Farmland Prices in a Developing Economy: Some Stylised Facts and Determinants

Abstract

The study constructs a district and state level series of farmland prices using the village level data from MIMAP-India survey and identifies the major determinants of farmland prices. The estimates at micro level showed that density of population in the rural areas, food grain yield and distance from the nearest town were the major determinants of farmland prices. When macro variables were added at the All India level, it was found that density of rural population, road density and share of non-agriculture in GDP as well as in work force affected farmland prices positively while rural poverty affected them adversely. The results appear to have implications for urban planning, industrial location and various government programs for rural development and poverty alleviation.