NEEDS FOR AGRICULTURAL ASSETS/PROPERTIES VALUATION AND INSURANCE.

In clear term, agricultural properties includes but are not limited to, crop farms, perennial plantings, dairy farms, forestry and aquaculture that are key contributors to economic growth, especially for developing economies, where land and an active workforce are generally available.

If combined, these resources of land and people can produce valuable natural commodities, such as palm oil, coffee, timber, livestock and milk.

Other than these more conventional commodities, ‘biological assets’ also include the use of bacteria in the production of dairy (yoghurt, cheese) or the cultivation of viruses to produce vaccines for the pharmaceutical industry, all of which are categorised as agriculture properties in the modern world.

A farmland valuation is a document that gives an estimate of the fair market value of your agricultural property. The most common reason for ordering an appraisal/valuation is to obtain a farm loan on a property for business expansion. However, there are several other reasons why an appraisal/valuation might be needed. Below are just a few:

1. Agricultural Insurance:

Humans aspire acquired assets/properties either for personal use, for business or profit making productions to last the full "life span" to derive the intended benefit and same goes for agricultural properties and farm crops but sometime the reverse might be the case. Imagine investing huge sum of money on planting high breed maize or cassava or vegetables on several acres of land only to be destroyed by rainstorm, flood, infectious disease or eaten by cows.

It is a known fact that one cannot be too careful to prevent some occurences such as natural disasters, accidents, etc that sometime lead to unplanned and untimely loss of properties/assets or hinder ability to remain economically potent life.

Therefore, this calls for pragmatic planning for the future especially in the case of any mishap and that's where insurance comes into play. The concept of insurance is to deposit a little amount of money (called premium) over a period of time (sometimes definite period and other times continuously) in anticipation that the insurer (beneficiaries) will receive a lumpsum in the case of a loss.

Agricultural assets including cash crops and economic trees on a farmland can be insured against unplanned occurrence that may lead to loss and to be able to that, the farm owner should have valuation report of the farm assets stating the monetary worth of the assets categories as well as the overall value of the assets. That would help in determining the premium payable and the compensation payable in the case of loss (to avoid underpayment).

While payments of premium on an insured asset may be viewed many as a waste especially when such asset continue to be of use and devoid of any event of fault, damage or loss. The loss that may be incurred if such event occur has been proven to be greater than the premium that would be paid throughout the life of the insured asset. Therefore, agricultural assets valuation is a vital document every commercial farm owner should possess and wholeheartedly embrace agricultural insurance to secure the future.

2) Obtaining A Farm Loan:

An agricultural valuation report is generally required by most farm lenders before a final farm loan approval to ensure that the farm mortgage loan amount is not more than the current value of the farm assets/property. The appraisals for farm loans are performed by a Certified Estate Surveyor & Valuer who is typically a licensed individual trained to render expert opinions concerning agricultural assets/ properties values. In an appraisal, consideration is given to the property, its location, farmability, as well as comparable sales.

3) Farmland Appraisal For Capital Gains:

A farmland appraisal is used to determine the stepped up basis at the time of death of the current landowner/heir. It’s a good idea to have a certified appraiser to appraise the land at the time of death. Having this done will give the new owner or the late owner's family an accurate market value of the farmland. The appraised price becomes the basis, if the new owner or beneficiary decides to sell in the future, that price is also used when determining the capital gains tax.

4) For Merger & Aquisition:

If you’re considering merging, you should request an opinion of value from a Valuer that is highly experienced in agricultural properties valuation to determine the worth of your agricultural properties been your equity contribution to the merger that would be a guide in determining the profit sharing formulae .

That also help to set realistic value in the case of acquisition and let the seller know the value of his farmland having taking into consideration comparable sales, soil type, location, and farmability when putting together the farmland appraisal by the valuer.

5) Attract Investors:

Reliable and consistent valuations of agricultural properties are, however, essential. Robust valuations are vital in order to unlock the investment required to support a sustainable economy; to promote the productive use of agriculture property (including land) in sustainable economic growth; to maintain the confidence of capital markets; and to meet the requirements of financial reporting under Iinternational Accounting Standard.

The boards reviewed the valuation of agricultural properties to establish whether the business is doing well or not or well structured and viable to invest in.

6 Proof of Home tie for visa purpose:

Proof of home tie, this is very crucial and an important aspect of visa application either for study, visit or medical owing to the fact that many applicants have been denied visas based on insufficient proof of home tie. That simply means having sufficient fund is not enough to guarantee your visa approval.

As an international student applicant or visitor you are seeking temporary residence & need to show that you have reasons to leave Canada after your study or visit (if required to do so).

The embassy wants to see evidence of your home ties. Many applicants find it easier to use their family members as part of their home ties. But in the case you're applying with your family, it means you must be ready to show other ties.

It could be your business, investments, employment, financial assets and most importantly landed properties.

Submitting a valuation report of your landed assets (land & building or farm) along with other required documents for visa application could actually boost your chance of visa approval.

Just like applicants submit bank Statement to show how much fund he or she has to fund the study or visit. Same is for valuation report that show how much an applicant has in landed properties that could facilitate his or her return and what he has/have in landed properties that can be liquidated to raise more funds if the need arises or back up source of fund in account as the case may be, thus it is a very vital document for applicants to submit.

.
It will make lots of senses if you have good financial status as confirmed by your bank statement of account and property or assets valuation report to corroborate your financial/economic status.

Agricultural properties comprise:

i. Land

ii. Structural improvements - i.e. buildings and site improvements (both permanent and/or semi-permanent)

iii. Plant and machinery attached to the land e.g. processing plant

iv..Plant and machinery not attached to the land e.g. vehicles, heavy equipment.

v. Biological asset attached to the land i.e. living plants

vi. Biological asset not attached to the land i.e. living animals

vii. Agricultural produce

For more enquiries, kindly contact +2348032296562, +2349049045703 (Whatsapp Only).