The Neoliberal 'Reform' That Could Make the Lives of Millions of Peasants in India Much Much Worse
One year after the Land Acquisition Act was passed in Parliament with bipartisan support, commerce minister Nirmala Sitharaman stated that changes will be made to the Act during the upcoming Winter Session of Parliament.
The earliest indication that this would happen, came from of all people, a first-time MP and microfinance lobbyist Jayant Sinha. Sinha had mentioned in a CNBC interview right after BJP’s win that land acquisition policy was the first priority. For those wondering why CNBC interviewed Sinha and allowed Sinha to lay out the new Government’s priorities, and why Sinha has been appointed junior finance minister, they should refer – Who is guiding Modi’s economic thinking and what is their background?
Sinha’s comments became the reason for the media to query newly appointed rural affairs minister Gopinath Munde about the land acquisition law. Mr. Munde categorically denied any changes would occur and went beyond his brief to comment that it was a good law and that BJP had supported it. Munde specifically noted
“The consent of villages is a must. There can be no change in the consent clause.”
Microfinance lobbyist Sinha’s interference was repudiated by Mr. Munde:
“Now it is my responsibility that this law should be implemented. I will do this rigorously”
Mr. Munde died soon after in a road accident in Delhi. For some reason, the Hindu editorial writers chose to compare Mr. Munde’s car collision incident to that of Sunita Narain’s near death experience at the same spot. Sunita Narain is an environmentalist who was fighting the Adani group in Gujarat at that time.
“The consent clause should be removed from PPP [public-private] projects. Alternatively, consent requirement may be brought down to 50 per cent,” says the Ministry in its note.
In its note, the Ministry has also suggested amendments to another key provision on acquisition of “multi-cropped irrigated land”.
This shocking reversal had the Times of India noting:
Gadkari’s upfront assertion that the law would be amended is a radical change from the stance taken by Gopinath Munde in his brief stint at the Krishi Bhavan before he died in a road accident.
The perfidious influence of neoliberal forces in the form of Jayant Sinha and his previous employer, billionaire Omidyar, should make one think very hard about the proposed changes to existing laws.
Just how perfidious is Omidyar? – Citing intelligence reports, the Indian Govt. had denied permission to PRS Legislative services, a private NGO, from accepting a million USD from Omidyar. Later, PRS founder, Madhukar went on to join the Omidyar network as director of investments.
Mark Ames of Pando Daily had reported on how Omidyar allowed Jayant Sinha to indulge in BJP party work while he was working as the India MD of a supposedly apolitical network. Mr. Omidyar could have allowed this only if he saw potential benefits in doing so. By Jan 2014, it became clear that BJP would win the national elections. At this stage, Mr. Sinha resigned from Omidyar Network and ran for elections from his father’s well-nurtured constituency. In his latest article, Mark Ames writes about Omidyar funded candidates gaining power in Ukraine and India as being part of the same story:
Jayant Sinha—and his boss, Omidyar—have been playing an unusual dual role in Indian politics over the past few years, conflating supposedly philanthropic activities with decidedly political investments …
While Sinha’s influence on the changes to the land acquisition law is apparent, other decidedly deadlier policies funded by Omidyar for supporting land acquisition are not very apparent.
One of these is the land titling project for which Omidyar granted 9 million USD to Landesa during 2009-2012 for their rural land titling work in India. Landesa is a former counter-insurgency agency that operated during the Vietnam War and later advised military juntas in Central America.
Omidyar also granted 250,000 USD to Janaagraha in 2011 to establish urban land titling pogroms. Janaagraha is a ‘new civil society’ group trying to frame urban civic policies favoring the elites. The 250,000 USD grant was not publicized by either Omidyar Network or Janaagraha. Swati Ramanathan, co-founder of Janaagraha was drafting Project Platinum, a land titling law, for the Ministry of Urban Development. Given that the Home Ministry had stopped NGOs from accepting Omidyar money, Janaagraha may have felt the need to keep Omidyar’s explicit funding for land titling under wraps.
