Here’s a small thread connected to nothing in particular but it relates to the impact that some legislation has on farms.
Meaning – the farm value and farm productivity or profits.
It’s been simplified, so agricultural brethren, please stay calm.
In many instances, farm values are dependent upon a whole range of things: soil quality, rainfall, location to transport, etc.
There are mountains of information about how farming land is valued
But essentially, the banks and financial institutions value land on its productivity. How much per hectare can that land produce?
And they don’t care what is produced, just that there is a $ amount per hectare to measure against.
So you can farm goats, trees, carbon farm, grow mangoes, whatever.
However, when you have restrictions placed on that land by legislation or regulations, then it becomes a burden.
It might be paperwork burden or it may mean the burden is financial.
So essentially, if I had a section of rare trees or grasses on my land and I could not farm that section of land productively, or how I wanted to, that’s a burden.
That sort of restriction eats into your profits – and your farmland value too.
Because remember, banks, etc… value land on its production capacity.
They tend not to get too fuzzy about a lovely 500 hectare spread of native grasses that don’t produce anything.
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Unless of course, you’re receiving compensation in some form for it. It’s all about the $.
It can get extremely complicated, however, the overall point is there is no question that “improved” land (meaning cleared land) is overall more valuable financially than remnant or native vegetation.
Your land value goes up if you can clear it. In an agricultural sense anyway.
So if you had for example 10,000 hectares and say 10% of that 10,000 hectares was affected by some sort of sudden legislation or regulation, you would find your land value would drop (sometimes quite significantly) and it would affect your profits too.
So this is where the environment and agriculture meet and clash.
Because if I own 10,000 hectares and suddenly my land value drops or I’m restricted with what I can do with it or I have to get an agronomist (ag scientist) every time I want to do something, that’s a huge impact.
It’s a huge impact in terms of time and money and a general hindrance to the running of my business – not to mention the profits and land value.
So what do we as a society do about it?
If you owned huge amounts of farm land affected in this way – what would you do about it?
Please bear in mind this thread has nothing to do with anything at all and has no connection to anything. It’s merely just put here for general information.
By Ronni Salt