Annual Cash Flow Research Articles

Long fallows can maintain whole-farm profit and reduce risk in semi-arid south-eastern Australia

The practice of leaving a paddock out of production for an entire growing season, known as long fallowing, is used to accumulate soil water and mineral nitrogen (N) and break disease cycles in low-rainfall environments where in-crop rainfall is unreliable. This study used whole-farm economics and rule-based crop simulation at a site in the grain-growing Mallee region (300–350mm annual rainfall) of south-eastern Australia to determine if long fallowing could be used to reduce production risk and maintain profit by reducing input costs. The Agricultural Production Systems sIMulator (APSIM) was used to model crop production on a hypothetical 4000-ha property over 20 years. Three fixed rotations (continuous wheat, wheat-chickpea and wheat-fallow) were managed as whole-farm systems, with unique soil water-based fertiliser rules for each rotation and a sowing window designed to reflect the improved timeliness of operations associated with reducing cropped area. Two flexible rule-based sequences were also created, where long fallow replaced a crop if plant available water and mineral N thresholds were not met at sowing. APSIM outputs were used for whole-farm economic analyses and to assess the returns and risks of each farming system. Converting 50% of a continuously-cropped wheat farm to fallow increased average annual net cash flow by 44% and decreased the variability of inter-annual profit by 49%. A long fallow-wheat rotation was more profitable than a chickpea-wheat rotation when chickpea prices were below $AUD800/t. Wheat production that incorporated long fallowing into the system when there were less than 100 water-nitrogen units at sowing was the most profitable system, increasing average net cash flow by 63% compared to continuous wheat production.

Perencanaan Dan Analisis Ekonomi Pembangkit Listrik Tenaga Surya (PLTS) Terpusat Untuk Desa Mandiri

Solar cell or photovoltaic became one of the renewable energy which has great potential to be applied in Indonesia. Kaliwungu used communal photovoltaic system source of electrical energy., used load data in Kaliwungu to determined the capacity solar systems (photovoltaic array, battery, charge controller, and inverter), the potential reduction of carbon dioxide emissions, cost, and economic analysis. Economic analysis is used to evaluated the continuity of the photovoltaic system. Analysis used several methods NPW (Net Present Worth), ACF (Annual Cash Flow analysis), B-CR (Benefit-Cost Ratio analysis), FW (Future Worth analysis), and PP (Payback Period). Calculated used software MATLAB 2008a. The result shows to supply the daily load at 8,922 kWh can be supplied from the photovoltaic system with a capacity up to 2,85 kWp, battery at 464,678 Ah, charge controller up to 60 A, and the inverters at 3500 W. For the potential carbon dioxide emissions reduction up to 3,640 ton CO2. The value Rp -266.351.000,00 for NPW, Rp -23.894.600,00 for ACF, Rp 714.063.000,00 for FW, B-CR was 0.3850, and 29 years for PP.

Performance of Channel Catfish and Hybrid Catfish in Single‐Batch, Intensively Aerated Ponds

AbstractA pond production trial was conducted to evaluate the economics of raising Channel Catfish Ictalurus punctatus in intensively aerated ponds operated under the single‐batch cropping system. Channel Catfish fingerlings averaging 0.09 lb were stocked at 6,000, 8,000, 10,000, and 12,000 fish/acre with six replicate ponds (1 acre) per treatment. A treatment of hybrid catfish (♀ Channel Catfish × ♂ Blue Catfish I. furcatus) fingerlings stocked into five replicate ponds at 12,000 fish/acre was concurrently evaluated to compare the economic performance of hybrids and that of Channel Catfish. All ponds were provided with a fixed‐paddlewheel aerator (10 hp/acre) and were fed once daily to apparent satiation for 206 d. For Channel Catfish, the gross yield ranged from 6,562 to 9,039 lb/acre, showing nominally linear trends of increasing yield with stocking density. However, the same trend was not seen in the relationship between costs and stocking density: the highest breakeven price (US$1.07/lb) was associated with the lowest density treatment (6,000 fish/acre), and the least cost ($0.96/lb) was associated with the intermediate density of 8,000 fish/acre. Average annual net cash flows from all Channel Catfish treatments were insufficient to make the investment in intensive aeration profitable in the long run (10 years). The hybrid catfish treatment (12,000 fish/acre) outperformed all Channel Catfish treatments in terms of yield (17,542 lb/acre), which offset some of the fixed costs associated with intensively aerated ponds and resulted in a lower cost of production ($0.85/lb) and better long‐term returns (17%). This study indicated that Channel Catfish do not perform well—either biologically or economically—at densities greater than 8,000 fish/acre in single‐batch, intensively aerated ponds. The study reflects current industry trends, where integrated farms (farms with their own processing plants) with yield‐maximizing business objectives prefer raising hybrid catfish in single‐batch systems, while nonintegrated farms prefer raising Channel Catfish in multiple‐batch systems.

