Strong land governance systems and secure land tenure (i.e., the assurance that the owner’s rights to the land will be recognised, protected, and enforced if challenged by others) help the owners make long-term investments in land and agriculture, and decide to retain or sell their land and alternatively in the case of investors who want to use their land, they might transfer their land rights.
But when the land governance systems are conflicting, or the tenure is insecure, it can lead to a decreased sustainability of land use and create a bigger likelihood of the violation of legal land rights as other land investors make their move. Though the government has set up a varied range of guidelines and principles to address the issue of responsible land investment, there is still a long way to go with respect to adherence to both land and human rights, environmental sustainability to ensure benefits of returns instead of conflict. These issues seem even more difficult when the legacy aspect is considered. These must be addressed directly after investments have been made or with operations still ongoing.
“Information about these types of investments still largely remain inaccessible to the general public, even though the transparency of it is gradually increasing. This limits their understanding of implications and the impeding accountability, which in turn is a violation of their rights.”
There is also the question of the type of returns coming in. The returns are higher in emerging and developing areas, where there is a possibility of upcoming infrastructure projects, such as a special economic zone or a highway.
Chances are that such a piece of land will fetch a higher value, in future, he adds. Moreover, the compensation, in the case of acquisition by the government, is higher for rural land than that for urban land. A number of state governments are also planning a land pooling policy, for areas where the city is expanding. If you become an owner under the land pooling policy, you will get guaranteed regular returns from the pool.
As is true of all land-related developments, your asset does not depreciate with time – something that cannot be said about property such as flats, apartments, etc. With time, the quality of the building structure deteriorates and the owner has to spend substantial amounts of money to maintain it.
“Investing in agricultural land, not only saves you from spending all that money but also leaves you with an option to use the land for varying purposes in future, within the boundaries of the law.”