The first them address in this paper is agricultural asset performance.The low rate of return on agricultural assets has been of particular interest to policy markets. From a market portfolio perspective. Several studies have analyzed the relationship between farm asset returns and systematic market factors concluding that farmland adds little systematic risk to a well
diversified portfolio. Because asset values adjust so that the return too each asset is in equilibrium with the relative risk, any persistent low return on agricultural asset may be due to deferences in the relative risk.The paper's second theme is the valuation of farmland values.
Most have use the standard present value capitalization formula relating land values to land rents,although this models have been rejected by empirical data. Serveral studies have reformulate and improved the performance of the present value models. Since changes in rate of return of agricultural asset and land values can have drastic consequences for farmers wealth and sector solvency, future research needs in this area will continue
Key word : asset performance ,farmland valuation,government subsidies