Medium-Term Debt Management Strategy: Analytical Tool Manual

This report provides guidance on using the Analytical Tool of the Medium-Term Debt Management Strategy (MTDS). The MTDS framework consists of a methodology, published as the ‘Guidance Note for Developing a Medium-Term Debt Management Strategy’, and an associated analytical tool (AT) that can be used to assess the cost-risk trade-offs of alternative strategies to help identify the preferred strategy. The MTDS framework supported by the AT quantitative analysis helps to determine the financing strategy. The chosen debt management strategy sets out the financing composition path to meet the debt management objective(s). The profile of future interest payments and the amortizations of new debt are driven by the debt management strategy. The MTDS AT is based on annual cash flow. Although this assumption is enough for analyzing alternative debt management strategies, in some cases, particularly for countries that are heavily dependent on short-term securities with maturities of less than a year, it would be helpful to work with cash flows with higher frequency.

Description, evaluation, and validation of the Teagasc Pig Production Model1.

The Teagasc Pig Production Model (TPPM), a stochastic simulation model of a farrow-to-finish pig farm, was developed to investigate effects of changes in production systems on farm profitability. The model simulates, on a weekly basis, the annual production of a farm. Biological [e.g., herd size, number of litters/sow/year, and mortality rates (%)], physical (e.g., infrastructure), and technical (e.g., feeding practices) variables and their associated costs are included as components of the model. These inputs are used to calculate physical (e.g., feed usage and number of pigs slaughtered) and financial (e.g., annual cash flow, profit and loss account, and balance sheet) outputs. The model was validated using the Delphi method and by comparing the TPPM outputs to data recorded on 20 Irish pig farms through the Teagasc e-Profit monitor system and with complete receipts for the year 2016. Results showed that the TPPM closely simulates physical and financial performance of pig farms indicating that the TPPM can be used with confidence to study pig production systems under Irish conditions. Model applicability was demonstrated by investigating the impact of 2 changes in technical performance: 1) building of extra accommodation to increase body weight (BW) at sale by 15 kg (EXTRA ROOM) and 2) a change in feeding practices by providing finisher feed from 28 kg of BW (EARLY FINISHER) compared with over 38 kg of BW. In both scenarios, the same biological parameters were used. Mortality rates, feed ingredients costs, and price per kg of meat produced were included as stochastic variables with the input distributions derived based on historical data simulated using Monte Carlo sampling using the Microsoft Excel add-in @Risk. Annual mean net profit was €198,101 (90% confidence interval [CI]: €119,606-€275,539) for the TPPM base farm, €337,078 (90% CI: €246,320-€426,809) for the EXTRA ROOM, and €225,598 (90% CI: €146,685-€303,590) for the EARLY FINISHER. EXTRA ROOM was associated with higher costs and required higher income to cover the additional costs. The 90% CI of the EARLY FINISHER was similar to the TPPM base farm while the EXTRA ROOM scenario resulted in a wider confidence interval, suggesting that a change in feeding practices could be a better option for farmers looking to improve profit with minimum investment. Thus, the TPPM could be used to facilitate decision making in farrow-to-finish pig farms.

Improving development efficiency through decision analysis: Reservoir protection in Burkina Faso

In the arid areas of Sub-Saharan Africa, perennial challenges of water scarcity and food insecurity are exacerbated by climate change and variability. The development of robust strategies to cope with the region's climatic challenges requires thorough consideration of uncertainty and risk in decision making. We demonstrate the use of probabilistic decision analysis to compare intervention options to prevent reservoir sedimentation in Burkina Faso. To illustrate this approach, we developed a causal impact pathway model based on the local knowledge of expert stakeholders. Input parameters were described by probability distributions derived from estimated confidence intervals. The model was run in a Monte Carlo simulation to generate the range of plausible decision outcomes, quantified as the net present value and the annual cash flow. We used Partial Least Squares regression analysis to identify the parameters that most affected projected intervention outcomes and we computed the Expected Value of Perfect Information (EVPI) to highlight critical uncertainties. Numerical results show that the preferred intervention to secure agricultural production is a combination of dredging, rock dams and a buffer scheme around the reservoir. The EVPI calculation reveals an information value for the profit per ton of vegetables, indicating that more information on this variable would be useful for supporting the decision. However, without the need for follow-up analysis, the results show high probability of benefits given the combined interventions, which, given the current state of information, should be preferred over inaction.

