Buying a farm is a major investment, and the amount can vary considerably depending on a number of factors. This article aims to provide an overview of the main factors to be taken into account when estimating the cost of a farm in France.
Land can make up the largest part of a farm's value. Land prices vary greatly depending on the region and the type of crop.
In 2024, here are some examples of average prices per hectare for agricultural land and meadows available for sale:
It is important to note that these land prices can vary considerably within the same region. In the Var, for example, prices can reach €80,790 per hectare in certain fruit-growing areas.
Several factors have an impact on the value of agricultural land:
Leasing land is one way of reducing the purchase price of agricultural property. If the owner wishes to sell, it is possible to call on private investors or land portage solutions to take over.
The cost of farm buildings varies considerably depending on their type, condition and use. A distinction can be made between :
The price of buildings depends on a number of factors:
It is difficult to give precise figures without a case-by-case assessment. However, it can be estimated that buildings generally represent between 20% and 40% of the total value of a farm.
As well as land and buildings, a farm includes other assets that are essential to its operation:
The fleet of equipment can represent a substantial investment. It includes :
The value of the equipment depends on its age, state of repair and modernity.
For livestock farms, livestock is an important asset. Its value varies according to :
Stocks of agricultural products, inputs (seeds, fertilisers, animal feed) and miscellaneous supplies must also be taken into account in the valuation.
In some sectors, such as winegrowing, the value of wine stocks can be very high, representing several years' sales.
Certain intangible elements can have a significant value:
The total assets to be acquired can therefore represent significant capital.
Valuing a farm is a complex exercise that often requires the involvement of experts. Several methods are generally used by sellers:
This approach is based on the latest balance sheet, replacing book values with market values reflecting the current market. It takes into account all the farm's assets: land, buildings, equipment, livestock, stocks, etc.
The asset-based method is preferred by sellers when the farm for sale can be sold asset by asset: the land to neighbours, the equipment and livestock one by one, the house and buildings to private individuals, etc.
This method assesses the potential profitability of the farm through Gross Operating Profit (EBITDA). EBITDA must cover bank repayments, private contributions and a safety margin (generally estimated at 10%).
The economic value is predominant when the farm business does not include assets that can be sold separately, and when the facilities (buildings, equipment) are highly specialised and cannot be used for another type of project.
Example: It would be difficult to use an industrial henhouse or a glass greenhouse for market gardening for another activity. As a result, the value of these buildings will be directly linked to their ability to generate income.
Although less widely used due to the lack of reliable benchmarks, this method involves comparing the farm to be valued with similar farms that have recently been sold.
Logically, the selling price for the seller should be a combination of these different approaches in order to obtain the fairest possible valuation and to remain financeable for a buyer.
The average cost of a farm varies considerably depending on the type of production. Certain types of production attract more buyers, such as arable farms (cereals, oilseeds, protein crops, etc.) to the detriment of livestock farming. This results in higher purchase prices in arable regions and lower prices in livestock regions.
In addition, the types of production envisaged for a farm start-up require a greater or lesser number of assets, which leads to wide disparities in purchase prices.
A market-garden farm can operate with just a few hectares of land and relatively inexpensive facilities, such as tunnels and small farm equipment.
On the other hand, a field crop farm must have a minimum surface area in order to be viable, which requires significant basic investment in land, storage buildings, equipment, etc.
The same applies to pig and dairy farming, which requires large buildings, lots of equipment and livestock, etc.
In arboriculture, the cost of planting trees often represents more than €30,000 per hectare. Taking over the land will therefore quickly represent a significant capital outlay.
Buying a farm presents a number of challenges for potential buyers:
The high cost of farms makes them difficult to buy, especially for young farmers. Banks often require a significant personal contribution and solid guarantees. Other financing solutions should be considered.
It is difficult to know the real price of local agricultural transactions. Each sale is different and involves a wide variety of elements. This opacity makes comparisons complex. Buyers often have to rely on expert estimates rather than actual transaction prices.
Purchasers must assess the farm's capacity to generate sufficient income to cover operating costs, repay loans and ensure a decent standard of living for the farmer and his family.
As part of a project to set up a farm with start-up aid, the prospective buyer must draw up a business plan (PE), which is a budget forecast over several years to ensure the future economic equilibrium of the project.
A buyer's approach is often diametrically opposed to that of the seller, who wants to sell his assets at market prices. The question of the right price is therefore difficult to resolve.
The transfer of a farm is subject to various regulations, particularly in terms of town planning, the environment and rural law. Purchasers must ensure that the farm complies with these standards.
In certain regions or for certain types of farm, competition between potential buyers can be strong, pushing up prices.
The value of a farm depends on many factors: location, type of production, size, equipment, etc. A precise valuation requires the intervention of experts and the consideration of multiple criteria.
On our site, you'll find small farms for as little as €100,00, while the most expensive are worth several million euros.
Potential buyers also need to consider the future profitability of the farm and their ability to repay to ensure that their project is viable.
