Hyderabad: Leading management institute Indian Institute of Management Ahmedabad (IIMA) and agri-land marketplace SFarmsIndia have launched the IIMA-SFarmsIndia Agricultural Land Price Index (ISALPI). The Land Price Index will record and present data on agricultural land prices across the country. This index is important in the context of benchmarking land prices in rural and semi-urban areas (…)
Published date – June 3, 2022, 10:59 pm
Hyderabad: Leading management institute Indian Institute of Management Ahmedabad (IIMA) and agri-land marketplace SFarmsIndia have launched the IIMA-SFarmsIndia Agricultural Land Price Index (ISALPI).
The Land Price Index will record and present data on agricultural land prices across the country. This index is important in terms of benchmarking land prices in rural and semi-urban areas and serves as a reliable source that will indicate the potential conversion of agricultural land into real estate.
Unlike financial assets, developing an index for land parcels is a complex task. This is due to visible price differences across different listings due to several factors, including supply-demand factors.
ISALPI is put together using a regression-based hedonic pricing methodology. In this method, price is usually the dependent variable and other features are independent variables. It addresses inequities and ensures accuracy. The Mishra Center for Financial Markets and Economy at IIMA will host the index on its website.
“With just over 200 million hectares, India has 2% of the world’s croppable land, but feeds more than 15% of the world’s population. Recently, we have seen a surge in entrepreneurial interest in farmland and allied businesses: from agricultural engineering to precision farming, food technology to supply chain management and green energy. We believe this is the right time for India to launch such an index,” said Professor Errol D’Souza, IIMA Director.
Currently, ISALPI is based on land listing data from Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu, Telangana and Uttar Pradesh. Data from other states will be added soon.
The index can benefit policy makers, local governments, environmentalists, investors, real estate developers and financiers. For example, the index can be used by local governments to compensate people who lose land to highway expansion.
“SFarmsIndia focuses on data warehousing and mining, with an aim to bring agri-realty domain-specific AI capabilities to the market. The collaboration with IIMA to develop Agricultural-Land Price Index (ISALPI) is a step in this regard,” said Kamesh Mupparaju, CEO, SFarmsIndia.