How can we differentiate between natural factors and other economic factors that determine the price of lands? there are a plenty of factors that determine land price not in cities. it seems difficult to distinguish them or measure the effects of variables. I want to know some methodologies to find and measure these natural factors without including human factors such as distance to facilities or urban areas.
To add to what Deepak has said, it also depend on what the land is demanded for. e.g. if cocoa cultivation is most favorable in the location and there is more demand for that same land, expect the price to go up. How do you measure this? you can use Cost Benefit Analysis with "SCP" (structural, Conduct and Performance Approach).
Today the main factor in farmland prices are the farm's productivity and how much the people bidding against you are wiling to spend.
Right now in the USA low interest rates and lenders hunger for someone with good credit willing to borrow money competing with those with cash looking for some place they hope inflation won't devour it are pushing up the price of farm land in Oklahoma well past the break even point.
I also see some money moving from more conventional investment into farm land. The situation on farmland is not a lot different for farm lane than the 1970 other than there are fewer player on the field. Only this time its the fear of the short burst of inflation and higher interest rate yet to come not the inflation that had been and and the fear of more at decent interest rate as it was in the 1970's.
Best Wishes
Gordon
location, richness of soil accessbility, water sustain capacity, water availability, slop rainfall climate etc are the major natural factors influencing farm land
All this is correct: soil, water access, climate. But there is also an interaction with urban land price wen farm is on the border. Many of those land parcels have higher value than maximal possible sun of future agricultural revenue simply because of opportunity to sell this land for construction in future. New infrastructure projects can also upgrade the value of land because of closer access to markets.
Dear Mohammad, there are some factors which affect the prices, for instance: location and climate. Also, we can add water access and land fertility.
Since you are talking of natural factors, it will be depth of top soil, undulation and drainage, rainfall in the region & water availability, quality of water, wind speeds and erosion on account of that, natural vegetation in surrounding areas and local flora & fauna.
Location of the land, distance from urban centres, accessibility, drainage and present land use are also factors. If it is farmland that is under cultivation, it has a premium over fallow lands.
One additional realm to tap is of LAND EXPROPRIATION (also called compulsory purchase, compulsory acquisition or, in the USA, eminent domain). In some legal systems - many - the law allows compensation to be paid only for the land and its agricultural use and potential, not for any expectations for conversion to urban use, or expectations of higher prices due to proximity to major highways etc. Land appraisers (values) have developed sophisticated methods for count out the urban-kind of influenced. Try to tap such knowledge by interviewing several land appraisers with expertise in farmland valuations.
if it is farmland that is under cultivation, then irrigation, horticulture crop, cash crops, annual income of the farmer and off course distance from metropolitan cities are the factors
Most key natural factor is population growth as developers and farmers will be demanding for same piece of land for construction and farming respectively.
Water availability and quality, soil type, soil salinity, drainage, topography, location and how far to city or markets, rainfall, temperature, and depth to groundwater.
“Water availability and quality, firtility of soiland its type, soil salinity, drainage, location and how far to city or markets, rainfall, temperature, and pest distrebution.
There is a new factor to take into account: increasing awareness of the desirability of "nature based solutions" instead of traditional engineering-based drainage and flood controls. This means that farmland (and farmers) will increasingly be asked, or required by law or planning regulations, to allow part or all of their farmland to be temporarily swamped for water retention in many ways. this is an in-between category of "man-made" and "natural" and will imply a change or restrictions in "natural" farming. These new strategies will gradually transform the demarcation line you have asked about - between "economic factors" and "natural factors".
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