Why sell your agricultural land?

Unstable market

In 10 years, prices on agricultural land have increased approximately fourfold. One of the reasons for such a rapid rise in prices was Estonia's accession to the European Union in 2004, as a result of which agricultural manufacturers began to receive subsidies. The subsidies have enabled manufacturers to expand much faster than before and invest in the most important thing – land. In the face of growing competition, land prices began to rise as well. The peak occurred in 2013, when the unified subsidy for the area amounted to more than 114 EUR/ha, and the value of agricultural land in certain areas reached 4,600 EUR/ha. This highly productive field attracted new manufacturers, which resulted in the starting overproduction of agricultural products in Europe. The situation was worsened also by sanctions from Russia, which prevented the export of agricultural products in the Eastern direction. Overproduction automatically meant that prices on agricultural products fall. In addition to falling food prices, unified subsidies for the area will later decrease as well, according to the rural life development plan for 2014—2020. All this will affect the land price in the future. It is better to sell at once and at a good price, than later and at an unprecedentedly low price!

Doing agricultural business on your own is difficult.

Cultivation of arable land with your own force is a complex, laborious and time-consuming process. If the landowner wants to cultivate the land on his own, it requires special equipment and machinery, maintenance and acquisition of which is very expensive. It also requires thorough knowledge in this field, organization, energy and time. We have everything necessary for this, and since our volumes of work are large, we also have higher purchase prices.

Low performance

Leasing arable land to a manufacturer is not the most profitable investment. If the landowner decides to lease his arable land, he/she should take into account rental prices, which in the future will reach a maximum of 100 EUR/ha, and from which it will be necessary to pay income and land tax. For example, if you own 4 hectares of arable land, the value of which today is EUR 10,000, then you will receive EUR 300 of profit yearly. If we put the amount received from the sale of land on a fixed-term deposit (for example, at 6% per annum, which is offered by some accumulated savings and credit associations), the profit would be EUR 600.