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Land acquisition for industrialization and compensation of displaced farmers

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  • Ghatak, Maitreesh
  • Mookherjee, Dilip

Abstract

This paper addresses the question of how farmers displaced by acquisition of agricultural land for the purpose of industrialization ought to be compensated. Prior to acquisition, the farmers are leasing in land from a private owner or local government with a legally mandated sharecropping contract. Compensation rules affect the decision of the landlord to sell the land ex post to an industrial developer, and ex ante incentives of tenants and landlord to make specific investments in agricultural productivity. Efficiency considerations are shown to require farmers be over-compensated in the event of conversion.

Suggested Citation

  • Ghatak, Maitreesh & Mookherjee, Dilip, 2014. "Land acquisition for industrialization and compensation of displaced farmers," Journal of Development Economics, Elsevier, vol. 110(C), pages 303-312.
    • Handle: RePEc:eee:deveco:v:110:y:2014:i:c:p:303-312
    DOI: 10.1016/j.jdeveco.2013.01.001
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    More about this item

    Keywords

    Land acquisition; Compensation; Industrialization; Land reform; Property rights;
    All these keywords.

    JEL classification:

    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • Q15 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Land Ownership and Tenure; Land Reform; Land Use; Irrigation; Agriculture and Environment
    • R52 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Land Use and Other Regulations

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