To solve its dispute with farmers, the Starmer government should look to India

As Labour looks to give councils greater powers to buy up agricultural land at below market value, Chris Blackhurst says it should consider offering the same resettlement benefits afforded to Indian farmers

India is not a country usually associated with the fair distribution of wealth – but even there, the government has displayed a determination to do right by its citizens. Which is not something that can be said of Sir Keir Starmer’s administration.

When land is compulsorily purchased in India, the price paid is typically a multiple of the market value. But in the UK, the new Planning and Infrastructure Bill gives councils powers to buy property at its current value, ignoring the present system that bases the price on what the site would be worth once it is developed.

Compulsory purchase forms a central plank in Starmer’s avowed intention to “push past the Nimbyism”, to overrule the “blockers” and build homes, hospitals, schools and nuclear power stations. Even at the press conference for her spring statement, Rachel Reeves took a swipe at the “bats and newts” holding up construction work. It’s been a constant refrain as the chancellor drives forward with her economic growth agenda to bulldoze any obstacles in its path.

This includes obtaining the land itself. Labour will sanction the compulsory purchase of the property. But in a twist, the developers only have to pay a fraction of its potential value. Already, farmers, who are bound to find their fields at risk, are readying to protest. For them, the plans are seen as yet another attack on their livelihoods from this government, after the Budget’s inheritance tax reforms and the closure of the Sustainable Farming Incentive or “green subsidy” scheme.

Tim Bonner of the Countryside Alliance said: “We have been supportive of many of the government’s changes to planning policy, but giving councils more power to reduce the value of land is a step too far, especially in the context of such a challenging outlook for farmers and the inheritance tax fiasco.”

He added: “This is not about people blocking development, it’s about the state paying the market price for land. We need more houses and more economic development, but not at the cost of basic principles.”

Those ideals extend to India, as billionaire investor Cyrus Vandrevala – who has invested in more than 60 million square feet of building projects worldwide – explains. “The idea of landowners being undercut and seeing forced purchase at a shockingly low price by the UK government is the opposite of what happens in India,” he says. “There, they actually overpay, to give generous compensation and also to make sure the land is developed – the government only spends when it is certain the property is needed and is of public value.”

Vandrevala and his family, who also invest in affordable and assisted living in the UK, have been involved in business and residential developments in India, catering mostly to the rising middle class and young professionals. Named Global Investor of the Year in the Asian Business Awards, he believes that opportunity and wealth for all join and accelerate when government aids the landowner, the investor and the taxpayer.

Under India’s Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, the government is required to pay a market multiple for the land. It must also provide rehabilitation and resettlement benefits. The percentage of the premium is not specified in the law, and the multiple can vary depending on the location and type of land.

In some cases, the government has paid significant premiums for land acquisition. For example, the Yamuna Expressway project paid around US$500m for land, which translated to over $25,000 per acre. This was significantly higher than the then average farmland values elsewhere in India and in countries like France, which was averaging $2,430 per acre and the US at $2,140 per acre. However, it reflected the fact that for many farmers, the land was all they had, and they wanted to protect their finances and those of future generations.

While the UK countryside does not suffer from anything like the same degree of hardship, the rural economy is struggling, and suitable housing and jobs can be hard to find. Same as in India: for many farmers, the land is their main asset and security. Once it’s gone, it’s gone, and therefore, they argue, they should be properly compensated – not just for them but for their children

If Starmer and co thought they had seen the worst of the tractor demonstrations, more are heading their way.