Socialistic protections keeping land prices high
At the end of the 1960s, Sir Sigmund Warburg, holder of a controlling interest in C. Brewer, the parent company of Wailuku Sugar, insisted his board study the profitability of sugar in Hawaii. The study set cost of production of sugar on Maui at 21 cents a pound. The world price of sugar was 5 cents a pound.
Hawaii continues to have the highest cost agricultural inputs in the U.S. The economics of sugar haven’t changed. Without socialistic protections, every pound is sold at a loss.
Thus, since World War II, Hawaii’s plantations are real estate farms – a tax dodge for holding tremendous acreages without incurring ruinous taxation until such time as those lands become profitable to develop for housing or commercial use. In plain words, sugar remains in production on Maui solely to keep the price of land and housing high.
Never mind the effect on tourism if Central Maui goes brown, prices of land and housing will collapse with the dissolution of the plantation holdings. Taking the land out of agriculture would force sales to avoid ruinous taxation.
Hey, Mike White, this will fix all the inequities of ag land valuation for tax purposes. Yeah, put the mill out of business to make Maui safe for Kihei breathers. Ag lots will be back down to the $20,000 to $30,000 they were selling for in the 1970s. Should go a long way toward alleviating any need for poorly run homeless shelters as well.
Theo M. Wender