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TN – Agriculture vs Industry, should industry lose?

Recently Haldia Petrochemicals Ltd, West Bengal has offered to construct a petrochemical plant in Cuddalore at an investment of around Rs 50,000 crore. Chief Minister E K Palaniswami has assured the representatives of the company that permission for the plant would be expedited. This, coupled with infrastructural improvements in chemical clusters like common effluent treatment plants, pipeline corridors and desalination plants in the coastal areas, will stimulate a more rapid growth of the chemical industry in the state.

Years ago the Nagapattinam-Cuddalore corridor was designated as a Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR). With the Chennai Petroleum Corporation Ltd planning to set up a 15 million tonne oil refinery at Nagapattinam, there is a huge opportunity to develop the corridor as a thriving petrochemical complex.

Tamil Nadu has excelled in textiles, leather, cement, automobile and auto components and IT industries. But its share of the high growth chemical/petrochemical sector is just six per cent of the nation’s.

The recent statement of the Chief Minister that the eight Cauvery delta districts from Nagapattinam to Cuddalore would be declared a protected agriculture zone where setting up of  new projects on hydrocarbon will not be granted permission is a bit confusing.

In recent years, the state has witnessed several massive protests in the delta region, including opposition to the coal-bed methane exploration project, the Neduvasal hydrocarbon extraction programme, the ONGC’s oil exploration at Kathiramangalam, the permit granted to Vedanta group for hydrocarbon extraction in Nagapattinam…Already the Paattali Makkal Katchi, a member of the AIADMK alliance is opposing the HPL proposal.

With elections to the state assembly due next year, political parties have been keen to win the support of the large constituency of farmers. But the contribution of agriculture to the state’s GDP is just around 8 per cent and is falling. The state lacks in natural resources and in water, but excels in the services and industrial sectors. It would do well to diversify and expand the industrial sector.

The state should look at the benefits to the farmer in terms of deriving the best returns from his landholdings. The average return from full utilisation of the land through multi cropping of paddy, the main food crop of the delta region, is around Rs 50,000 per acre or around Rs 4000 p.m. The possibility of revenue from taking oil or gas out of this land should run into a few lakh rupees. The land owner and the state should work to get a fair share of the revenue from oil or gas.

Such sharing has revolutionised the status of the USA from a large importer of oil and gas, not just to become self-sufficient, but emerging an exporter of the huge surpluses generated.

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