Indian National Congress general secretary Rahul Gandhi is clear that land acquisition is going to be a major plank in his party’s electoral campaign against the BSP regime led by Ms Mayawati in Uttar Pradesh.

The newly-appointed Union minister for rural development, Mr Jairam Ramesh, has said that the proposed bill to amend the antiquated Land Acquisition Act of 1894 would ensure land-losers receive better compensation than what is currently being given by the government of UP — and presumably the Congress-ruled Haryana government as well.

Across the length and breadth of the country, from West Bengal to Maharashtra, from Haryana to Orissa, the one politico-economic issue that has arguably inflamed passions the most in recent times is the acquisition of farmland for non-agricultural purposes.

The contentious set of circumstances that relate to the manner in which state governments have been acquiring land to set up a wide variety of projects is undoubtedly going to pose the biggest challenges for political leaders in the months ahead.

In the past, agricultural land would be acquired by state governments or their agencies for “public purposes” under the principle of “eminent domain” embodied in the act for building roads, bridges, railway tracks, hospitals, schools, power plants and so on.

The opposition to such acquisitions was relatively muted and usually considered “politically manageable” even if the already-underprivileged land-losers and those who were deprived of their livelihoods were, in the process, pushed further to the margins of society. Their interests were sacrificed for so-called wider public interests.

What has changed? The obvious answer is that governments have increasingly been using the ambiguities and “emergency clauses” — call them loopholes, if you like — in the act to acquire land ostensibly for public purposes but actually diverting it for the benefit of private entrepreneurs, sometimes in the name of public-private partnerships.

The Posco steel project, the special economic zones (SEZs) at Raigad in Maharashtra and Gurgaon in Haryana, the Yamuna and Ganga “expressways” in UP, the Delhi airport are a few prominent examples of this phenomenon.

Why has there been an apparently sudden rise in the number of violent protests by farmers over the last five years? Why are farmers willing to go behind bars and face bullets at a time when agriculture has become so unprofitable and real incomes of farmers have plummeted? Is the solution to the land acquisition problem just one of providing land-losers higher rates of compensation?

The questions are simple but the answers complex. The views of Ram Singh, a person who has studied the subject in depth and who teaches at the Delhi School of Economics, are worth summarising.

He points out that over and above the fact that land is being acquired for activities that have nothing even remotely to do with public purpose, judicial apathy has also facilitated ruthless trampling of farmers’ rights. Unlike its generous approach to the question of compensation, the judiciary, according to Prof. Singh, has by and large left the issue of whether land acquisitions are in the public interest to the discretion of the states.

Courts have annulled a few acquisitions on procedural grounds, but they have not questioned the legitimacy of acquisitions. After a tract of land is acquired and control rights transferred to private companies on long-term leases, typically the “excess” portion of the land is used for real estate or other commercial purposes, enabling the concerned companies to earn fortunes that are between 100 and 150 times the price paid for the land.

Prof. Singh points out why the compensation paid — even by relatively “generous” states like Haryana and UP — is invariably a minuscule proportion of the true market value of the land. First, there are restrictions imposed by the change in land-use regulations for agricultural land that acutely suppress the market price. But, more importantly, the very basis and process of determining the compensation amount is flawed.

Under Section 23 of the Act that entitles land-losers to receive the market value of the land plus a solatium of 30 per cent, compensation has to be determined on the basis of a floor price or “circle rate” fixed by the state government (that is way below market value) or the average of registered sale deeds of similar land (which often do not exist or cannot be found due to the thin markets for agricultural land).

The UP and Haryana governments offer 33-year annuity schemes with starting rates of `20,000-21,000 per acre and annual increments of `600-750. In certain cases, a proportion of the number of residential or commercial plots is reserved for land-losers. Additional one-time payments, re-training facilities and employment opportunities are promised but these benefits often do not reach the affected people, and when they do, they are very late.

The Haryana government gives a “no-litigation” bonus of 20 per cent to make the compensation amounts appear deceptively attractive, says Prof. Singh. A study done by him of judgements delivered by the Punjab and Haryana high courts in 2009-10 indicates that in 96 per cent of the cases, the compensation was far higher — an average of 342 per cent — than the one-fifth extra paid by the state government.