salt ground rent india solomon islands

Solomons Moves Chancery in Australia to Avoid Rent
land lease location

Salt Prices May Rise as Gujarat Hikes Rent for Mines

While people would be much better off if their government were to quit taxing citizens’ efforts and instead recover the annual rental values of sites and resources, some states already do. It’s not a dream but actual practice. We trim, blend, and append two 2010 articles from (1) The Times of India, Feb 23, on Indian salt mine rent by PTI (2) Solomon Star News, Feb 27, on saving rent in Australia’s capitol city.

by PTI and the Solomon Star News

Salt prices may go up and its yield enhancement projects could suffer here as Gujarat, India’s largest salt producing state, has hiked the ground rent of land leased to the industry for producing the commodity, a trade body said today.

The State hiked the ground rent of land leased by it for salt production by Rs 300 per hectares last week, vide a government resolution (GR), that takes the effective payable rent to Rs 1,988 per hectare.

Indian Salt Manufacturers Association (ISMA) Secretary B C Raval said: “With this hike, Gujarat, the largest salt producing state, also becomes the highest tax charging state for salt production amongst the six other salt producing states," Indian Salt Manufacturers Association (ISMA) Secretary B C Raval said here.

After this hike, ground rent payable in Gujarat will be six times of what is being paid in Tamil Nadu, the third largest salt producing state, Raval said.

The per hectare ground rent charged in other salt producing states is Tamil Nadu (Rs 333), Rajasthan (Rs 247) Andhra Pradesh (Rs 151), West Bengal (Rs 95.50), Maharashtra (Rs 22) and Orissa (Rs 16).

According to industry estimates, share of ground rent in salt production is pegged between 10 to 15 per cent, and could adversely impact the future yield enhancement projects undertaken in the state to scale up production from the current 140 lakh tonnes level.

JJS: Actually, what usually happens is that an owner raises their price or a government raises its ground rent only when the price of the resource rises, as it does when consumers push up their demand or they use up the good’s supply.

If there’s no increase in demand or drop in supply, then an owner or taxer who tries to raise what they charge simply drives away people otherwise willing to extract the resource, since extractors won’t do the work for nothing.

If an extractor could raise what they charge consumers, then that would show either they had not been getting the full market value or that they have a monopoly and can control prices -- or both. But typically they can not raise prices when government raises rent, but they threaten to do so merely to try to agitate consumers so that they’ll petition their government to forgo recovering a greater share of the value of the natural resource.

Solomon Islands High Commissioner, Victor Ngele said the new Solomon Islands chancery in Australia’s capital, Canberra, is very important because its new location will cut the cost of renting and its new building reflects the strong relationship between Solomon Islands Government and Australia.

“The Government has been spending around $300,000 to rent every year,” Mr Ngele said.

“That is $200,000 on land rent and about $100,000 on land rate per year,” he added.

Besides, Mr Ngele said the chancery is a testimony of the Sikua Government’s commitment to normalize the strained relationship between the two countries.

The Government of the Solomons Island secured the lease to build the chancery in 2005 during the time of former High Commissioner, Milner Tozaka.

When Mr Ngele came in 2006, he pursued the project further until the groundbreaking ceremony last year.

Work on the chancery is progressing smoothly after the groundbreaking ceremony last year.

Work started in January by Australian company Kell & Rigby. He said Kell & Rigby is a well established company that also built the Botswana chancery and other embassies here.

The contractor is busy clearing the site and laying down the foundation for the building, the Solomon Star has witnessed.

Mr Ngele said the chancery is scheduled to be completed by January next year. The chancery will house a library, conference room, offices, and two residential quarters.

JJS: Two things to note. Again, some governments, such as Australia's, do already recover site rent, as all governments should, rather than tax buildings, business, and earnings. Plus, if you don’t want to pay a lot of site rent, the way to reduce it is to move away from the prime locations, to where there’s less demand for parcels, where fewer people prefer to live or work.

Some day, this geonomic policy of recovering natural values for public benefit will become the law of every land, once people understand that land value is part of the commons and is generated by society for members of society to share, and the wealth one earns is truly private property and so morally exempt from taxation.


Jeffery J. Smith runs the Forum on Geonomics.

Also see:

Until we geonomize, some battles need re-winning

A look at mass protests during the past 500 years

Land clashes common with 153 indicted MPs

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