Rehabilitation Myths? How Transaction Costs Reduce Farmer Welfare After Land Acquisition

What is it about?

In this article, we show how certain factors costing farmers after their displacement when they embark on the process of acquiring new land. As the post-displacement scenario and the investment decisions of land owners to restore income have not been carefully examined, we use a transaction cost framework to suggest that local specificities related to land characteristics, uncertainties in search for alternatives and information constraints may impose high non-monetary costs on displaced farmers and force them to settle for inferior new land. The article concludes with a preliminary assessment of whether the newly enacted land acquisition framework, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLARR) Act 2013, promises to minimize these ex-post transaction costs that farmers face.

Featured Image

Why is it important?

High non-monetary costs while purchasing new land force displaced farmers to settle for inferior land. These costs are often overlooked while institutionalizing the land acquisition and Rehabilitation and Resettlement of displaced farmers, which are important to be considered.