Water access a key component to farmland value


“EVERYONE KNOWS that land without water isn’t worth much.” That was the sentiment of Tony Toso, a California Farm Bureau Federation director, rancher, and professional agricultural land appraiser, in a 2014 article about ground water rights. No matter the locale of the farm or the crop being grown, access to water is of the utmost importance in agriculture. Water access is so important, it has a direct impact on the value of the farmland.

WHEN WATER ACCESS IS — AND IS NOT — A PRIMARY FACTOR

From a land-value standpoint, there are a few places where water access is not a main consideration in land appraisal. As you might guess, these places are where water is in abundance throughout the growing season and where there are no restrictive regulations on the use of available water. For places where limited water supplies and regulations restrict agricultural use of water, access to a water source is one of the prime factors in determining the value of the land.

The type of crop a farmer can grow on a piece of land also affects the value of that land, as different crops have different water needs. For instance, vegetable growers will always need access to an abundant water supply because vegetable crops usually require a greater volume of water and more frequent watering than other crops. Similarly, the quality of the water also matters, for growing vegetables and other edible crops.

ASSESSING WATER ACCESS AND LAND VALUES

There are no hard-and-fast calculations to figure how water access on a tract of land will affect its value, but there are some universal facts:

• Lack of water access cannot be offset by other ideal land attributes, such as superior soil quality.

• Access to water with poor quality — high in salinity or toxic elements, as examples — is not desirable.

• Drilling wells and adding irrigation systems to offset water-access limitations can be very expensive.

This column is sponsored by AgAmerica Lending.

CREDIT

column by DONALD HARDEN

BIO: Donald Harden, the Relationship Manager for AgAmerica Lending, grew up in the cattle and citrus business, managing a family ranch of several thousand cattle and horses. He has more than 30 years of experience in the real estate business, and more than 20 years specializing in agricultural sales. Don has owned and operated farm and ranch supply stores, machinery auction companies, and farms. He has served as a director and on the board of the Cattlemen’s Association, as the manufacturer’s representative for ag equipment companies, and as a beef cattle specialist for a national feed company. Don has traveled across the U.S. as a sales rep, conducting seminars and fostering long-lasting business relationships. Don enjoys his work at AgAmerica, as he has never met a stranger. For more information, visit www.AgAmerica.com.