King Country Chronicle Tuesday, January 16, 1923. INFLATED LAND VALUES.

King Country Chronicle, Volume XVIII, Issue 1776, 16 January 1923, Page 4

King Country Chronicle Tuesday, January 16, 1923. INFLATED LAND VALUES.

The question of arriving at a system of a proper valuation of agricultural land is one that should absorb the attention of all business people as well as the farmer. At present this is done in a very haphazard manner, which is not for the good of the country and has been the cause of many disappointments and failures amongst the farming community. If a man is buying a trading concern, and has keen business instincts, his first plan is to find out what that business is going to bring in to him by way of revenue; by this means, he is able to form his own ideas of what he is going to pay for it. He does not listen to what the!" seller may tell him of what another man paid for a similar business. In the case of farmers many are prone to listen to what was paid for an adjoining property, and this may influence him very largely in the price he will eventually pay.

In this district, which is mainly devoted to dairying and sheep farming, it should be an easy matter to base the value of the land from a purely business point of view, whether such land is being valued for selling or taxation purposes. Where ,the land is to be used for dairying, the owner or purchaser must satisfy himself as to how many cows can be carried to the acre. He should then make himself conversant with what amount of butter-fat he will receive from each. If he makes a fairly conservative estimate of the price of butter-fat, for it is a commodity which is liable to fluctuations, there is no difficulty in arriving at the net returns that may be received from any property. Exactly the same procedure should apply to the sheep farmer.

After having done this, the farmer will then find out what his expenses are in the way of interest, upkeep, labour and Other incidental expenses towards running his property. He will then be enabled to find out what the value of the place is from a business point of view.

Nothwithstanding the slump, many properties are being valued at prices Very little below those prevailing during the boom period. This state of things cannot continue, for the boom is over, never to return, and the sooner this fact is realised the better it will be for all. The revenue that can be derived from the land is the only way of arriving at its value. Land values in this Dominion are on a higher basis than those prevailing in any part of the world, with the exception perhaps of Denmark. The latter country, however, has the advantages of being close to the world's markets, has cheaper labour, and the people go in for close cultivation.

While there is no call for pessimism for the future, any undue optimism will not be conducive to the country's welfare. - The outlook is decidedly bright but at the same time, farming in all its branches is to be this country's source of wealth for many years to come. For this reason it must be treated in a businesslike manner. There is no longer a field open for speculators in this direction, but we should pave the way for sound and solid business — and this can only be done by using commonsense methods.