With the acquiring of land for development or industrial purposes becoming quite onerous under the Land Acquisition Act passed in 2013, land pooling has come into vogue. This method is being used to obtain land for Andhra Pradesh’s new capital Amravati as well as for Gujarat’s first smart city coming up in the Dholera Special Investment Region (SIR) south of Ahmedabad, where it has run into problems with farmers. The problems have arisen mainly because compensation is linked to the jhantri value rather than the market rate and Dholera SIR’s master development plan is such that most land owners will not retain their original plots but will be relocated (to areas which many believe are unsuitable). All this has led to the Gujarat High Court ordering the state government to maintain status quo on the land.

However, with a little imagination and some value addition coupled with proper & transparent communication to all stakeholders, land pooling (in Dholera and elsewhere) can be made a win-win for all as follows:

Step 1

Assign points for each farmer based on 250% of jhantri value of their land. This will adequately cover the low jhantri valuation issues that farmers have objected to.

Step 2

Assign additional points if the farm land is closer to highways or in otherwise deemed more valuable.

At the end of step 1 and 2, for the purpose of illustration let’s say that there are a total of 100 farmers and 10,000 points have been allocated among them.

Step 3

Once a Master Plan is complete and all the parcels are divided for the developed land; score each parcel based on the following criteria: flood plain (if it is in a flood plain it has a lower score); zoning, land use, proposed density and proximity to desirable areas (train stations, bus stations, hospitals, etc.).

Make sure total points of all developed parcels equal to total points derived from points 1 & 2. So in our example, total developed parcels will also have 10,000 points.

Step 4

Conduct a lottery to determine each farmer’s turn in picking parcels. A well conducted computerised lottery will negate any allegations of bias or favouritism.

Step 5

Have each farmer pick parcel(s) for a specific amount of points (say 20 points in our example) to start with. So after the end of first round 2,000 points worth of developed parcels would have been allotted. In this way, all 10000 points worth of developed parcels will be allotted in a total of five rounds. Note that a farmer who only has say 40 points based on their land value, will have chance to pick developed parcels in the first two rounds and not subsequent rounds.

The beauty of this method is not just in its simplicity and efficacy but also have beneficial side effects. For instance, it can encourage market based solutions in a state that thrives on them; Farmers will be able to trade their turn in the lottery with other farmers for money or other positions. For example, a farmer may trade their first round pick for two picks in later rounds as is the norm in a sports draft such as for NBA basketball in the United States.