Зерновой экспорт как фактор устойчивого развития сельских территорий Омской области

In response to the current devaluation of the ruble, the Russian Government takes measures to support exporters. Thus, the most important factor of sustainable development of rural territories is their commitment to export, which explains the relevance of the present research that features the problems and top trends of grain export in the Omsk region. The theoretical part of the study develops the concept and properties of sustainable development of rural territories, its dependence on the efficiency of agricultural producers, and the situation in the Omsk region. The survey part of the paper investigates the grain export in 2015–2017: the share of the Omsk region in Russian grain export; the share of grain export in the total volume of export sales the dynamics of grain export and a review of factors of influence; a structural and dynamic analysis of various exports; assessment of wheat export structure by types and categories; a survey of channels of distribution of export grain (geography); an analysis of the logistic factors that limit export operations. The authors stress the positive influence of grain export on the uniform distribution of annual cash flows among the producers, which reduces the seasonal character of grain production. The trends can be explained by the specifics of grain crops, Russia’s foreign trade policy, and the logistic opportunities of the Omsk region. Sustainable development of the region requires a higher volume of grain export, which directly depends on the wellbeing of agricultural enterprises and farms. In general, the export potential of the Omsk region will contribute to the sustainable development of its rural territories. The research results can be used in various studies connected with grain export planning and sustainable development of rural territories.

Medium-Term Debt Management Strategy: Analytical Tool Manual

This report provides guidance on using the Analytical Tool of the Medium-Term Debt Management Strategy (MTDS). The MTDS framework consists of a methodology, published as the ‘Guidance Note for Developing a Medium-Term Debt Management Strategy’, and an associated analytical tool (AT) that can be used to assess the cost-risk trade-offs of alternative strategies to help identify the preferred strategy. The MTDS framework supported by the AT quantitative analysis helps to determine the financing strategy. The chosen debt management strategy sets out the financing composition path to meet the debt management objective(s). The profile of future interest payments and the amortizations of new debt are driven by the debt management strategy. The MTDS AT is based on annual cash flow. Although this assumption is enough for analyzing alternative debt management strategies, in some cases, particularly for countries that are heavily dependent on short-term securities with maturities of less than a year, it would be helpful to work with cash flows with higher frequency.

Application of Optimization Principle in Landmark University Project Selection under Multi-Period Capital Rationing Using Linear and Integer Programming

The current structure of Landmark University (LU) was induced by raising a generation of solution providers through a qualitative and life-applicable training system that focuses on values and creative knowledge by making it more responsive and relevant to the modern-day demands of demonstration, industrialization and development. The challenge facing Landmark University is the question of which of its numerous projects they should invest to give maximum output with minimum input. In this paper, we maximize the Net Present Value (NPV) and maintain the net discount cash overflow of each project per period as contained and extracted as the secondary data of cash inflows of the Landmark University (LU) monthly financial statement and annual reports from 2012 to 2017 of which the documents have been regrouped as small and large scale projects as many enterprises make more use of the trial-and-error method and as such firms have been finding it difficult in allocating scarce resources in a manner that will ensure profit maximization and/or cost minimization with a simple and accurate decision making by the company through an optimization principle in selecting LU project under multi-period capital rationing using linear programming (LP) and integer programming (IP). The annual net cash flow which is the difference between the cash inflows and cash outflows during each period for the project was estimated and recorded. The discount factors were estimated at cost of capital of 10% for each cash flow per period with the corresponding NPV at 10% which revealed that the optimal decision achieves maximum returns of $110 × 102 and this assisted the project manager to select a large number of the variable projects that can maximize the profit which is far better than relying on an ad-hoc judgmental approach to project investment that could have cost 160 × 102 for the same project. Sensitivity analysis on the project parameters are also carried out to test the extent to which project selection is sensitive to changes in the parameters of the system revealed that a little reduction and or addition of reduced cost by certain amount or percentages to its corresponding coefficient in the objective function effect no changes in the shadow prices with solution values for variables (x1), (x4), (x5) and the optimal objective function.

