The Most Expensive Agricultural Land Prices in Europe: An Economic Analysis of Tenerife, Canary Islands, Spain

Abstract

Agriculture in the Canary Islands has greater limitations than in the rest of Spain due to the cultivation areas being geographically limited and the abrupt orography of the archipelago. As a result, in certain situations, tillage of the land is more complex and costs increase. This study focuses on the island of Tenerife and aims to identify the determining variables that directly affect the price of agricultural land, considering the type of crop. For this purpose, a survey was designed for farm managers on the island of Tenerife and, after analysing the responses, we focused on tubers, legumes, vineyards, bananas, and cereals. A multilinear regression model showed that the highest land price corresponds to those farms destined for banana production, with a value of 16.52 €/m2. The price of agricultural land on the island of Tenerife was found to be eight times higher than the European average. The main factors impacting this value are irrigation, the orography of the land, and the presence of farm buildings.