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LATEST NEWS UPDATES | Price of Singur by Anup Sinha

Price of Singur by Anup Sinha

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published Published on Jul 12, 2011   modified Modified on Jul 12, 2011

The land problem in Singur was a turning point in the political fortunes of both the Left Front and the Trinamul Congress. The story is far from complete, and the legal twists and turns between Mamata Banerjee and the house of Tata could unfold in surprising ways. The issue of adequate compensation for farmers, who had to part with their land, is still an open question to which many well known economists of the country are trying to come up with acceptable answers. There are important related issues too, such as compulsory versus voluntary transfers of land, the definition of what constitutes ‘public purpose’ to justify acquisition, and the precise role of the government, on which debate continues. The Singur case has been recognized as one which is representative of many other instances of land acquisition for economic development, and the significance of finding a ‘just’ price of land. The debate is certainly worth the attention it has received in the media because of its significance for determining future directions of development of both agriculture and industry. In this debate, however, a couple of issues seem to have been pushed aside by the emphasis on finding a purely economic solution to the rather thorny problem.

The first aspect of the problem is the difficulty of finding the ‘equilibrium’ market price of land at which voluntary transactions can take place where both the buyer and the seller benefit, and, as economists put it, all mutually advantageous trade is exhausted. Land, because of its intrinsic nature of being naturally given and fixed in quantity, attracts rent. Hence, as every economist knows, prices based on the current incomes from land are inadequate. How much of the potential rent can be extracted by the buyer and the seller is a matter of bargaining. In large transactions, such as the one in Singur, it becomes a matter of political bargaining. When economists talk of an acceptable solution, they obviously mean that there is no unique solution. A complete failure of bargaining to arrive at a mutually acceptable solution is also a distinct possibility. Therefore, a theoretical solution may or may not be feasible on the ground. Political strengths of the bargaining parties determine outcomes. The historical context becomes critically important. Even the word ‘bargaining’ sounds softer on paper than on the ground. The use of coercive force, where land transactions are concerned, is extremely common — it can be observed everywhere starting from the big land mafias, the ruthless promoters and their middlemen working for a fee, to the small landlord evicting an even smaller tenant.

This brings me to the second aspect of the land problem. The land problem in India relates to finding an answer to the question: how best to acquire large tracts of land for development? Here, development is almost axiomatically understood as industrialization and its supportive physical infrastructure of roads and power plants and ports. Indeed, elementary textbooks on economic development use the words modernization, industrialization and urbanization interchangeably, as they do with the words traditional, agricultural and rural. Even Karl Marx once referred to all development as the progressive urbanization of the countryside. If it is all about development, then the land problem clearly is much more than finding the just price of land or even an acceptable solution on paper. It is about the creative destruction of natural spaces and geographies for the promotion of modern economic growth.

Modern economic growth as understood by the process of industrialization is quite recent, relative to the time frame of humans in the world, or even the period where humans discovered agriculture. Modern economic growth is only about 250 years old, in all shapes and speeds, from the great transformation in Western Europe to the socialist interregnum in the erstwhile Union of Soviet Socialist Republics, to the story of Mao’s and post-Mao China, to the variety of post colonial experiences in Asia, Africa and America.

Whatever may have been the actual stories of the advent of industry-led economic growth in different parts of the world, a common feature has been the dispossession of land and livelihoods of some people, sometimes many people, almost invariably with some connection to land and agricultural livelihoods. Indeed, as many economists have observed, the key role of agriculture has been to provide resources easily and cheaply for industrialization to proceed with minimum interruptions. Agriculture has provided land and its produce (food and raw materials) and released labour from productive activity. In return, agriculture is supposed to gain access to industrial inputs that enhance productivity like tractors and fertilizers, and other industrial consumer goods. This relation between the two sectors is not as obvious and smooth as it might appear. The mechanism of this transfer of resources has been either through the aegis of State control or through extremely imperfect markets. At the initial stages of industrialization a critical mass of resources (primitive accumulation as it is sometimes called) have to be transferred from the rural, agricultural, non-modern sector. This has invariably been a troubled process fraught with instances of violence, cruelty and injustice, and always with the tacit support of the modern State.

The historically famous enclosure movement in England, the rise of the Zaibatsu and the Meiji reforms in Japan, the dispossession of the American Indians and the large-scale violence of Stalin’s collectivization programme are all stories of violence of varying degrees — where the peasantry or other indigenous people have had to bear heavy costs. The American story is particularly telling, since the continent is known to have always had abundant land compared to the number of people who inhabited it. I remember once seeing a poster on display in a shop on an American Indian reservation some years ago which claimed quite starkly: “They made many promises but kept only one; they promised to take our land, and they took it.”

It was in the erstwhile Soviet Union, perhaps for the first time in history, that a conscious debate took place in the 1920s about the role of agriculture in modern industrialization. One view was to allow the farmers to enrich themselves, which in turn would create the demand for industrial goods, and the tempo of industrialization could be stepped up. The other view was to put industry in command and ensure that all resources from the agriculture sector would be made available as easily and cheaply as possible. The first view never got off the ground, and Stalin’s version of the second view had disastrous long-term consequences, in terms of human costs as well as the productivity of land. Even much later, in the decades of the 1960s and the 1970s, mainstream development economists debated the complex theory of the State-led urban bias in rural planning for growth and transformation of the agricultural sector in backward economies.

The economies which came late into the race for modern economic growth, a country like India for instance, had dreams of a fast and decisive transformation, led by planned industrial growth. Industrialization was not as rapid as was envisaged and the planning strategies went awry in terms of poverty reduction and employment generation. The narratives of the dispossessed, during that phase of planned industrialization are gradually coming into the open. Agriculture did develop to some extent, but with stark inequalities and widespread economic deprivation. However, a new emerging group of landowning farmers did turn rich, and they did not want to be left out from being able to consume modern industrial goods and services. A significant component of the urge to industrialize came from this source. This was part of the second push for industrial growth after the opening up of the economy since 1991.

The push to industrialize in West Bengal came from the necessity of increasing income and employment opportunities after the growth of the agricultural sector began to stagnate in the state. After years of effectively denying the necessity of modern industry as a submission to capitalism, the Left Front woke up late to the lure of global capital, and, more importantly, lost the political bargaining game in the process of acquiring land for the big push towards industrialization. The rest is recent history.

The new government in West Bengal now has the daunting task of stepping up industrial growth to improve the state’s domestic product, but with a commitment to avoid the human costs. It has admitted the need for industrialization as an instrument for increasing the welfare of the people. The ideology of modern industrialization, in this sense, is shared by both the Left Front and the new coalition in power. The story of modernization, industrialization and urbanization, however, is about growth with violence and dispossessions. It can come only at increasing costs. And without the blessings of the state, no industry can grow and survive. Any government that believes costs are likely to be negligible could be sadly mistaken.

Singur, then, is not merely a question of land and its right price; it is an issue of changing spaces and geographies of land and the people who live on it. It was not the first instance of developmental violence, nor by any stretch of imagination, is it going to be the last. The only good that may yet come out of the experience is that it might provoke some thinking beyond the text-books of the past century on what development should really be all about, and the instrumentalities of attaining that goal.

The author is professor of economics, Indian Institute of Management, Calcutta

The Telegraph, 13 July, 2011, http://www.telegraphindia.com/1110713/jsp/opinion/story_14203980.jsp

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