Economic evaluation of transplant robots for plant cuttings

Transplanting of unrooted plant cuttings to produce rooted liner trays is a manufacturing process that requires considerable manual labor. However, increasing labor cost and reduced labor availability has increased interest in automation. The objective was to evaluate return on investment of transplanting robots, and identify key factors that businesses should consider when purchasing a transplanting robot. Data on labor costs, cuttings transplanted, and costs of automated transplanting were surveyed at six greenhouse firms. The resulting average scenario assumed an annual labor cost of $408,377 to manually transplant 29.3 million (M) cuttings at $12.49 per hour, resulting in a cost of $0.014 per cutting. An investment of $125,000 in one transplant robot operated for up to 76 h per week (2 shifts) had an annualized cost of $70,270 ($6,250 cost of ownership and $64,020 labor cost for robot operators). The robot could transplant 7.2 M cuttings per year (25% of the total), at an average cost of $0.010 per cutting compared with $0.014 for manual transplanting. With these assumptions, over 10 years the transplant robot would yield an annual cash flow saving of $29,891 a Net Present Value (NPV) of $105,807 and a discounted payback period of 4.8 years. Each transplant robot would reduce labor requirements during the peak week by two full time equivalent workers (3% of total workforce). Sensitivity analysis showed investment in automatic transplanting was increasingly profitable with a high local wage, and low manual labor efficiency (few cuttings per workers). There were economies of scale when more than one robot was used. Greater efficiency resulted from increasing hours of robot operation during the peak period, and in operations where cuttings were transplanted throughout the year. Results can be used to evaluate the impact of automation on labor cost and availability for the transplant process.

Institutional Investors and Corporate Governance: The Incentive to Be Engaged

This paper studies institutional investors’ incentives to be engaged shareholders. We measure incentives as the increase in an institution’s management fees when a stockholding increases 1% in value, considering both the direct effect on assets under management and the indirect effect on subsequent fund flows. In 2017, the average institution gains an extra $129,000 in annual cash flow if a stock in its portfolio rises 1%. The estimates range from $19,600 for institutions’ investments in small firms to $307,600 for their investments in large firms. Institutional shareholders in one firm often gain when the firm’s competitors in the industry do well, by virtue of institutions’ holdings in those firms, but the impact of common ownership is modest in the most concentrated industries.

Risk-assessment V1.0: A new interactive software to develop risk assessment using MATLAB®

This article presents the use of an interactive computer tool developed in MATLAB® called RISK-ASSESSMENT v1.0, to perform market risk analysis of commercial products, through the development of cash flow, sensitivity analysis, and SpiderPlot graphics, which allow the identification of the economic-financial equilibrium point of a company. The tool facilitates the reduction of the uncertainty produced in the return on investment due to changes in the economic environment of the sector in which the company operates, through statistical techniques and tools that involve parameters such as the annual effective rate in the Colombian national currency, net present value, internal rate of return, period of recovery of capital, through a sensitivity analysis. To validate the effectiveness of using software in the development of risk analysis, a case study was conducted for an alcohol beverage sales business, where, based on the portfolio containing the product quantity, unit variable cost, sales price, percentage of sales growth and annual sales volume, in addition to detailed information on the initial investment, the cash flow with a 5-year horizon, the net present value, the internal rate of return, the period of capital recovery and the average accounting profitability are calculated. The tool also performs sensitivity analysis and SpiderPlot for each of the products. Finally, the program presented allows to calculate the annual cash flows in a fast and didactic way, which normally requires time and specialized training in a traditional exercise.

Economics of alternative catfish production technologies

The US catfish industry has shown increasing trends toward intensification of production as a means of achieving cost efficiencies on farms. Previous studies depicted the potential for cost efficiencies in alternative technologies such as split‐pond systems, intensively aerated ponds, and in‐pond raceway systems. This study provides an economic comparison of these systems under a uniform set of economic assumptions using a standard enterprise budget analysis. Cost of production of hybrid catfish raised in these systems ranged from $2.03 to $2.91/kg, the highest cost being that of in‐pond raceways and the lowest from split ponds. Positive annual net cash flows from split‐pond systems and intensively aerated ponds were sufficient to make the investment profitable. Cumulative effects of high investment cost (high annual fixed costs), poor survival, and lower yields from the in‐pond raceway systems made it economically infeasible. However, the feed conversion ratio (FCR) was the best among these technologies. Risk analysis showed stochastic dominance of intensively aerated ponds and split‐pond systems over in‐pond raceway systems. Variations in catfish price, yield, and FCR were the major contributors to economic risk. Implementing combinations of intensively aerated ponds and split‐pond systems should be viewed as a strategy to respond to production and market needs.

