Socioeconomic determinants of farmland value in India

Developing countries have achieved remarkable overall economic diversification and growth during the last few decades, but farmland has remained a prime pillar of the livelihood support system of resource poor people in the rural areas of these countries. For these people, land is still the most important resource as it has multiple utilities such as a symbol of social standing, collateral value and a reserve capital asset for emergencies. Agricultural land assumes different values for different owners. This study establishes the criticality of age, education level, size of family workforce, dependency on agricultural income, productivity of land and location of farmland in influencing perception of value of farmland. Ignoring these factors creates a gap in the value of farmland as perceived by the farmland owner and the government. Knowledge of these factors may help in making appropriate adjustments in government declared prices of farmland for determining appropriate land compensation rate for a specific location.