Farmland price hikes in the United States would not lead to financial troubles similar to those brought about by real estate bubbles in the past decade, an economics expert has said.

Land prices in Midwest increased 22 percent in 2011, according to a Chicago Fed Agricultural Newsletter.

The 2011 figure represented the biggest year-on-year land value increase in the Chicago Fed District since 1976. In addition, the rising farmland values contributed to a nominal record-setting year for the U.S. net farm income.

According to the latest estimates of the U.S. Department of Agriculture,the country's net farm income posted a record high of 98.1 billion U.S. dollars in 2011, up 24 percent from the previous year.

The positive figures amid a still somewhat shaky economy elsewhere have led many to fears that the farmland sector could produce a bubble similar to that in the U.S. housing market.

However, Michael Duffy, an economics professor at Iowa State University, believed that farmland does not pose the same dangers as exemplified by the U.S. housing market, although a major downturn in prices in the future would still hurt farmers.

"The situation with land is very different from the housing boom," Duffy told Xinhua.

Investment in farmland does not see the same amount of debt taken on as had happened in the housing boom, he noted.

Unlike in housing, where real estate has value but does not by itself produce any additional income, land is an asset that can earn income even if the actual value does not increase, he explained.

In a depressed housing market, in additional to falling home prices, homeowners also have to deal with a loss of income, making it even more difficult.

"Probably the biggest difference is that people buy land to own it, they don't buy land to sell it." He added that agriculture and most commodities would always settle back to "zero profits."

In a survey by Chicago Fed, 43 percent of the banks surveyed said they expected farmland values to keep rising from January through March of 2012.

However, experts are skeptical that this positive trend would continue in the long term as today's high crop prices are believed to be unsustainable.

The U.S. Department of Agriculture estimated that net farm income would fall to 91.7 billion dollars in 2012, down 8.2 percent from last year.

However, even if the predicted drop occurs, it would still make the five-year average of net farm income the highest since 1977, after adjusted to inflation, the Chicago Fed noted.

For now, financial professionals seem to be advocating caution in the agricultural sector as 8 percent of Midwestern banks in the Chicago Fed's survey reported that they would require larger amounts of collateral in the fourth quarter of 2011.

"These wide swings in prices make risk-management strategies even more vital for agricultural enterprises, whether or not there is a higher level for agricultural prices in the era ahead," warned the Chicago Fed.