Janaagraha also gained much notoriety and infamy when it tried to privatise Bangalore’s water supply. A researcher attempted to question them, but she was rebuffed with this reply from the receptionist: “We have been instructed not to discuss water with anybody or make appointments about GBWASP”. Given that Janaagraha used part of Omidyar’s 3 million USD grant to demand government transparency, the lack of transparency from Janaagraha itself is stunning hypocrisy.
Land Titling and Liberalisation
Land titling is an extreme neo-liberal project whose purpose is liberalisation of land markets, specifically those related to agriculture. This would then create a tradable land market where the global rich including rich oligarchs in India can easily acquire precious farmland. It would also aid in creating debt markets that wealthy speculators love to play in (remember the US subprime market?). The land titles would allow land owners to take out loans using their land as collateral (currently banned in India for farmland) thereby allowing creation of mortgage bonds and new debt markets.
Research shows that land titling weakens the State and encourages speculation:
… this approach leads to a decoupling of benefits and costs of land use, which causes external costs, encourages rent-seeking behaviour and weakens the state
Supporting land titling efforts and privatization of farmland abroad was a priority of the business friendly Reagan administration in the 1980s. USAID started the first land titling program in Honduras with the following objective:
… promoting land tenure, land markets and property rights to secure access to land and unleash its productive potential;
During 1983–2001, over 150,000 titles to 2.86 million acres of land in Honduras were provided through USAID funding. In Ukraine, from 1999 to 2003, USAID sponsored issuance of about 225,000 land titles.
USAID believes that property rights are the “hidden infrastructure of economic growth.” This belief is the very core of a neoliberal state as noted by Professor David Harvey and Nobel Laureate Joseph Stiglitz
In India, Sinha, Janaagraha and Landesa are taking care of Omidyar’s neoliberal objectives, while in Ukraine it is the ‘Center UA’ group, which took part in the Feb 2014 coup in Ukraine.
Jayant Sinha’s Omidyar-funded Ukrainian counterpart, Svitlana Zalishchuk is an activist of ‘Reanimation Package of Reforms’. One of the key demands of this group is “land reform”, by which is meant:
… establishing modern market for farmland based on an understandable, transparent state land title registration system and state guarantees that property rights will be respected.
… develop mechanisms for regulating the land market and efficient trade in farmland
The Ukraine “land reforms” are meant to lift moratorium on land sales to foreign investors and domestic oligarchs. The Government displaced in the February coup was not speeding up the “land reforms” process.
How precious is Ukrainian farmland? – Just watch this video where a German farmer leasing Ukrainian farmland describes the magic of Ukraine’s black earth.
Currently foreigners can only lease farmland, but if Zalishchuk and Omidyar have it their way then foreigners can even buy Ukrainian farmland. Super-rich investors like Saudi Arabia’s Agroinvest can buy up thousands upon thousands of hectares of Ukrainian farmland to produce grains for Saudi needs. Since they cannot do so currently, Agroinvest only does contract farming which is not as profitable as owning the land and farming it.
Local Ukrainian agro-garchs will also profit from the “land reforms” as FT points out
Lifting the moratorium on the sale of land looks likely to raise further issues. As it becomes clear that investors will soon be able to buy Ukraine’s fertile land, the country’s powerful oligarchs are circling.
In this context, Groningen university professors warn:
As land resources become increasingly marketized and commodified, the state should ensure that the emerging land market does not result in a rapid concentration of land in the hands of a mighty few.
Land Titling leads to Land Acquisition for the Super-Rich
Business advisory firm Dun and Bradstreet notes the Why of Land Titling –
… when it is the case of agricultural land, the asset market is very fragmented and not well documented. Thus improper documentation could turn out to be a major hindrance for land acquisition and settlement of legal issues. Thus more focus on the issue of land title is required for successful implementation of the new land acquisition Bill
Indian industry and their foreign backers want the land acquisition to be made profitable for them:
“The Land Acquisition Act in its present form needs to be scrapped and rewritten if the new government seriously wants to do development,” says Sunil Kanoria, Vice Chairman of Srei Infrastructure Finance.
The entire act itself is flawed,” says S.V. Goyal, CEO, Reliance Haryana SEZ, a subsidiary of Reliance Industries.
