LAND VALUATION

Taranaki Daily News, 23 February 1935, Page 8

LAND VALUATION

1 UNSOUND SYSTEM MOOTED, s —. r CHAMBER OF COMMERCE VIEWS, j n A suggestion that statutory recognition is to be given to an unsound basis of 2 valuation is contained in. the Govern- "> ment proposals for the rehabilitation of farmers’ finance as outlined in the 2 pamphlet by the Minister of Finance, 2 says a statement by the Associated 1 Chambers of Commerce of New Zealand. 6 The pamphlet states that under “stay f orders” farm properties will be con--0 trolled for five years, after which a valuation will be made for the purpose t of ascertaining the meantime fixation - of the capital charge against the security. ( This valuation will generally be based ■ on the productive capacity of the farm e during the stated period.” Y The central committee at Wellington ’> of financial and commercial organisations in its recent examination of the Government’s proposals remarked that valuations on productivity would be all f that could be desired if everyone were x equally competent, but that the matter . was inter-locked with the question of the personal efficiency of the mortgagor, as all farmers could not make a proj perty equally productive. ' The committee could have elaborated its comment by going on to say that I while the value of land lies in its average production by an average t farmer, actual production is not the only test io be applied. Any competent . valuer valuing farm land must inquire t as to its actual production, but his in- [ quiries do not stop there. He must , further inquire whether there is any factor which has resulted in the actual , production being higher or lower than [ might be expected were the property farmed by an average farmer with i average stock. If such factors exist, then the competent valuer will adjust / his calculations to compensate fqr the , divergences from the average. To illustrate, there are available to , the committee the actual results achieved by certain groups of farmers over a period of 12 months ended June 30 last. One group of accounts are those of certain dairy farmers all occupying farms within a short distance of each other. Of twelve accounts examined, the best result was that of a farmer milking 30 cows, his gross receipts for the period being £1494, or £l6 7s 6d per cow. The poorest result was that of a farmer milking 80 cows, his gross receipts being £514, or £6 8s 6d per cow. It is not necessarily equitable to base valuations of dairying land in this particular district on a gross return of either £l6 7s 6d per cow per annum or £6 8s 6d per cow per annum. ' Actually, the majority of the 12 farmers mentioned show returns equal to approximately £lO 10s Od per cow for the period. The farmer who could show ( only £6 8s 6d per cow might have ' laboured under the handicap of having i a poor herd, or his lack of success compared with his neighbours might have been due to a lack of competence on . I his part, or both factors might have i existed. Any competent valuer would ‘ endeavour to ascertain the reason before . valuing the land. • , The two extreme cases mentioned ■ were farming approximately equal areas. ] Valuations based solely on actual results j would, however, show one of these < farms to be worth approximately 2J times per acre what the other was ( worth. That surely cannot be equitable? , Furthermore, the adoption of such a , method as proposed would result in 1 there being in force at the same time j two distinct systems of valuing rural ( land—the one under discussion and the ■ one now obtaining under the Rating < Act. 1 This question of valuation is only one < of the numerous and serious difficulties ’ that arise under the rehabilitation pro- ] posals of the Government. It is ac- i companied by objections even more i vital, which were sketched by the i financial and commercial committee in I its analysis of the rehabilitation pro- I posals of the Government