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Farmland boomed during the 1970s and crashed during the 1980s. Now it's becoming a good investment again, according to professionals who manage farms and appraise rural property.

A report issued Wednesday shows that land values in farm states have increased for five consecutive years. Combined with farm income, this makes farmland a better investment than commercial real estate, says the American Society of Farm Managers and Rural Appraisers.The report, based on a national survey of society members, shows the value of farmland increasing 3 percent in 1991, plus cash income ranging from 3.7 to 7 percent, for a return on investment of 10 percent or more in some parts of the country.

Tharrell Ming, an appraiser in Bakerfield, Calif., says land in the San Jaoquin Valley is appreciating 4 to 5 percent a year.

The farm foreclosure rate remained high at 8.7 percent last year - down from 12.9 percent in 1990. But farm professionals say the 15-20 percent foreclosure rates of the mid-1980s are unlikely to be repeated if interest rates stay low and commodity prices rise as much during the '90s as generally expected.

"The people in the market today are not speculators, they are farmers," says Howard Williams, an appraiser in Greensboro, N.C., who speaks for the national organization. "Active farmers and ranchers acquired more than 60 percent of the farmland sold in 1991."

About 21 percent of the farmland sold last year went to absentee owners, but such purchases seem to be leveling off, the survey found. Foreign ownership of farmland appears to be declining.

Dale Aupperle, a farm manager-appraiser in Decatur, Ill., says insurance companies, pension funds and individuals are beginning to divert money from the stock market and low-yield certificates of deposit into farmland as a hedge against inflation.

"Farm income is up, overall debt is down, land values are appreciating and grain stocks and reserves are at their lowest levels in many years," says Aupperle.

The price of farmland is still far below what it was at the peak of the boom in the early 1980s.