This paper is motivated by the natural and institutional characteristics of land valuation for the lawful acquisition for public projects. A model to arrive at the valuation of rural farm land is desirable when there does not exist crop insurance for the displaced farmers and villagers. The factors of the natural environment could be the impact of relief or soil fertility on associated farm or non-farm income from land. However, the environmental implications of converting arable land to mining factories are innumerable and irreversible. Using rural land commission data of claims over 631 cases of rural households for over 52 displaced villages in Sundargarh District of India, we compare the loss of value accrued to farmers against suitable expected market prices. We conclude that the villagers were compensated to the tune of INR 267,870 (USD 5,745) per case against their expected life earnings of INR 799,319 (USD 17,144) per case. The cumulative compensation received for total area of 2,112.5 acres (855 ha) amounted to only INR 169,026,176 (USD 3,625,413) as against the expected NPV of earnings of INR 504,370,184 (USD 10,818,148).
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