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Posco in south

Published : Jul 29, 2011 00:00 IST

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The South Korean firm is trying to set up a steel plant in Karnataka's Gadag district, but the farmers are not happy.

recently in Halligudi

THERE is money on offer, but the farmers of Halligudi, a hamlet of 5,500 people in Karnataka's Gadag district, are hardly happy at the prospect of 3,382 acres (one acre is 0.4 hectare) of farmland being acquired for a Rs.32,336-crore steel plant south of National Highway 63, which runs between Karwar and Bellary.

The plant is to be set up by the Indian subsidiary of the South Korean steel major Posco (Pohang Iron and Steel Company), which is Asia's most profitable and the world's third largest steel-maker going by market value. The mood among the farmers is one of unease, posturing and defiance, while the Karnataka government appears extra keen to help Posco set up the plant.

Posco India Private Ltd. signed a memorandum of understanding (MoU) with the government to set up a finex steel plant with a capacity of six million tonnes per annum (6 mtpa) and a 400 megawatt (MW) captive power unit at the June 2010 Global Investors Meet (GIM).

Murugesh N. Nirani, Karnataka's Minister for Large and Medium Industries, who is spearheading the push for the project, told Frontline that he could not divulge its contents since it was a confidential document. The project is expected to create around 2,000 jobs.

The Karnataka Industrial Area Development Board (KIADB) was mandated to acquire the land identified in Halligudi, which is strategically located on NH-63 with access to the Guntakal-Hubli rail link. The KIADB has already issued a preliminary notification and served notices to 536 farmers in the village. Notices have also been served to farmers in two nearby villages of Shirur-Jantli and Mevundi, though this land is for other industrial projects.

Most farmers in the area say that the black cotton land, which is arable and rain-fed, is profitable to till and their lives are built around it. In some places they even grow two crops: onions, chilli and/or moong dal in the khariff season, and cotton, jowar and wheat in the rabi season.

However, after spending considerable time with the farmers, one comes away with the feeling that the resistance is unlikely to hold firm, what with government pressure, differences on how and what should be asked for and, more importantly, the lure of the Posco lucre. The price of land in the notified area and its surrounding villages Kavalur, Halikeri, Hariapur, Venkatapur, Timmapur and Bannikoppa is now being quoted at Rs.4.5 to 6 lakh an acre, up from Rs.1.2 lakh.

There are almost no landless labourers in the area. The 536 Halligudi farmers who have been served notices own medium-sized holdings ranging between three and 10 acres. Two hundred and sixty-two of these farmers have already filed objections, using photocopies of a form prepared by an ingenious agent/farmer. They have said in their objections that Posco is a good company and asked the government to implement the project, and then gone on to state that the lands to be acquired come under the command area of Singatalur Lift Irrigation scheme (the ungated concrete barrage is still under implementation) and hence will become green irrigated land.

This is followed by the demand that a compensation of Rs.30 lakh be paid for every acre. They have also demanded the waiver of registration and other fees when farmers who will give up their land buy alternative lands or properties, and jobs for their dependants in the steel mill.

Most farmers who met Frontline after submitting their demands sheepishly admitted that the high compensation they were seeking would never be paid. Maybe we will get half of what we are asking! said Y.S. Ramanahalli, whose family owns 56 acres. He is quite prepared to give away his land provided the price is right, since he finds it difficult to get labourers to work in his fields.

Somasekar V. Channalli, whose family stands to lose 30 acres, was busy writing down the names of fellow land losers when this correspondent met him. He said: We have formed a committee against this unjust acquisition. The Minister [Nirani] is wrong to say that this is land is not fertile. Our lives are tied to this land. And anyway the government never keeps its promises.

Farmers have also begun protesting against the land acquisition under the banner of the Mundargi Taluk Abhivruddhi Horata Vedike. Its president, Y.N. Goudar, said that it was unfair on the part of the government, which was the buyer, to fix the price of the lands. It has to be the seller who decides, he said.

Asks senior Congress leader and former Irrigation Minister H.K. Patel: Why is the government acquiring irrigable lands? What employment will Posco give? And what will the compensation be? On the one hand the BJP [Bharatiya Janata Party] government says that it is a friend of the farmer, on the other it is snatching away his land. Patel, who hails from nearby Hulkati (Gadag district), also felt that that the government was not considering the intrinsic value of the land it wanted to give away: Besides being part of the Singatalur command area, this land has huge potential for wind farming, with the average wind speed being 9.5 to 7 metres per second. But the government seems ignorant of this.

The government, however, expects the farmers to eventually realise the benefits of a big plant. Nirani said: We will try and convince the farmers. Seventy-five per cent of the land is not fertile.

However, recent newspaper reports said that Posco might relocate. Nirani told Frontline on June 6 that if the majority of the farmers at Halligudi were opposed to land acquisition, the government would not force them. I will try to convince them. But the government has an open mind. We will look at an alternative site for the project in Bagalkot and Bijapur districts. Farmers there are ready to give up their land, and anyway these districts, along with Gadag, had been shortlisted by Posco, he said.

However, both Bagalkot and Bijapur are in the Krishna basin command area and will be irrigated in the foreseeable future. Turning over to industry land that is about to be irrigated may not make much sense.

Nirani disclosed that farmers had recently been paid Rs.5.20 lakh an acre for semi dry land and Rs.7 lakh an acre for wet land in Bijapur when 3,000 acres was acquired for a National Thermal Power Corporation (NTPC) project.

Water woes

For Posco, the availability of water, despite the Karnataka government's oral assurance of providing 40 million litres a day, could be an added issue. It chose Halligudi as the site of its plant because of its relative proximity to the waters of the Tungabhadra, which is 100 kilometres away; it hoped that the government would allocate water from the river. But the government shot down the idea since there is no water to spare from the Tungabhadra reservoir, which is silted to the extent of 30 thousand million cubic (tmc) feet. The government has instead offered water from Almatti dam, about 150 km from Halligudi.

Drawing water from the Almatti, whose height has been a bone of contention among Karnataka, Maharashtra and Andhra Pradesh, might raise eyebrows. Nirani says that only the overflow from the dam and not stored water will be provided, but the dam overflows only for a month in a year.

Irrigation experts are of the view that the government could ask companies such as Posco to create additional pondage (storage) in the water spread area of reservoirs to the extent that these (reservoirs) have been silted up. But these ponds will perforce have to be created in the water spread area (not fertile command areas) since large tracts are required: 15 acres of land excavated to at least five metres depth is needed to store one million litres of water for an additional period of 180 days.

Nirani disclosed that industrial units like Posco would benefit from Karnataka's new water policy, which was recently cleared by the State Cabinet.

(This story was published in the print edition of Frontline magazine dated Jul 29, 2011.)

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