Which factor is key in affecting land value in agriculture?

Soil quality and productivity potential are crucial factors in determining land value in agriculture because they directly influence what can be grown on that land and how much yield can be expected. High-quality soil that has favorable physical and chemical properties will support healthier crops and higher yields, making it more desirable and valuable to farmers and investors. Areas with productive soil can command higher prices because they represent better investment opportunities for agricultural production.

While national agricultural policy, access to transportation routes, and the size of the farm operation can also impact land value, they tend to have a more indirect or secondary effect compared to the intrinsic quality of the soil itself. For instance, good soil can yield profitable crops regardless of transportation access, and while policies may influence farming decisions, they can't change the fundamental characteristics of the land. Hence, the productivity potential associated with soil quality remains one of the most critical determinants in assessing the economic value of agricultural land.