Financial Viability of Emergency Department Observation Unit Billing Models.

Outpatients receive observation services to determine the need for inpatient admission. These services are usually provided without the use of condition-specific protocols and in an unstructured manner, scattered throughout a hospital in areas typically designated for inpatient care. Emergency department observation units (EDOUs) use protocolized care to offer an efficient alternative with shorter lengths of stay, lower costs, and higher patient satisfaction. EDOU growth is limited by existing policy barriers that prevent a "two-service" model of separate professional billing for both emergency and observation services. The majority of EDOUs use the "one-service" model, where a single composite professional fee is billed for both emergency and observation services. The financial implications of these models are not well understood. We created a Monte Carlo simulation by building a model that reflects current clinical practice in the United States and uses inputs gathered from the most recently available peer-reviewed literature, national survey, and payer data. Using this simulation, we modeled annual staffing costs and payments for professional services under two common models of care in an EDOU. We also modeled cash flows over a continuous range of daily EDOU patient encounters to illustrate the dynamic relationship between costs and revenue over various staffing levels. We estimate the mean (±SD) annual net cash flow to be a net loss of $315,382(±$89,635) in the one-service model and a net profit of $37,569(±$359,583) in the two-service model. The two-service model is financially sustainable at daily billable encounters above 20, while in the one-service model, costs exceed revenue regardless of encounter count. Physician cost per hour and daily patient encounters had the most significant impact on model estimates. In the one-service model, EDOU staffing costs exceed payments at all levels of patient encounters, making a hospital subsidy necessary to create a financially sustainable practice. Professional groups seeking to staff and bill for both emergency and observation services are seldom able to do so due to EDOU size limitations and the regulatory hurdles that require setting up a separate professional group for each service. Policymakers and health care leaders should encourage universal adoption of EDOUs by removing restrictions and allowing the two-service model to be the standard billing option. These findings may inform planning and policy regarding observation services.

Stochastic orebody modelling and stochastic long-term production scheduling at the KéMag iron ore deposit, Quebec, Canada

Stochastic optimisation provides a framework that is capable of generating a strategic life-of-mine production schedule that increases net present value while simultaneously reducing the risk associated with geological uncertainty. This paper focuses on the application of the stochastic strategic mine planning for technical risk management in the KéMag iron ore deposit in Quebec, Canada, demonstrating the key steps of the framework. The approach first quantifies both the volumetric and multi-element grade uncertainty of the deposit by generating a set of equally probable scenarios of the orebody. In this case study, the boundaries of the lithologies (volumetric uncertainty) defining the KéMag iron ore deposit are generated using a pattern-based wavelet simulation algorithm. The pertinent grade properties, namely, head iron, Davis Tube weight recovery, Davis Tube concentrate iron and silica content (multi-element grade uncertainty) are jointly simulated using the direct block minimum/maximum autocorrelation factors algorithm. Subsequently, the simulated scenarios of the iron deposit serve as an input to a life-of-mine stochastic integer programming production-scheduling model. The latter stochastic optimisation model is employed to manage and minimize the risk associated with the geological uncertainty of the deposit in terms of meeting production targets while generating a mining sequence of extraction maximising the net present value. The results of the case study quantify the risk associated with the product’s silica content, total iron production and expected discounted annual cash flows.

Power Grid Investment Strategy and Risk Analysis Under the Reform of Transmission and Distribution Price

Power grid investment is the prerequisite of power grid development, which is influenced by various uncertainties. Power system reform introduced the new transmission and distribution pricing mechanism, and changed grid companies’ operation and profit model. The system dynamic model of grid investment is established, and grid investment variation tendency under the interaction with transmission and distribution price, demand, regulation and so on is analyzed. The investment risk with the uncertainty of demand, construction cost and regulation is analyzed using annual cash flow method. The sensitivity analysis of uncertain factors is made through simulation, and the model rationality is verified. Scenes are generated by combining different values of uncertain factors, the variance of annual cash flow at different scenes is calculated to access the risk.

