RURAL AREA VALUATION FOR SUSTAINABLE DEVELOPMENT IN RURAL AREAS ICSAEF 2015 : 17th International...

RURAL AREA VALUATION FOR SUSTAINABLE

DEVELOPMENT IN RURAL AREAS

ICSAEF 2015 : 17th International Conference on Sustainable Agriculture, Environment and Forestry,

August 27-28 2015, Paris, FRANCEAssist. Prof. Dr. Mehmet ERTAS, Selcuk University, Higher School of Vocational and Technicial School, Mapping and Surveying Program, Konya, TURKEY 1

A RURAL DEVELOPMENT

Environment, global pollution, migrations; soil pollution, shortage

of potable water resources have been directly interested every

society.

These problems which require a global strategy can only be

solved with global approaches and national priorities.

The concept "rural development" has come into agenda very

often for 15-20 years.

Development search has accelerated for people living in rural with

the wish and strategy of living in a world where all mankind is

happy and welfare.





Rural development can be defined as the process of;

a) Increasing the access to facilities of humane living conditions,

b) Supporting the demand for change in development,

c) Discovering their own power of individuals and leaning on it,

d) Moving the community dynamics,

e) Ensuring fair distribution of income,

f) Increase in income,

g) Increase in the rate of access to education and health

services,

h) Improving the living conditions of women and children,





g) Development of the rural and agricultural industries of the

people living in rural areas

The main objective in rural development is;

h) To slow down the migration by reducing the differences

between urban and rural,

i) The improvement of the living standards of rural communities

who has limited income comparing to those in urban areas, to

obtain sustainable rural life.





B RURAL STRUCTURE OF TURKEY

Turkey accommodates up to 78 million populations over 784

thousand areas, which has 41.5 million hectares of farmland 20.6

million hectares of which is cultivated, and having the population

of 15 million live in 81 thousand agricultural lands.

Every year the population of our country is growing about 1.7%.

Approximately 95% of rural settlements have 2000 or less

population. The overall literacy rate in rural areas is 82% (96%

nationally), this rate falls to 73% in women.

Only 923 thousand farmers and 165 thousand agricultural

workers under the assurance of Social Security Agency.





RURAL STRUCTURE OF TURKEY

The sector's share in national income is 11.5%, employment

share is 29.5% (rural agriculture and agro-industry).

65% of a farmer family in our country have 50 da or less

farmlands, 30% of them have 50-200 da farmlands, 5% of them

have 200 da or more farmlands.

The rates of the farmer family who have 4 or more pieces within

years are;

a) 72% in 1952,

b) 64% in 1980,

c) 57% in 1990,





RURAL STRUCTURE OF TURKEY

d) 44% in 2001,

e) 29% in 2013,

There are two reasons lying under the decrease in the number of

pieces.

First reason is the increase in the number of consolidation

projects, and stocking the lands by wealthy families staying in

the village while the poor are migrating to cities.





C RURAL STRUCTURE OF KONYA

Rural structure of Konya is similar of the average of Turkey.

Although the city has the 2.5% population, and 5% of the country,

it owns 9% of the agricultural lands. The rural land structure of

Konya is as in Table I.

While the limitation of present water supplies is worsening the

water problem every day, it also keeps its importance in

agriculture.





RURAL STRUCTURE OF KONYA

Table I: Land Use of Konya City Area (da) %

Cultivated landField 11.692.425 28,7Fallow 6.768.596 16,6Vegetables 196.606 0,5Fruit 287.577 0,7Vineyard 99.182 0,2Total 19.044.386 46,7Meadows and pasture 7.614.607 18,7Forest 5.401.890 13,2Barren land 8.752.637 21,4Grand total 40.813.520 100





D RURAL LAND VALUATION

The purpose of the rural land valuation is to determine the price of

a real estate on a demanded date by making use of the agreed

and announced selling price between the seller and buyer without

considering the unusual and personal selling behaviours,

and by using one of the appropriate methods for the condition of

the real estate (land, building and facilities, equipments and

installations).

Population growth rate is 1.7% across the country whereas the

rate of migration from rural to urban is 1.4%.





