16,000 sq km (1.6 million hectares) or 0.8% of India’s gross cropped area, in a 10-year period due to diversion of farm land for other purpose. Such trend is continuing with farm land being acquired all over India for other purposes repeatedly in spite of protests from farmers.

What policy planners need to know

The policy planners should not ignore the fact that the overall economic and social benefits that agricultural growth provide could be higher than the overall benefits that industrial, infrastructure and housing projects can provide for the same level of investment.
Further, billions of people in India depend on agriculture for their economic survival and they have skill only in agricultural operation. The farmers in various age group including large number of women agricultural workers cannot be trained in other skilled jobs in short period of time.
When farm land would be taken away for other purpose, the consequent unemployment amongst the farm labourers would become a big social and economic issue.
Industrial projects cannot generate the type of employment opportunities that agricultural sector can do.
The policy planners should not lose the sight of the fact that India’s strength is agricultural economy with vast farm land area, different climatic conditions, multiple soil conditions and enormous traditional knowledge with regard to agricultural practices.
Moreover, policy planners should not ignore the fact that Indian population is increasing and may touch a total of 2 billion people in the next few decades. To meet the requirement of such population, there is pressing need for agricultural production to increase at least by 35 to 40% to meet the food demand. Considering this compulsive need, reducing the farm land area cannot be justified under any circumstance.

What need to be done?

In recent times, though considerable progress has been made in agricultural technology in India, still there is a long way to go.
For example, in the case of rice, per hectare production of rice in India is 4.3 tonnes as against yield of 6.5 tonnes per hectare in China. In the case of maize / corn, per hectare yield in India is around 3.5 tonnes as against 11 tonnes per hectare in USA.
Productivity need to be improved and optimised considerably.
There is need to develop cold chain infrastructure to remove supply bottlenecks and prevent harvest loss which is said to be around Rs. 92,561 crore per annum.
Investment in agriculture technology is required to make it more sustainable to enable farmers to face the climate changes and other issues. The share of the corporate sector in total public and private investment in agriculture is just below 0.2%, which has to be substantially increased.
The focus should be on greater investment in agriculture sector and not taking away the farm land for non agriculture purpose.


The issue is not agricultural sector versus industrial/ infrastructure sector. Both have a complimentary role to play but certainly not at the cost of each other.
Consider the case of farm land acquisition at Parandur near Chennai for building second airport.
In Meenambakkam area in Chennai, there is a new airport built some years back and there is also an old airport which is largely not used adequately. For setting up the second airport, if non farm land is not available, then the only option is to expand and utilise the facilities at old airport and nearby areas to expand the facilities to the extent possible.
In other words, it means that the second airport proposal should be given up, as augmenting infrastructure projects at the expense of agriculture industry is a counter productive exercise and similar to the act of killing the goose that lay the golden eggs.
*Trustee, Nandini Voice For The Deprived, Chennai



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