IIM-A to ‘help retain’ farmland for business, launches Farmland Price Index
By our representative
In a surprise move, the Indian Institute of Managment-Ahmedabad (IIM-A) has launched what it calls “India’s first-ever farmland price index” in collaboration with SfarmsIndia to help conserve land agricultural into real estate. Organized by IIM-A’s Misra Center for Financial Markets and Economics, India’s premier global management institute hopes to provide companies with “quality-checked” data on farmland prices across the world. country.
SFarmsIndia is a farmland discovery platform, seeking to connect potential buyers and sellers, claiming to be “one of the very few platforms in India focusing exclusively on farmland listings”. It is said to have 25,000 registered buyers and sellers, offering over 7,000 land listings.
IIM-A, which officially launched its farmland price index at the institute, suggests that one of the main reasons it collaborated with SFarmsIndia is that it has “succeeded in cutting out the middleman, bring price transparency and broaden opportunities for rural vendors. With 15% growth in registrations month-over-month, with presence in Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Telangana and Uttar Pradesh, SFarmsIndia expands to more States and “Product Offerings” (APC & Food Park Lands, Small Farms, etc.).
Called IIMA-SFarmsIndia Agri Land Price Index (ISALPI), according to an IIM-A source, it will record and present “quality controlled” data on farmland prices across the country. “This index is particularly important for benchmarking land prices in rural and semi-urban areas. In such a case, the index will serve as a reliable source that will signal the potential conversion of agricultural land into real estate,” the source said.
Stating that developing an index for land plots is a complex task due to price differences visible in different listings caused by a multitude of factors including market-wide supply and demand factors , IIM-A states: “The Misra Center for Financial Markets and Economics at IIMA, under which this index is launched, will host this index on its official website.
The index would not only benefit property developers, but also policy makers, local governments, environmentalists, investors and financiers.
Announcing the decision at the official meeting, Professor Errol D’Souza, Director of IIMA, said that one of the reasons the leading trade institute decided to embark on land price indexing is the following: “With just over 200 million hectares, India is home to only 2% of the world’s cultivated land; but feeds more than 15% of the world’s population. However, recently, he added, there is “an increase in contractors’ interest in farmland and related professions… We believe it is the right time to launch such an index for India.”
The IIM-A source claimed that the index would not only benefit property developers, but also other stakeholders, including policymakers, local governments, environmentalists, investors and financiers. “For example, the index can be used by local governments to compensate people who lose land to highway expansion.”
Project leader and associate professor of real estate finance at IIMA, Dr Prashant Das, said: “Investors could use this information to assess historical risk and return in the past and predict these measures for the future in order to decide on their investment positions. Fund managers and producers could use this information to globally assess their own performance. Financiers and insurers could use this information to assess the company’s risk associated with the asset class reflected in the index.