Agriculture Valuation

Our company, ARVES Gayrimenkul Değerleme ve Danışmanlık A.Ş., has been authorized in the Real Estate Valuation field by the Capital Markets Board by virtue of the decree of 10.12.2012 and No. B.02.6.SPK.0.17.00-415.01 [ARVES-…]-566), and by the Banking Regulation and Supervision Agency by virtue of the decree of 10.04.2013 and No. 43890421-140-118-9264. As regards the authorizations specified above, our company carries out “Agriculture Valuation” in accordance with the Regulation on the Transfer of the Ownership of the Agricultural Lands as published in the Official Gazette of 31.12.2014 and No. 29222.

We provide professional service in the field of Agriculture Valuation together with our team consisting of Agricultural Engineer Real Estate Valuation Specialists.

Soil is considered as an important economic asset in the developed countries and is used in a planned way. Soil is used both in agriculture and in the industry as raw material. In terms of agriculture, it is used in forestry, livestock and cultivation of plants; while it is used as raw material of the products such as cement, brick, tile, glazed tile and ceramic in industry.

Agricultural activities can be carried out on 36% of the agricultural lands in Turkey. In addition, the variety of climate and soil has caused a large variety of crops. Our lands mostly have the nature of yard, garden and forest areas in the Black Sea Region, of industrial plant areas in the Aegean, of industrial plant areas and forests in the Mediterranean, of industrial plant areas and agricultural lands in Marmara, and of agricultural lands and pasture areas in the upcountry.

Agricultural Lands: Refer to the lands where the soil, topography and other ecological properties are suitable for the production of herbal, animal and aquaculture products, and are already used for this purpose or can be made suitable for the production of herbal, animal and aquaculture products through economic zoning, rehabilitation and restoration.

Agriculture: Refers to the process when people cultivate soil and grow various plants.

Agricultural Income Value: Refers to the value calculated by multiplying the annual average net income to be achieved from the agricultural lands with twenty years.

The scope of the agricultural property has substantially extended along with the modern agricultural enterprises. The agricultural enterprises make a whole with their lands, agricultural structures, planted crops and trees, animals, technical infrastructure, machinery and equipment, and the valuation operations are carried out by taking into account all the parts of this whole and the values of the intangible assets created by this whole.

The Regulation on the Transfer of the Ownership of the Agricultural Lands was published in the Official Gazette No. 29222 on December 31, 2014 with the aim of preventing fragmentation of the AGRICULTURAL LANDS of the national wealth through inheritance and sales. The regulation sets out the provisions related to transfer, handover through inheritance, valuation of the agricultural lands, and the size and economic integrity of the sufficient income lands as well as the procedures and principles regarding the determination of the qualifications of the competent heir.

In the Regulation on the Transfer of the Ownership of the Agricultural Lands as published in the Official Gazette of 31.12.2014 and No. 29222,

Valuation of the Agricultural Lands

ARTICLE 5 – (1) The income value of the agricultural lands is calculated on the basis of the annual average net income to be obtained if the land is operated under the optimum conditions, at the valuation date.

(2) The product prices and yields received by the farmer are taken into consideration in calculating the gross production values ​​for the production periods. The data of the Turkish Statistical Institute (TURKSTAT) are taken as basis for product prices obtained by the farmer. The calculation of the product pattern and yields is carried out on the basis of the last five-year records in the Ministry’s systems belonging to the land to be valuated or the other lands in the region having such features similar to these lands.

(3) The annual average annual gross production value obtained from the land is calculated by multiplying the product prices obtained by the farmer within the valuation year with the last five-year yield averages of the products. The annual average net income of the land is determined by reducing the average annual production costs for the dominant products grown in the region to be determined by the Provincial and District Directorates of the Ministry for the valuated production period from the annual average gross production value. The value generated by multiplying the annual average net income by twenty years is the income value of the agricultural lands.

(4) Objections to the agricultural income value are reevaluated based on the product pattern and yields in the lands, the product costs and the prices received by the farmer used in the calculation. The records in the Ministry and TURKSTAT systems are taken as basis for the future objections regarding the product pattern, costs and the prices obtained by the farmer.

The minimum issues included in the valuation reports that we have prepared for the immovables with the nature of lands are;

If Production is Performed in the Garden, information on the following issues is provided;

  • Agricultural production,   

  • Nature of the soil,

  • Topographic condition,

  • Number, age, type, production form of trees in the relevant land,   

  • Irrigation sources, Irrigation system (sprinkler, drip irrigation, etc.),

  • Information on access to the garden,

  • Electricity etc. possibilities.  

If Production is Performed on the Field, information on the following issues is provided;

  • Information on the agricultural product on the field (information on the already planted product or whether or not planting is performed),

  • Aqueous or dry production,  

  • If aqueous production is performed, information on the source of water (irrigation cooperative, well, river etc.)

  • If more than one product is grown on the field, each production area (decare),

  • Information on access to the field,

  • Information on other products grown on the neighboring fields,

  • Electricity etc. possibilities.  

If Production is Performed in the Greenhouse, information on the following issues is provided;

  • Agricultural product should be specified (tomatoes, pepper etc.) (information on the already planted product or whether or not planting is performed),

  • Production form (with or without soil),

  • Greenhouse production area on the relevant field (decare or m²),

  • Heat, water supply form of the greenhouse,

  • Size and type of the greenhouse (glass, plastic etc.),

  • Information on access to the greenhouse.

 

In general, in agriculture valuation, the value is estimated and appreciated taking into account all criteria affecting the value such as;

  • Whether or not the immovable is close to the city/town,

  • Population of the closest province/district or the excess or scarcity of the population density,

  • Whether or not the immovable property is close to the transport facilities (dam lake area, railway, seaway, airway),

  • Presence of good or poor health conditions around the immovable,

  • The presence or absence of market facilities,

  • If there is a building on the immovable, whether or not it is well maintained,

  • Whether the land is composed of a single part or multiple parts,

  • Whether the shape of the soil is smooth or deformed,

  • Whether or not there is any problem in terms of property security in the region,

  • That the land can be bought and sold freely for agricultural and non-agricultural purposes in the region or that the trading opportunities are very limited,

  • Whether or not the landowner and the employees have the life safety,

  • Whether or not the cadastral work has been performed in the area of the land,

  • Whether or not it is possible to easily change the alternation system,

  • If the land can be irrigated, whether or not there is irrigation possibility,

  • Whether or not the real estate is close to the tourism facilities, industrial enterprises and sea, lake and river banks.