Farm values depend on multiple variables and the decision to invest in farmland is determined, in part, by the prevailing political and policy environment.
It is well-known that the value of farmland in South Africa has increased substantially over the past decade. Arable land acquired for R6 000/ ha in 2001 sold for R50 000/ha in 2013, and as much as R70 000/ ha in 2015. Over the same period, the cost of grazing land increased from about R800/ha to R5 000/ha or more. As an example, the appreciation in land values in the Eastern Cape between 2002 and 2016 is indicated in Table 1.
On average, the value of agricultural land has increased tenfold over the past 15 years. Is therefore pertinent to ask whether farmland in South Africa is currently overvalued.
There is no straight or simple answer to this question. Land value is a complex issue that depends on a number of variables. These include soil potential; the availability, rights and status of water; location and proximity to markets; the available infrastructure and its condition; and the status of current farmworkers with regard to permanent tenancy.
Most farmers will be willing to pay a premium for land that adjoins their existing land holdings. Valuers will also consider several other factors when valuing farmland for loan applications, and these may not correspond with the buyer’s perceived value of the land.
A USEFUL BAROMETER OF THE AGRI ECONOMY
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Denne historien er fra 15 September 2017-utgaven av Farmer's Weekly.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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Syngenta Seedcare celebrates a decade of innovation
Syngenta's ambition is to enable their customers' investments to grow in healthy soil from treated seeds to young plants through innovation and collaboration, writes Magda du Toit.
Agri workers shine at Western Cape awards
Lindie-Alet van Staden, a garden and olive orchard manager at L’Ormarins Wine Estate in Franschhoek, was crowned as the Western Cape Prestige Agri-Worker of 2024 at a gala event recently held near Paarl.
Small and large farmers recognised at grain awards
The annual Grain SA/Syngenta awards ceremony bears testimony to the quality of farmers in the grain industry.
Growing partnerships: Fedgroup's flexible and innovative approach
Janine Ryan spoke to Warren Winchester, general manager of impact investing at Fedgroup, about why the company became involved in agriculture, and what it offers farmers and their immediate communities.
Why fish farms fail, and how to avoid becoming a statistic
The popularity of launching fish farms is not matched by their success. Leslie Ter Morshuizen, owner of Aquaculture Solutions, explores the factors that cause most of these businesses to go under.
Where history and modernity meet in a luxurious setting
Brian Berkman kept his eyes peeled for ghosts in the oldest continuously run hotel in South Africa, but all he found was a fabulous two-night stay.
THE HITCHING POST
I'm a stylish elderly lady with a radiant glow and a good sense of humour that keeps me young at heart.
Cutworms: check the weeds on your fields!
Zunel van Eeden explains why understanding the ecological interplay between cutworms and weeds is crucial for effective pest management. Producers should disrupt the life cycle of cutworms to minimise crop damage.
Does high-density grazing mimic grazing patterns of game?
In their paper on high-density grazing in Southern Africa, professors Angelinus Franke and Elmarie Kotzé from the Department of Soil, Crop and Climate Sciences at the University of the Free State say high-density grazing systems may not accurately reflect natural ecosystems. Roelof Bezuidenhout reports.
Global grain outlook: 2024/25 marketing season
In its latest summer crops report, the Crop Estimates Committee says South African farmers intend to plant 4,47 million hectares of summer grains and oilseeds in the 2024/25 season, up 1% from the previous season. As South Africa exports maize and soya bean, Annelie Coleman reports on the latest trends in the international grain and oilseed markets, amid fluctuations in weather conditions and ongoing armed conflicts.
