-2- 



A producing orchard should meet all of the above tests plus having a record 

 of high yields annually. 



A declining orchard presents some additional problems. The property may have 

 value for other uses. In this case the suitability of the soils for other crops 

 becomes important and the cost of converting the orchard site for other uses becomes 

 an item. If the reduced yields represent the start of a rather long period of 

 declining yields, yield levels may still be such that continued operation is in- 

 dicated and possible rehabilitation may be a consideration. 



It is important in arriving at a value for a sales price to deteirmine the 

 stage of the orchard and then proceed to place a value on it by using all three 

 of the generally accepted methods of determining value. 



(1) Values based on net income capitalization or "earning value." 



(2) Values based on comparison with other property which has changed 

 hands or where values have been established. 



(3) Value based on reproduction cost. 



Usually a sound answer to the question 'What is my orchard worth?' can be 

 reached by considering all three of these and balancing them against each other to 

 determine a basic value. The actual sales value would then be adjusted by compari- 

 son with sales prices of similar properties in the area. 



The American Society of Farm Managers and Rural Appraisers have defined 

 Present Market Value as follows: 



"It is the price at which, within a reasonable time and with a substantial 

 down payment, the property may be expected to change hands from a willing, able 

 and informed seller to a desirous, able and informed purchaser." 



The problem of determining value under condemnation or land taking for public 

 use is somewhat different from that of determining value for a sales price or 

 present market value. 



Taking private property for public use upon payment of just compensation is 

 condemnation. The legal basis is called the "right of eminent domain." Under this 

 procedure the people or the government take private property for public use when 

 public needs cannot be provided for in some other manner. 



The requirement that no person shall be deprived of private property without 

 just compensation is a part of the "right of eminent domain." The courts by their 

 decisions have varied in just what is "just compensation." 



Under the "right of eminent domain" it follows that the injured party who is 

 entitled to "just compensation" has the responsibility of deteirmining values. The 

 fact that the owner prefers the particular property to scrne other does not mean 

 that he is thereby entitled to additional compensation. Legal precedent and usage 

 have tended to favor the property owner. 



In general, courts have held that market value is the gui(fe to be followed in 

 determining awards and further, again in general, the measure to be used in deter- 

 mining damages in condemnation cases is market value. 



