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
Denne historien er fra 15 September 2017-utgaven av Farmer's Weekly.
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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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New farmers' seedling pitfalls
Inexperienced farmers may be tempted to grow seedlings from seed themselves, but they have much to gain by trusting a seedling grower at a nursery to perform this task for them instead
South African avocado production: a success story
Avocado production in South Africa has expanded markedly since the industry's humble beginnings over 80 years ago. From a small grove planted in 1938 in what was then Nelspruit, the industry has blossomed to seven million trees planted on 20 000ha. Dr Guy Witney, project manager at Great Brak Avos, spoke to Annelie Coleman about the country's avocado production.
Unlocking value through livestock exports
Exporting livestock might sound like a daunting business that's better left for big companies, but Gerrie Ferreira, who farms near Oudtshoorn in the Western Cape, has been doing it successfully for almost 30 years, sometimes in partnership with other breeders. He spoke to Glenneis Kriel about the huge potential this market holds, and offers some advice for farmers who are contemplating going this route.
An agribusiness's dedication to community upliftment
For agribusiness NWK, located in Lichtenburg, North West, corporate social investment is an important part of creating a positive influence alongside financial returns. Johan Bezuidenhout, NWK’s group manager of corporate marketing and communication, spoke to Annelie Coleman about why the company chooses to invest millions of rands in the area it operates in every year.
Empowering dreams, transforming lives
Since its launch in 2013, the Agri's Got Talent competition has revolutionised the lives of many farmworkers by unlocking their hidden talents and fostering a culture of empowerment. Glenneis Kriel spoke to various finalists about how the contest has changed their lives.
Foreign investment: agriculture maintains its appeal
South Africa remains a popular destination for foreign investors, despite an often negative outlook from its citizens. It is a gateway to Africa, and with its counterseasonal production to the Northern Hemisphere and favourable weather, local agriculture is especially well placed to attract foreign interest, bringing with it hope for rural communities
The real value and message of COP29 for SA agriculture
While the 2024 Conference of the Parties may have disappointed those who hoped for real progress, it's more important for South African agriculture to highlight its role in carbon mitigation
Improving efficiencies in feed and grain milling
Bühler, a Swiss-based company that provides solutions and equipment for various industries, including food and animal feed processing, has pledged that by 2025, it will deliver scalable solutions that will reduce energy, waste and water by 50% in the value chains of its customers.
Tips for better olive production
At an SA Olive Association field day in November, industry experts shared ways to improve olive production efficiencies, from soil preparation to harvesting.
More effort needed to protect vulnerable cheetah
On International Cheetah Day, commemorated every year on 4 December, emphasis was placed on the vulnerability of the species.
