If this method is so simple, why hasn’t it been tried already? Well, it has — it just hasn’t been spoken about, as most private firms don’t want to talk about their land acquisition strategy. It’s said that Disney used options to acquire most of the land they needed for their theme park at Anaheim, California. Disney saved a fortune in legal fees by using this method. What works in the United States may not necessarily work in India, but I have anecdotal evidence that Larsen and Toubro, in the construction of the third Howrah bridge in West Bengal, offered such a good deal in Dakshineshwar, that neighbouring land owners requested L&T to consider buying their land too.

There are some legitimate challenges to this solution, especially in places like West Bengal where the business climate is highly interventionist, with entrepreneurs unable to operate without the blessings of the local politicians. But the government needs to realise that it cannot replace coercive prevention of industry by coercive adoption of it — it needs to shrink to a minimal form of government. Using the options system is far less coercive, while at the same time providing industry and farmers with that rarest of commodities —informed choice.

The writer is doing a PhD in decision and risk analysis, Stanford University