Oklahoma and Texas have lower capitalization rates due to mineral rights inflating farmland values. Given low capitalization rates, farmland values face significant interest rate risk. For example, irrigated cropland in eastern Nebraska is valued at $ per acre. A historically low capitalization rate of 5 percent is needed to rationalize this land value at current corn prices and yields (Table 1).
I have already referred to this process on other occasions, so today I will not go into further detail. I only insist that this process not only has an institutional and regulatory dimension but also it requires a multi-annual and binding programme that ensures the reduction of the public debt to GDP ratio, while setting a limit to the growth of public expenditure.