Free-market propagandist Gita Gopinath, who worked at the notoriously neoliberal U-Chicago, stated in the usual arrogant, know-all manner of her elitist class
“There are no ifs and buts”
“Modi will have to urgently overhaul laws related to land acquisition, labour and tax to galvanise capital investment”
The free-market propagandists want the Govt. to interfere everywhere as long as it profits them – at the cost of wages, at the cost of the environment, food supplies and existing rural livelihoods.
Indian economists have noted this aspect
Mired in recession, the corporate sector in India, and foreign investors behind it, actually demand more State intervention, not less. They want land, other natural resources, and public sector assets at throwaway prices, in the face of mass resistance. They want the continuation of, and even increase in, giant subsidies to itself. They need the State to rig tariffs in its favour. They demand the encroachment of yet more vulnerable sectors to corporate capital. And they want the State’s strong arm to tackle an increasingly restive working class.
However, resentment is brewing against this pro-rich agenda
There is little resentment among those affected when the government buys land to build a bridge or a road. But when land is acquired for a private company, the government is seen as taking sides – favouring the rich against the poor.
A Gujarat farmer said this about Modi’s smart city plans: “It’s all lies. Losing my land will ruin me.”
What they’re fighting over is some of the most fertile soil in Gujarat, a plain about 100km south of the state’s biggest city of Ahmedabad and near an inlet of the Arabian sea where a port for the new city is planned.
The Supreme Court of India had noted in March 2011
“Any attempt by the State to acquire land by promoting a public purpose to benefit a particular group of people, or to serve any particular purpose at the cost of the interests of a large section of people, especially of the common people, defeats the very concept of public purpose,” the apex court ruled.
Currently, Chandra Babu Naidu, the famously neoliberal CM of Andhra is engaged in land acquisition activities of the kind opposed by the Supreme Court. Leading Naidu’s effort is an industrialist, YS Chowdary who defaulted on state bank loans and was bailed out by the Government. YS Chowdary is also Modi’s new cabinet minister for science and technology. Chowdary’s conflict of interest has not been publicized: He has collaborated with foreign institutions to frame technology laws in India that seemingly favor foreign investors.
What makes Naidu’s land acquisition truly unfortunate is that there is no real requirement for it. An expert committee had recommended against acquiring fertile farmland and advised that Naidu could form the new capital in existing urban areas.
But Naidu has chosen to acquire pristine land in serene surroundings by the Krishna River. This land was once the center of Buddhism in Andhra and is now slated to become a hub for commercialization, malls and all the filth associated with modern-day cities.
Vast swathes of lush fields where vegetables are grown throughout the year dot the picturesque river front.
The government’s assertion that a ‘river-front capital’ is being planned has sent farmers into a tizzy, besides throwing open questions about their livelihood
The farmers in these villages have one crop or the other in the field all through the year. Banana, yam, turmeric, cotton and a variety of horticulture crops are being cultivated in these stretches, which keep the ryots busy, apart from reaping good profits.
Landesa’s misleading claims
Landesa grandly claims on its website that
With the help of Landesa’s global team of land tenure experts, and in partnership with governments around the world, more than 109 million families in 40 countries have obtained secure land rights.
Landesa partners with governments to create laws, policies, and programs that provide secure land rights for the poorest.
However, the reality of Landesa’s work is to intrude and piggyback on existing Government land programs and offer paralegal help to the poor who are already being granted land by the government. The paralegal help comes in the form of helping the new and existing land owners obtain formal land titles. According to Landesa, a title will help the land owners to obtain micro-credit (by mortgaging the land with the land title).
The results of decades long land titling processes in Latin America are very discouraging:
despite several decades of (donor-promoted) land titling programs, along with the ‘micro-finance revolution,’ rural credit markets remain a weak spot in Latin American economic performance.
China forbids using farmland as collateral for micro-loans and microfinance
As land and homes are often the “last straw” for farmers, allowing them to be leveraged for loans may result in complete losses for the peasants and threaten social stability, said Chen Xiwen, director of the Central Rural Work Leading Group.
