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Farmer Displacement and Marginalization: A Transaction Cost Explanation from an Irrigation Project in India

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  • Patil, Vikram S.
  • Ghosh, Ranjan

Abstract

In developing countries, the general principle followed in land acquisition for infrastructure projects is monetary compensation. The compensation is designed in a way that it enables farmers to buy comparable land assets. Despite this monetary compensation, a large proportion of farming population ends up not owning comparable assets, getting further marginalized in the process. We explain this using a transaction cost analysis of the dominant land acquisition framework in India (LAA, 1894). Based on the case of displaced farmers of Upper Krishna project in Karnataka, we show how specificities related to land characteristics, uncertainties in search for alternatives and information constrains impose high non-monetary transaction costs on farmers. We then assess whether or not the newly proposed land acquisition framework (RFCTLARR, 2015) promises to minimize transaction costs on farmers.

Suggested Citation

  • Patil, Vikram S. & Ghosh, Ranjan, 2015. "Farmer Displacement and Marginalization: A Transaction Cost Explanation from an Irrigation Project in India," 2015 Conference, August 9-14, 2015, Milan, Italy 229378, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:229378
    DOI: 10.22004/ag.econ.229378
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    References listed on IDEAS

    as
    1. Williamson, Oliver E, 1979. "Transaction-Cost Economics: The Governance of Contractural Relations," Journal of Law and Economics, University of Chicago Press, vol. 22(2), pages 233-261, October.
    2. Williamson, Oliver E., 1987. "Transaction cost economics : The comparative contracting perspective," Journal of Economic Behavior & Organization, Elsevier, vol. 8(4), pages 617-625, December.
    3. Cernea, Michael, 1997. "The risks and reconstruction model for resettling displaced populations," World Development, Elsevier, vol. 25(10), pages 1569-1587, October.
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    Keywords

    Agricultural and Food Policy; Land Economics/Use;

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