November 18, 2024 | Journal of Agriculture and Food Research |
A study conducted by the University of Catania and the University of Messina, Italy, addresses challenges in agricultural land appraisal, particularly in assessing the market value of orchards growing pioneering crops, such as avocados, in regions where such cultivation is new. Traditional methods like the income capitalization approach face difficulties due to the lack of reliable data, especially regarding the capitalization rate, leading to inaccurate results. This paper proposes the Remote Segments Approach (RSA) as an alternative. RSA compares the asset’s segment with one or more remote segments to estimate market value more realistically and conservatively when comparable data is lacking. The study applies RSA to the valuation of avocado orchards in Sicily, where tropical and subtropical fruit cultivation is rapidly expanding due to climate change. The research suggests that as innovative crops continue to grow in Mediterranean areas, using advanced valuation methods like RSA will be essential for accurate land value assessments and better decision-making in agricultural real estate.
