The Government may fix an upper cap on the land that can be acquired by SEZ developers.

This suggestion came up during a meeting held recently between the top government officials led by Commerce Secretary Gopal K. Pillai and CPM General Secretary Prakash Karat. "We are willing to consider the suggestion to put an upper cap on land acquisition by SEZs," said Pillai in an informal talk with reporters on Wednesday.

At present, the minimum size of the land that can be acquired for an SEZ is 1,000 acres. There is no upper limit.

The government is also considering equity for farmers whose land is being acquired to build SEZs. The Commerce Ministry has advised the state governments to consider the possibility to make farmers partners in the special purpose vehicles (SPVs) floated by companies to promote SEZs. This step will address the demand made by Agriculture Minister Sharad Pawar recently at Pune.

Various models to compensate the farmers operate in the states. According to a model being considered by the Maharashtra government, the farmer gets 25 per cent of the land cost upfront on acquisition while the remaining 75 per cent is treated as equity of the farmer in SPV. The state government determines the rate based on the projected value of the developed land.