Samuel Johnson is quoted as saying, “Agriculture not only gives riches to a nation, but the only riches she can call her own.”

We South Africans fully appreciate the value of our agricultural land. While manufacture and other important industry sectors factor in the nation’s economic future, it’s agriculture that feeds the mouths of our people.

Whether you are a seasoned farmer or looking to enter the field of agriculture there are key factors to consider when buying a farm.

As professional property valuators, we advise our clients on the importance of location. How does this affect an agricultural valuation?

Agricultural Property Resources

When considering the value of a farm, it will almost always be from a business perspective: What activities can be undertaken on this property to make it financially viable?

The property that you are considering will have a unique combination of resources and assets such as:

  • Water
  • Carrying capacity
  • Buildings, plant and machinery
  • Current and pending produce

Agricultural Property Restrictions and Considerations

Other key elements to consider when buying agricultural property are factors which are entirely out of your hands. For example, what rights exist on the land in terms of water usage, mineral rights and land claims? What is the proximity to a local township or informal settlement? What safety elements will affect the growing and transport of your produce.

Key factors would include:

  • Climate
  • Terrain
  • Distance to market
  • Pests
  • Local industrial development, notably mining.
  • Local safety & security issues
  • Government policy and political issues surrounding and land

Indeed, entering into the agricultural property field is not for the faint of heart, and should be done so with as much information as possible.

Nico Coetzer, attorney, auctioneer and professional valuer in the Free State commented on additional pieces to the agricultural valuation puzzle. In his comments in Famers Weekly he recommends that “arable land be valued by a registered appraiser, and that the farm’s potential be evaluated by an agricultural economist supported by grid-mapping and soil analysis, among others. A chemical analysis of the soil condition is also important. Issues such as location and proximity to markets as well as rainfall and infrastructure should also be considered.”

If you are considering the purchase of a farm, or you if you are in the agricultural sector and need a fair and accurate valuation of your property, we encourage you to get in touch. Contact us on 0860 999 440.