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over which agricultural use of the land is expected to continue
would probably be much less than Cobb estimates. Moreover, the
value of the land for residential use would not decline with
moderate amounts of topsoil loss, because less topsoil is needed
for this purpose. Maschmeyer himself, through careful and
well-informed calculations submitted for the record, estimated
that $9,125 per year would compensate him for soil depletion.
This represents only 1.05 percent of the fair market value
determined by Cobb.
More importantly, Cobb’s analysis fails to take into account
changes in land value. If one measured the return from corporate
stock solely in terms of dividend yield, one would not be able to
explain why so many investors hold stock as an alternative to
corporate bonds offering much higher coupon yields. The
investor’s total return from land is the sum of the periodic
income plus capital appreciation minus any depreciation in the
land owing to soil depletion. By omitting an appreciation
factor, Cobb’s equation overstates the amount of rent that an
investor would require.
Omission of an appreciation factor is also inconsistent with
characterization of agriculture as only an interim use, a major
premise of Cobb’s fair-market value appraisal. If the return
from the agricultural use in the form of annual rent were
sufficient to satisfy the investor, then agriculture would be the
highest and best use of the land. The phenomenon of speculative
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