VÝVOJ TRHU SE ZEMĚDĚLSKOU PŮDOU A JEJÍ PRONÁJEM V NOVÝCH SPOLKOVÝCH ZEMÍCH SRN

Evolution of the real-estate market and of the lease prices in the new states of the FRG

Vývoj trhu se zemědělskou půdou a její pronájem v nových spolkových zemích SRN

Dietmar Jahnke

Address:

Doz. Dr. Dietmar Jahnke

Universität Rostock

Fachbrereich Agrarökologie

Institut für Agrarökonomie und Verfahrenstechnik

D - 18051 Rostock

Summary<A[Combination|Survey]>:

In the old states of the FRG meaningful trend investigations on the development of ground and lease prices<A[at|in]> are available. The agricultural experts work with detailed purchase value statistics, which consider the essential price-determining factors. In the old states the purchase prices of farmland in 1995 amount to 17.197 up to 56.542 DM/ha depending on states. In the five new states the range was 5.446 to 11.622 DM/ha.

The differences<A[differences|differences]> cannot be explained by the quality of the ground and the expected net returns (interest of the ground). The compulsion for obtaining optimal operating structures and a high spending power combined with the desire of secure capital investments<A[capital investments|investments]> cause a strong demand for real-estate.

In<A[At|In]> the new states, the agricultural enterprises work to a large extent on<A[on|onto]> lease basis - single enterprises about 95%, juridical persons about 99%. Since the association of soil realisation (BVVG) at a considerable volume acts as a lessor, a relatively homogeneous price orientation is current for<A[bearing|orientation]> 4 to 5 DM per soil point, ha and year. Particularly at the boundary between new and old states single businessmen offer higher lease prices. The compulsion for increasing single enterprises determines a high demand and the tendency<A[tendency|trend]> for lease price increases.

The lease prices paid at present in<A[at|in]> the old states appear to be absolutely too high from the viewpoint of net profit earn and could not be obtained in<A[at|in]> the new states. Agrarian policy<A[agrarian policy|agricultural policy]> is confronted with the task to set up reasonable relations on the ground and rental market.

Anotace:

V původních spolkových zemích SRN (západní Německo) má cenový vývoj půdy a její pronájem určitou koncepci. Zemědělští odborníci používají při oceňování půd statistické metody, které zahrnují základní faktory determinující cenu. V roce 1995 se cena zemědělské půdy v původních spolkových zemích pohybovala v rozmezí od 17 197 DM do 56 542 DM/ha. Zatímco ceny zemědělské půdy v zemích bývalého východního Německa se pohybovaly mezi 5 446 DM až 11 622 DM/ha.

Tyto cenové rozdíly však neodpovídají kvalitativním rozdílům půd a ani výnosům ze zemědělské činnosti. Snaha k tvorbě optimálních majetkových struktur a vysoká kupní síla společně s požadavkem bezpečných kapitálových investic vyvolávají vysokou poptávku po nemovitostech.

V nových spolkových zemích (bývalé východní Německo) zemědělské podniky hospodaří převážně na pronajímané zemědělské půdě - z toho fyzické osoby hospodaří na 95% a právnické osoby na 99% pronajímané půdy. Od založení asociace trhu z půdou Association of Soil Realisation (BVVG), která má velký význam v roli pronajímatele, je současná cenová hladina relativně homogenní a pohybuje se mezi 4-5 DM/půdní jednotku, hektar a rok. Mimořádně se setkáváme s obchodníky nabízející půdu ve vyšších cenových relacích a to zejména v bývalých hraničních oblastech mezi východním a západním Německem. Úsilí o zvyšování podílu menších samostatných zemědělských podniků zvyšuje poptávku po půdě a zároveň cenu pronájmu.

Ceny pronájmu půdy jsou v současné době na území bývalého západního Německa příliš vysoké a neodpovídají výnosům ze zemědělské činnosti. Agrární politika by se tedy měla zaměřit na problematiku spojenou s oceňováním půd a jejím pronájmem.

Key words:

real-estate market, lease prices, ground prices, factors cause increases or reductions of arable land prices, interest of soil capital, enterprise profitability, net returns.