CO2-free coal-fired power generation by partial oxy-fuel and post-combustion CO2 capture: Techno-economic analysis

Among the carbon capture and storage (CCS) technologies suitable for power generation plants, partial oxy-combustion coupled with post combustion CO2 capture is gaining interest, since such a hybrid configuration could allow to reduce the size and enhance the performance of post-combustion CO2 capture by operating combustion with air enriched with oxygen and reducing the dilution of flue gas. Moreover, partial oxy-combustion is a potential candidate for the retrofit of existing steam plants because it could be based on an almost conventional boiler and requires a smaller CO2 capture section.This work presents the results of a comparative techno-economic analysis of a 1000 MWth partial oxy-combustion plant based on an ultra-supercritical pulverized coal combustion power plant integrated with a post-combustion CO2 capture system and geological storage in saline aquifer. In particular, plant performance is assessed by using simulation models implemented through Aspen Plus 7.3 and Gate Cycle 5.40 commercial tools, whereas economic performance are evaluated on the basis of the expected annual cash flow. The analysis shows that, for new plants, this hybrid approach is not feasible from the economic point of view and full oxy-combustion potentially remains the most profitable technology even if, in the short-term period, the lack of commercial experience will continue to involve a high financial risk.

Economic Valuation of Ground Mounted Photovoltaic Systems

The appraisal of ground mounted photovoltaic systems is an important question, due to increasing investments in renewable energies. The costs related to installation and maintenance, and the economic benefits related to the energy saving, suggests the use of an income approach, in order to consider the financial aspects of the photovoltaic systems. This paper proposes the use of the Discounted Cash Flow Analysis (DCFA). The DCFA allows to simulate the entire life cycle of the photovoltaic system, from the acquisition date to the end of its life cycle, to evaluate the most probable market value by discounting the annual cash flows generated by the system. In particular, the paper proposes a procedure to determine the discount rate in an innovative manner through the combination of a conventional financial method (the Build up Approach) and the analytical method which makes recourse to the use of the ascending and descending influences that act, each with positive or negative sign, on the specific risk factors related to the photovoltaic investment. To obtain an objective appraisal of the discount rate, the theory of the ascending and descending influences has been applied in this specific case for the calculation of the risk premium. The percentage incidences of the ascending and descending influences, which influence the formation of the risks to which they refer, are determined through this study for all the intrinsic factors, which are part of the photovoltaic investment risks.

Analysis of survivorship life insurance portfolios with stochastic rates of return

A general portfolio of survivorship life insurance contracts is studied in a stochastic rate of return environment with a dependent mortality model. Two methods are used to derive the first two moments of the prospective loss random variable. The first one is based on the individual loss random variables while the second one studies annual stochastic cash flows. The distribution function of the present value of future losses at a given valuation time is derived. For illustrative purposes, an AR(1) process is used to model the stochastic rates of return, and the future lifetimes of a couple are assumed to follow a copula model. The effects of the mortality dependence, the portfolio size and the policy type, as well as the impact of investment strategies on the riskiness of portfolios of survivorship life insurance policies are analyzed by means of moments and probability distributions.

Financial mechanism of state land regulation in Ukraine

The paper is devoted to research of existing variants of land reform in Ukraine towards cancelling the moratorium on the sale-purchase of agricultural lands. The authors prove that the financial function of the land is realized insufficiently, which is connected with the absence of open land market and ineffective functioning of state land regulation financial mechanism. The aim of the paper is to substantiate the directions of state land regulation in Ukraine on the basis of evaluating the economic effect of cancelling the moratorium on the sale-purchase of agricultural lands. The authors analyzed three most likely variants of land reform at the current stage of Ukraine’s economy development, and calculated economic effect from its implementation. Based on the calculations, conclusion is made about the feasibility of gradually cancelling the moratorium, which corresponds to third variant under study, which is offered to be implemented in two stages: 1) sale of state and community lands; 2) sale of private lands. Economic effect of implementing such a variant, calculated by the authors, gives a possibility to create additional annual cash flow to local budgets in the amount of 68-83 %, which is more than the revenue of other variants described in the paper. It is proven that for possibility to put the variant offered into practice, it is necessary to observe some prerequisites (organizational, financial, legal and regulatory), valuation of which enabled to offer the directions to improve state land regulation, the realization of which would favor the full functioning of agricultural land market.