RURAL LAND VALUATION

Today, there are usually;

a) Older people,

b) Agricultural enterprises,

c) Wealthy farmer families,

in rural areas;

People who own a few square decars of land sometimes leave it

uncultivated or may not want to sell their lands, but people who

owns a few hectares of land and wish to use the money for

starting a new life in a city will sell it any case.






In this case, the people who were migrated would sell their

property to those b and c. These two groups answer the intense

selling demand as satiated buyer.

In other words, they seem reluctant on bargaining. In brief there is

no real seller that wants to sell and no real buyer that wants to

buy in rural.

Since there is non-competitive media, lands were mostly sold

under their value without any valuation report.

Therefore, real estate agents dominate the real estate market

instead of valuers and they often work with speculators.






However valuers engaged in residential areas close to the border

of the metropolitan and sales are generally around the market

value.

Because these places are areas that are expected to open

residential development in near future and their agricultural

activities will end a few years later.

Since the real estates in rural were sold under its real value, the

loss of State’s property tax and real estate buying and selling fees

are large.

Hence, the importance of rural land valuation arises.






As a legal requirement in agricultural areas income method are

applied as a legal obligation. This method is based upon principle

of the arithmetic average of one-year net income of lands on an

agricultural area to achieve their capital values and (1) is used in

calculation of capitalization rate

(1)






The most difficult point in agricultural valuation is to determine the

local capitalization rate.

The most difficult part of this is the difficulty in obtaining

necessary data, the lack of information, variation of the rate from

region to region and even from land to land in the same village.

Because the topography, prevailing wind direction and ecology

can affect the soil depth and irrigation facility in a village, these

can change the soil productivity.

And this is a broad concept that affects the value of the land.





E BARE VALUATION METHOD IN RURAL AREA

VALUATION

Correlation 1 is based on the assumption that spatial and

productive features of all lands in a village are equal. Thus only

one capitalization rate calculation can be made in every village.

This assertion may not always be valid. Because the lands even

have the same yield strength can be priced differently.

The reason is the location superiority over one another.

Therefore, an agricultural area may have lands with;

a) Different yield strength,

b) Different location advantages





BARE VALUATION METHOD IN RURAL AREA VALUATION

so, not just one but a few local capitalization rate should be

calculated.

Because of these and other similar reasons, all the village lands

cannot be accepted as equal in location and yield aspects and

cannot be put into the same cluster.

Instead, all lands should be purified from their Land Value Points

(LVP=ADP) namely they become bare, capitalization rates of

irrigated and arid lands should be calculated in their class.

Since the capitalization rate is calculated by using cheapened

prices, this new method is called bare valuation method (2).






Now the capitalization rate can be calculated by the (3), not (1).

(2)

(3)

LVP (ADP); is the land value point and is calculated with (4) for

each land.






(4)

Application results shown that the mean square error of the

arithmetic average of the values of k calculated in correlation 1 is

at least twice more than in (3).

Market value of the lands can be calculated by (5), after their LVP

(ADP) were found.

(5)





F CONCLUCIONS

The use of land which is one of the fundamental elements of

human life increases day by day for urbanization, industry, and

transportation and agricultural.

The value of agricultural lands is continuously changing because

of intense demand and nutrition for agricultural demands from

different sections.

Because of this, the valuation of agricultural lands has gained

importance.

The land valuation has been made for various aims such as

nationalization, purchasing, credit facility, land consolidation and

bank hypothec.





CONCLUCIONS

Whatever the aim is, valuation is made according to the income

method in Turkey as a legal obligation.

However, in these valuations the land value point and

conjuncture have been ignored.

As understood from the paper, it is vital that the most possible

results are approached if the valuations of rural areas are made

according to the Bare Valuation Method.





CONCLUCIONS

By this method

a) The seller will know the market value of the land,

b) Municipals will get tax based on these values,

c) Directorate of Land Registry will get fees from sales

according to this value,

d) The seller will not have the feeling of being deceived,

e) Speculators will move away from rural areas,

f) Valuers will become dominant on the sector not estate

agents.





Thank you for your patience!

Your questions…

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RURAL AREA VALUATION FOR SUSTAINABLE DEVELOPMENT IN RURAL AREAS ICSAEF 2015 : 17th International...

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