Why must the value of agricultural land be based on crop revenue?

The value of agricultural land being based on crop revenue is primarily to reflect the potential income from the land. This approach emphasizes the economic value derived from farming activities, recognizing that the land's worth is intrinsically linked to the productivity it can generate. By evaluating the expected crop yield and potential market prices, stakeholders can make informed decisions regarding investment, buying, or selling agricultural property. This method provides a realistic assessment of the land's earning capacity, which is crucial for farmers, investors, and lenders when determining its overall value.

While ensuring profitability and sustainability and aligning with market trends are important aspects of agricultural economics, the fundamental basis for valuing land is its income-generating potential, which directly relates to crop revenue. Increasing the sale price may result from improved valuation methods or higher market demand, but ultimately, it is the anticipated income from crops that dictates the land's value.