A generalized method for valuing agricultural farms under uncertainty

García, Celia Prados; García, José García; López, María Mercedes Cuevas; Gómez, Rafael Briones

doi:10.1016/j.landusepol.2017.04.008

Cited by 6 publications

(8 citation statements)

References 13 publications

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“…Following this approach, Baker et al (2014) used the beta coefficient estimated with CAPM to assess farmland value by comparison with market returns. Garcia et al (2017) developed a methodology that is particularly applicable to the valuation of nonmarket goods, or markets where little information is available, as may be the case with the valuation of agricultural land. Burt (1986) used the fundamental method that consists in discounting cash flows to estimate the value.…”

Section: Methods To Assess Farm Valuementioning

confidence: 99%

“…One of the major challenges is to assess farm value in a context where the market for farms is opaque. According to Garcia et al (2017, p. 121), “ the opacity of the farm market means that valuations are based primarily on expert estimates rather than on actual transaction prices .” The farm market may even not exist. Even if they are subject to sales and acquisitions, businesses in general and farms in particular are too heterogeneous and the terms of the transactions too disparate for these transactions to constitute a market.…”

Section: Introductionmentioning

confidence: 99%

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Farm valuation: A comparison of methods for French farms

et al. 2022

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Farm transfer is increasingly seen as fundamental to the development of agriculture. One of the major challenges is to assess farm value in the context of an opaque market for farms. We contribute to the scarce literature on farm valuation by empirically applying three valuation methods to the Farm Accountancy Data Network database for France in 2017 and 2018 and for five types of farming. The three methods-the fundamental method, the patrimonial method, and the financial method-are well known for the valuation of companies, but have yet to be implemented widely for farms in the empirical literature. The results show that wine-growing farms have the highest values on average. Pig and beef farms have high average patrimonial values, reflecting their high capital intensity, but beef farms have the lowest average values calculated with methods based on cash flows, revealing unfavorable market conditions for these farms. The results further reveal that total farm output drives the value upward, but that high farm labor, indebtedness, and age contribute to reducing value. Our findings also highlight that, in practice, the differences in values across methods may be substantial.

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Section: Methods To Assess Farm Valuementioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Farm valuation: A comparison of methods for French farms

et al. 2022

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“…This article assumes that automated valuation models (AVM) can provide significant support, accounting for most of the above‐mentioned expectations (Codosero Rodas et al, 2018; Demetriou, 2016; García, García, López, & Salmerón, 2017; McCluskey, McCord, Davis, Haran, & McIlhatton, 2013; Renigier‐Biłozor, Janowski, & d'Amato, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

“…• Increased objectivity for the owners, low cost, ensuring transparency of the valuation procedure (Codosero Rodas, Naranjo Gómez, Castanho, & Cabezas, 2018); This article assumes that automated valuation models (AVM) can provide significant support, accounting for most of the abovementioned expectations (Codosero Rodas et al, 2018;Demetriou, 2016;García, García, López, & Salmerón, 2017;McCluskey, McCord, Davis, Haran, & McIlhatton, 2013;Renigier-Biłozor, Janowski, & d'Amato, 2019).…”

Section: Literature Reviewmentioning

confidence: 99%

Fuzzy logic method of valuation supporting sustainable development of the agricultural land market

Źróbek

Kovalyshyn

Renigier‐Biłozor

et al. 2020

Sustainable Development

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This article proposes the possibility of applying fuzzy logic theory to perform the tasks of determining the market value of agricultural lands. These tasks are of a multi-criteria character, as multiple factors are taken into consideration during the land value valuation process. The market value of agricultural land plots, calculated using fuzzy logic methods, can provide a basis for further use in the processes that are directly related to their turnover, that is, during auctioning, setting of a land tax, determining of the value of pawn in the land bank. Methodic approach to the determination of the market value of agricultural lands with the application of the methods of fuzzy logic and the package Fuzzy Logic Toolbox of the computing system Matlab is universal. It can be used for assessment of the value of a land plot with any number of indices, having no crisp mathematic model. The proposed method is particularly useful for countries where the agricultural real estate market is still in its early stages of development and will contribute to making it more transparent and thus it can be a significant tool supporting the sustainable development of the agricultural real estate market. Agricultural land market is a vital ingredient of the system for sustainable development of rural areas.

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“…The most commonly used variable for measuring agrarian income is the area of the land being valued (Cañas et al, 1994;Caballer and Guadalajara, 2005). The analysis of the income from agricultural land also normally involves the valuation of other variables such as economic yield, the quality of the land, the risk of frost and the location (Aznar and Guijarro, 2004;García et al, 2017), which although they influence the profitability of the land are not the only factors affecting it. Other factors that directly affect the profitability of the land and therefore its real estate value are often ignored.…”

Section: Introductionmentioning

confidence: 99%

Impact of parcel fragmentation on the calculation of the real estate value of land belonging to farms

2021

New Medit

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Agricultural parcels are often the subject of land valuation studies. This approach implicitly assumes that the real estate value of the land belonging to a farm is the sum of the values of the individual parcels that make up the farm. Nonetheless, the value of a whole can be very different from the sum of its parts. This study proposes a methodology for calculating the real estate value of the land belonging to a farm, by including parameters relating to the fragmentation of the land. Fragmentation increases production costs and reduces farmers’ incomes and by extension the real estate value of the farm. In our study area, the province of Jaen in Spain, figures for its most emblematic crop, the olive, show that fragmentation of the land reduces its value by between 51% for a 10 ha farm and 12% for a 30 ha farm as compared to the values set out in the bibliography. The reorganization of the ownership system or the promotion of systems for the common management of land could increase the profitability and therefore the value of land according to the ‘income capitalization’ approach.

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A generalized method for valuing agricultural farms under uncertainty

Cited by 6 publications

References 13 publications

Farm valuation: A comparison of methods for French farms

Farm valuation: A comparison of methods for French farms

Fuzzy logic method of valuation supporting sustainable development of the agricultural land market

Impact of parcel fragmentation on the calculation of the real estate value of land belonging to farms

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