After Jagatsinghpur in Orissa, Gadag in Karnataka could be the new flashpoint for Posco in India.

Farmers in Halligudi village of the north Karnataka district, close to the Bellary-Hospet iron ore belt, are said to be preparing for a confrontation with the State Government over its move to acquire 3,382 acres for the Korean steel giant.

Posco India Pvt Ltd had, in June 2010, signed an MoU with the Karnataka Government for setting up a six million tonne per annum (mtpa) steel plant and a 400 MW captive power unit at an investment of Rs 32,300 crore. It had asked the State to provide for the required land, which was initially assessed at 5,000 acres before being scaled down to 3,382 acres.

The Karnataka Industrial Area Development Board (KIADB) was mandated to acquire the land identified in Halligudi, which is strategically located on National Highway-63 with access to the Guntakal-Hubli rail link.

KIADB has already issued a preliminary notification and served notices to 536 farmers in the village having a population of 5,000. Notices have also been served to farmers in two nearby villages of Shirur-Jantli and Mevundi, though this land is for other industrial projects.

However, the landowners in these three villages are not keen on selling out and have formed an alliance against the acquisition. As many as 275 farmers of Halligudi have already filed their objections with the KIADB and also submitted two memorandums to the Gadag District Collector. Their cause has also found the backing of the pontiffs of two influential local religious institutions (mutts).

“There's no way to give up that easily. We are going to fight it out,” said Mr S.S. Bevoor, a farmer, who says he would lose 17 acres. Farmers in this rainfed black soil region mainly grow jowar, wheat, bengal gram, green gram, onion and cotton.

“We were till now waiting for the already sanctioned Huligudda-Singatalur lift irrigation project to irrigate our fields. And now all of a sudden, from nowhere, this project has cropped up, threatening to take our livelihoods,” said Mr Siddappa Mudlapur, whose 12 acres fall in the notified area.

The KIADB is scheduled to hear objections to the proposed land acquisition from July 4 at its office in Dharwad, which is about 100 km from Halligudi.

The Karnataka Industries Minister, Mr Murgesh Nirani, was, however, hopeful that the land acquisition will be “smooth” as had been in the case of ArcelorMittal's steel project near Bellary for which the KIADB had only recently acquired about 3,000 acres.

“We are in the process of acquiring one lakh acres for various industrial projects with the farmers' consent. Final notification has been issued for 36,000 acres. Farmers are not opposed to giving up land; what they are seeking is higher compensation,” he claimed. The Korean company, he added, had deposited Rs 120 crore towards initial land acquisition costs and would pay more once the compensation to be paid to farmers was finalised. Posco officials were not available for comment.

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