Klíčová slova:

trh nemovitostí, ceny pronájmu, ceny půdy, cenové faktory, zisk z půdního kapitálu, ziskovost zemědělských podniků, čisté výnosy.

1. Introduction

<A[At|In]> In the new states within a short time evaluation approaches for agricultural and forestry areas had to be obtained [ 1] . Furthermore, an information system for establishing purchase value statistics had to be worked out as a basis for a market. The problems of the ground and rental market in<A[at|in]> the old states are a starting point of the considerations, since they influence the relation in<A[at|in]> the new states strongly. Hereafter, problems of elaborating purchase value statistics as well as the value evolution at the ground and rental market will be discussed in relation to the profitability and the stability of agricultural enterprises. As a data base<A[data base|database]> the following informations are used: the Agricultural Reports of the federation and of the states, as well as farm management evaluations of the book-keeping association<A[association|dressing]> of<A[in|into]> Schleswig-Holstein and Mecklenburg-Vorpommern.

2. Gain of information on soil and lease prices

At present, valour committees are working in<A[at|in]> the new states too. The valour committees for real-estate values were created on the basis<A[basis|element]> of the Federal Building Law of 1960 [ 2] . The committees normally consist of a chairperson, a deputy and honorary collaborators. The office of the valour committee registers all sale contracts about real-estate purchases in an administrative district and sets up a purchase price collection according to specific classification principles. Annually a real-estate market report [ 3] is normally issued by each valour committee of a rural district. Analogous to information on built-up and non built-up plots from the annual plot market reports information on the purchase prices of agricultural and forest areas can be obtained.

The tasks of the valour committee result from § 193 of the Federal Building Law [ 2] . To this belong predominantly:

· Ascertaining<A[Ascertaining|Determination]> of ground standard values and other market values for value

ascertainment (value-determining criteria)

· Elaboration of expert opinions on the current commercial value of built-up and

non built-up plots by experts.

Concerning areas used by agriculture and forestry, the average dates in the real-estate market reports are a rough orientation. In the purchase cases in the new states the tendency<A[tendency|trend]> increases to sell so-called "mixed areas" (arable land, grassland, waters, surrounding area) as an entirety for an average price<A[average|average price]>. In such cases individual value determining factors become no more clear in statistics. Initial information on the value determination of farmland are (- although antiquated -) the yield value-numbers of arable land and grassland (maximum 100). Since, at present, grassland scarcely gives prospects on possibilities of intensification, its value decreases constantly. Purchase cases for arable land in the administration district around Rostock showed in 1997 an average purchase price of 6.500 DM/ha (Ć value-number 42), whereas "mixed areas" were traded for 6.200 DM/ha on an average[ 3] .

Starting from their own or outside empirical values, the experts establish specific statistics on purchase prices. Now the following factors cause increases or reductions of arable land prices (examples):

· Anomalous<A[Deviating|Differing]> crop relation (sugar beet quota)

· Anomalous traffic situation

· Handicap by gas and dust

· Utilisation conditions in protected areas

· Erosion danger

· Yield increase by wood stripes

· Sloping fields, stony fields, field barriers

· Necessity of draining or irrigation

· Plot size.

KINDLER [ 4] proposed a detailed factor frame for the quantification of the influences. At this time for the new states analyses of purchase value statistics are also available, permitting a judgement of the land and lease prices on the market.

3. Tendencies<A[Tendencies|Trends]> in the evolution of land and lease prices

Determining the land and lease prices in <A[at|in]>the new states of Germany, there was a strong insecurity according to the political turn in 1990. Imitations of the <A[Dependences|relations in the old states were non-real.

In<A[At|In]> the old states during the last decades ground prices have developed, which cannot be explained by an agricultural use. Tables 1 and 2 give information on the absolute amount of the ground and lease prices as well as their evolution in<A[at|in]> the new and old states. At the beginning of the 80ies years, a maximum in the price development of agricultural and forest areas exists obviously<A[at|in]> in the old states. This must be regarded as a result as well of the high purchasing power of the total population and to aim at a crises secure capital investment, as well of the enormous compulsion to enlargement of the farms.

