How do you put a price on something that’s still growing, still changing — something alive?

It might sound like a strange question, but that’s exactly what IAS 41 – Agriculture asks us to do. Whether it’s a dairy cow, a bunch of bananas, or a patch of tea bushes, if you’re in the agriculture business, you’re expected to assign them a value — not just once, but continuously.

IAS 41 requires that biological assets — living plants and animals — be measured at fair value less costs to sell. That means we can’t just record how much we paid for them or what they cost to raise. We have to estimate what they’d sell for today, in an active market, minus the costs it would take to get them sold.

The idea behind this is good: show the real economic value of what’s growing on your farm or in your greenhouse. In theory, it gives investors, lenders, and owners a more up-to-date picture of the business. But in practice, especially in East Africa, applying this standard is anything but simple.

For starters, agriculture is unpredictable. Prices swing with weather, global demand, pests, and disease. A fair value that looks accurate today could be completely off in a week. And when those changes hit your financial statements, it can make your business look like it’s doing worse — or better — than it really is. Even when nothing’s changed in your cash flow, your numbers on paper can jump or drop dramatically.

Then there’s the issue of market visibility. If you’re growing something like maize or raising broiler chickens, there may be some price benchmarks available. But if you're dealing with indigenous breeds or niche crops, how do you find a reliable “market price”? Often, you don’t. Farmers and agribusinesses are left to estimate — maybe using auction prices from nearby towns, cooperative rates, or even their best guess. That’s a lot of grey area in a space that’s meant to be black and white.

And let’s talk about capacity. Fair value accounting requires good records, access to data, and technical skill. But many farmers and smaller agribusinesses don’t have those resources. They’re focused on production, not valuation theory. For them, IAS 41 can feel like a regulatory headache — another task that adds work without adding value.

Still, there are workarounds. Grouping livestock into categories — say, calves, dairy cows, and bulls — and applying an average value to each group can simplify things. Some larger businesses use cash flow models to project future earnings from a tree or animal, then calculate its present value. And in rare cases, when fair value truly can’t be measured reliably, IAS 41 allows fallback to cost. But that should be the exception, not the go-to.

If we want IAS 41 to actually work for real people — especially the farmers who feed our region — we need more support. That means simplified templates, accessible training, and region-specific price indexes that reflect our markets. It also means listening to the people this standard impacts the most.

Because at the end of the day, IAS 41 isn’t just about numbers. It’s about making the value of agriculture visible — in a way that’s fair, practical, and grounded in reality.

So yes, how much is a cow really worth? The answer might depend on the day, the market, or the method. But with the right tools and some common sense, we can get closer to a number that actually makes sense.