Replies to post #6522 on Sino Agro Food Inc (fka SIAF)

[Lucky Loser]

One of my previous posts went into detail on land costs. Goes to show how effective my posts remain in others' memories.

Here's a repost for those interested.

re: Land Value. There has been a lot of discussion on the price SAIF paid for property.

Here are a few of points to keep in mind when evaluating the issue.

1) In China land is owned by the government. Private parties are not permitted to hold title to land.

2) China sets floor rates at which "Land Use Rights" (LUR) are granted. These LUR rates are determined by the Province they are in.

3) Think of a 30-year or 60-year LUR as a you would a lease. When you ask is $20,000/mu (or $120,000/acre) a reasonable figure, you have to factor in the term of the lease-hold and the region it sets in.

When you break down the numbers this way, you'll find that SIAF is getting a great deal; compared to what some others in the country are paying for LUR of agriculture property.

Also, remember that raising Quality of Life standards for rural residents is the number one priority in China's new 5-year Plan.

Raising the value of agriculture property is one method China's government is using to help raise the Quality of Life status for those in rural areas, and one of the reasons why you'll pay higher LUR rates today than you would have two years ago.