Methods of establishing the fair value of agricultural land by comparative approach

Issue № 7, 2019, article № 1, pages 2-20

Section: Questions of methodology of economic research

Language: Russian

Original language title: МЕТОДИКА УСТАНОВЛЕНИЯ СПРАВЕДЛИВОЙ СТОИМОСТИ ЗЕМЕЛЬНЫХ УЧАСТКОВ СЕЛЬСКОХОЗЯЙСТВЕННОГО НАЗНАЧЕНИЯ СРАВНИТЕЛЬНЫМ ПОДХОДОМ

Keywords: AGRICULTURAL LAND, AGRICULTURAL LAND MARKET, FAIR VALUE, CADASTRAL VALUE, MARKET VALUE, FAIR VALUE ESTIMATION, MARKET VALUATION, AGRICULTURAL LAND VALUATION, BONITET FARMLAND.

Abstract: The paper deals with the problems of establishing the fair value of agricultural land. The analysis of indicators of cadastral value as an analogue of calculating the value of a land plot by the method of capitalization of land rent is given, which shows that the results of the cadastral valuation are practically incompatible with the prevailing market prices of offers and transactions with land. The authors presented a methodology developed to establish a fair value for agricultural land, which for more than five years has been tested by the audit and consulting company BEFL. The results obtained confirmed that the results of agricultural land valuations can be used both when planning investments in agribusiness and for making transactions with specific land assets. This method allows you to: get a reasonable amount of value regardless of the actual management of land as a factor of production; to form a single integrated opinion on the state of the land market in several regions and federal districts; taking into account the large territorial division of active agricultural production areas to industry analysts, lending banks, private and institutional investors - to form a common understanding of land investments, repayment of capital and profitability of agribusiness.

Authors: Paptsov Andrei Gennadevich, Novoselov Eduard Arkadevich, Istratov Evgenii Anatolevich, Avarskii Nabi Dalgatovich