Agriculture land in Karnataka is the most expensive followed by Telangana, according to a new Agri Land Price Index (ALPI) launched for six states, including the two launched by the Indian Institute of Management, Ahmedabad (IIM-A) on Thursday.
The index, a prelude to a nationwide gauge to monitor farm land prices, was developed for 107 districts of Andhra Pradesh, Telangana, Karnataka, Maharashtra, Tamil Nadu and Uttar Pradesh, benchmarking land prices for rural and semi-urban areas.
The index is aimed at removing uncertainty in the agricultural land valuation.
IIM-A, in collaboration with digital agri-land market place SFarmsIndia, would record and monitor the data of prices of agricultural land in India. The index would act as a reliable source in terms of benchmarking land prices and help in potential conversion of agricultural land into real estate or for industrial use.
According to Prasant Das of IIM-A, the index would help the government in adopting more scientific measures for providing compensation for land acquisition besides helping financial institutions in underwriting of loan and insurance contracts. It would also ensure visibility in movement of agricultural land prices across the country.
As per the index, 34 districts in the six states are considered ‘most expensive’ while land prices in 32 districts are referred to as ‘median’ and prices in the rest of the 41 districts are ‘least expensive’.
According to the samples collected for developing ALPI, average agricultural land prices in Karnataka, Telangana and Andhra Pradesh, are reported at Rs 0.93 crore, Rs 0.81 crore and Rs 0.77 crore per acre, respectively, while prices in Uttar Pradesh, Maharashtra and Tamil Nadu are Rs 0.58 crore, Rs 0.49 crore and Rs 0.47 crore, respectively.
APLI based on samples from at least 18 states will be developed in the next one year. This agricultural index is expected to offer better representation of the national context as well as offer a more granular index at regional levels.
“There is a surge in entrepreneurial interest in agricultural land and allied professions, this index will help in project planning,” Das said. He also said that investors could use information in the index to assess the historical risk and return in the past and predict these metrics for the future to decide on their investment positions.
Some of the factors identified for determining the agricultural land price include irrigation facilities, distance to nearest town or airport and proximity to international airport.
The Misra Centre for Financial Markets and Economy at IIM-A will host the index on its official website.
The country has around 200 million hectares of agricultural land and land acquisition for industrial use has become quite contentious because of lack of information of land prices in rural areas.