“It’s not good for farmers to end up without land and houses as China’s social security system is not fully developed especially in rural areas,” so stripping a farmer of his land and abode will destabilize social order, Chen said.
Land titling program is expensive and unnecessary
UCLA Law Professor Zasloff pointed out that the Indian titling program is expensive and unnecessary because India already has a system of deeds registration and with existing records being computerized, banks can access these records if they consider giving loans.
The revenue offices were in a position to issue computerised ‘adangal’ copy if any farmer asked for it. The ‘adangal’ copies would help the farmers to secure bank loans and make a formal claim for crop insurance.
Note: Adangal is a record of possession as well as of crops grown each year and contains a column in which the names of both the registered holder and the tenants are recorded.
The horrendous consequences of land titling in Honduras
Research concluded that the USAID land titling work that started in Honduras in 1982 attained none of its objectives and instead
… triggered new sources of land conflicts, thus adding to the existing complex of local rules and laws.
… the failure of the project is rooted in mistaken assumptions about the social organization of property rights and the causes of insecurity.
Dr. Janelle Larson who grew up on a farm in Kansas and is now professor at Penn State noted in her 1995 PhD Dissertation titled “An Economic Analysis of Land Titling in Honduras”:
… ten years after the start of the project, the original goals have not been achieved. This analysis found that titling does not affect technical efficiency, access to credit, or the use of inputs.
… basic education and technical assistance, rather than expensive land titling projects, should be promoted to enhance access to credit, the use of inputs and increased technical efficiency
Ohio State Professor Sweeney and her doctoral student Zoe Pearson, who investigated the links between drug trafficking and deforestation in Honduras, noted
“land titles are only as meaningful as the guns and money that back them up.”
Bloomberg reported that Honduras, “the former breadbasket of Central America now imports 83 percent of the rice it consumes.”
“The international lending agencies have destroyed the basic grains industry in Honduras,” said Gilberto Rios, executive secretary of FIAN Honduras. “The best land now produces things like African palms, which are not for consumption.’
There now are 1,300 rice farmers in Honduras, compared with more than 20,000 in 1989, according to human rights group FIAN.
As FIAN noted above, the land has been increasingly allocated toward export oriented commodities like Palm oil.
Professor Lynn Holland who studied the pattern of land laws in Honduras since the 1950s noted that palm oil producers are rich and powerful oligarchs who have been waging a war against peasant farmers belonging to small cooperatives in the lower Aguan region.
Prof. Holland also notes that the USAID 1982 titling efforts reflected a distinct shift from collective to individual titling, from local to export markets, and from mid-size cooperatives to both smaller and larger land holdings.
This got even worse after the passage of the Agricultural Modernization Law underwritten by the World Bank in 1992
In a few short years after passage of the Agricultural Modernization Law, three large landowners had taken over three quarters of the arable land in the Lower AguÃ¡n Valley. Since then, African palm oil has become a chief export for Honduras.
One other disastrous consequence of free-market reforms in Honduras, and which reminds one of Modi’s smart cities concept is the plan for private cities:
… the government has agreed to let an investment group build an experimental city with no taxes on income, capital gains or sales.
Proponents say the tiny, as-yet unnamed town will become a Central American beacon of job creation and investment, by combining secure property rights with minimal government interference.
Initially the Honduras Supreme Court struck down this absurd and degrading proposal for Libertarian cities, but later the Honduras Congress fired four of those Supreme Court judges and appointed a new Supreme Court that struck down arguments against the Liberterian charter cities. A Committee for Adoption of Best Practices (CAMP) approved regulations and recommended judges in the special zones. Unsurprisingly, but shockingly CAMP’s members include non-Hondurans such as
Barbara Kolm, the libertarian president of Austria’s Hayek Institute; Cato Institute senior fellow Richard Rahn; Ronald Reagan’s son Michael; Mark Skousen, producer of the libertarian FreedomFest conference; U.S. anti-tax crusader Grover Norquis.
One can only hope that this evil does not reach India.
[Aditya Velivelli is originally from Hyderabad, India. He currently works as thermal applications engineer in Detroit].