Tab. 1: Comparison of average farm size, ground- and lease price in selected

states of Germany[ 6]

In 1990 in<A[at|in]> the new states in the DM-opening balances of the enterprises a price fixing for real-estate had to be ensured urgently. The recommendation [ 1] for farmland and forestry provided a temporary evaluation with 150 DM/soil-point (SP, point of soil classification). This meant for a middle ground in the case of<A[in the case of|with]> 42 SP a price of 6.300 DM/ha. The actual values in<A[at|in]> the new states (Tab. 1, 2) at present correspond to this order of magnitude with a decreasing tendency<A[tendency|trend]>.

Tab. 2: Evolution of the ground prices comparing the new and old states of

Germany [ 6]

Tab. 3: Evolution of acreage-equipment and lease prices [ 10]

(agricultural enterprises in Schleswig-Holstein altogether)

For agriculture the lease gains more and more importance since the area concentrations required fore profitable enterprises are only attainable on this way. The data shown in Tab. 1 and 3 give a survey on the absolute amounts<A[height|level]> and the evolution of the lease prices. The mean data already show, that no direct relation exists between ground and renting price<A[purchase|reference]>. An increase of the lease prices is obviously now.

4. Relationships between the profitability of agricultural enterprises and<A[Calculating|Interest rate]>

the interest of soil capital

The question has to be answered, whether the user can comply with the price demands determined by the vendors or the lessors under the given frame conditions. According to analysis results, at present there are no problems in the earning of the required lease payments on average of the enterprises (Tab. 4, 5, 6). Obviously, at the commercial farms under 100 ha exist problems in fulfilling the leaseholders<A[lease-holder|lessee|tenant|tenant farmer]> demands (Tab. 4). The negative net profit data mean that the ground rent for the lessor cannot be paid at the required level, if the manpower of the farm owner and of the employed family workers is paid in an appropriate manner<A[height|level]>. Obviously, the payment of the ground rent is possible, if the area concentration is increased (see enterprise sizes more than 100 ha in<A[in|into]> Tab. 4)

In the farm types fodder production (milk) and processing farms the ground rent is obtained predominantly in the branches of animal production (Tab. 5 and 6).

Tab. 4: Comparison of lease prices and enterprise profitability in<A[in|into]> Schleswig-

Holstein according to selected regions and classes of enterprise sizes 1996/97 - market crop extensive farms [ 10]

In the period of analysis the paid leases are strongly differentiated according to farm site and type of farm management. The current agricultural-political frame conditions permit a payment of the described lease rents. The business evaluations (Tab. 4 to 6) prove this. The question must be asked, whether the represented profits are real and come to application correctly. Moreover, it is to be considered that the profits at present contain about 600 DM/ha acreage-premium with subsidies character (EU-reform of agricultural prices in 1992). As is known, the market crop farms in the new states at the present time earn high profits compared to the animal production enterprises (Tab. 7).

Tab. 5: Comparison of lease prices and enterprise profitability in

Schleswig Holstein according to selected areas 1996/97 [ 10]

Assessing the lease price from a pure agricultural economic sight, it shall be assumed, that a market crop farm requires a business capital of about 4.500 DM/ha (mean information according to the Agricultural Report of the FRG 1998, invested capital without ground - 4.882 DM/ha). At an interest rate of 5,5%, a calculated interest claim of about 250 DM/ha would result. If the same interest claim is intended for the lessor, this would mean a net-return division<A[division|pitch]> and therefore about 250 DM/ha for the lessor. These orders of magnitude correspond to the actual values in<A[in|into]> Table 6 for Mecklenburg-Vorpommern.

Tab. 6: Profitability differences between "good" farms and "average" farms as

well as lease prices[ 10]

If we follow the represented division<A[division|pitch]> of the net returns for user and owner of the ground, the lease prices and also the ground prices in<A[at|in]> the old states must be considered as too high. The task of agrarian policy<A[agrarian policy|agricultural policy]> must be to introduce evolutions adapted to the economic demands.

Tab. 7: Lease prices and profitability of agricultural enterprises according to

legal forms [ 7]

References:

Dozent Dr. agr. habil. Dietmar Jahnke was born in 1938 in a farmers family. He studied agriculture and amelioration engineering and has experience in farm management and bookkeeping. He specialises in agricultural Taxation. For many years, ha was leader of the Institute of economics and technology of the University in Rostock. The focus of his research is cost calculation and controlling.