Analyses Of Farmland Compensation Valuation Methods In Ghana

Subjectivity in compensation values calls for a standardised approach to ensure that the expropriated are not worse off status quo ante. The main aim of the research is to investigate and compare the effectiveness of the cost and investment methods for farmlands compulsorily acquired by the government or an acquiring authority. Structured questionnaires were administered to valuers who have been involved in the valuation of farmlands. The findings revealed that the cost method, which is the statutory mandated method of valuation to use for compulsory acquisition, generally leads to under – assessment to beneficiary landowners and farmers (interest holders). Although the method is comparatively simple to use, the possible future accruals and benefits of the crops on the land are seemingly ignored in value determination. This method may not be the best for fair and adequate estimation for farmlands values. Some valuers are of the opinion that the investment method has its own inherent setbacks, ranging from the lack of consistent data to its perceived “complicated’ nature. The research concludes that the investment method takes into consideration many more variables in addition to the land value per se than the cost method. Valuation is described as an ‘art and sceince’ that depends on the competency and diligence of the valuer. It is recommended that, if the subjectivity of valuation values is minimized, then valuers must be encouraged to update their competency through continuing professional development.