Screen_Shot_2014-07-16_at_7.50.11_PMApproximately two weeks, that is the amount of time the Belize Sugar Cane Farmers Association has to respond to the proposal made by the Belize Sugar Industries Limited for 51 cents payment per ton of bagasse. Via a letter sent yesterday to the BSCFA, addressed to the Chairman of the Committee of Management, Leonardo Cano, BSI makes it known that the offer for payment for bagasse made during the negotiations will remain open through 5:00 p.m. on

 

Friday 1st August 2014. This is after the agreement signed on January 13th 2014, became null and void after both parties were unable to reach an agreement on the negotiations of bagasse before the end of the crop season.

While the BSCFA did not respond to the letter yesterday, they certainly did not keep quiet today.


Alfredo Ortega- Vice Chairman, BSCFA, COM


“Sinceramente en cualquier negociación, yo creo que a BSI al mandar esta carta y hacerlo público y poniendo un ultimátum creo que es una forma de decir agarra lo que te doy o sino déjalo la cual eso no es un para nosotros no es una forma de llegar a una negociación a un punto adonde ambas parte podemos salir ganando, yo creo que ellos están ahora en esta carta que mandaron poniendo que para el primero de Agosto a las cinco de la tarde para decidir y sino pues no va a pasar nada y el otro tiene que si aceptamos que va hacer basado a esta zafra que acaba de terminar la cual tampoco eso se ha negociado con ellos y realmente lo vemos en una forma de des respecto de que vengan con esto en la cual ni si quiera abrieron ese campo de decir pues vamos a ver tu formula y vamos a ver nuestra y vamos a llegar a los términos a donde ambas partes podemos salir ganando así es de que realmente no aceptamos esta actitud de ellos y se lo vamos a presentar a los caneros el domingo.”


Carmelita Perez – Reporter


“Piensa usted que el tiempo que les han dado para pensar sobre esa propuesta prácticamente son dos semanas es suficiente tiempo para un tema que es tan crítico para los caneros?”


Alfredo Ortega- Vice Chairman, BSCFA, COM


“Claro que no, porque nosotros estamos de tras de esto desde el 2010 hemos estado de tras de esto más en el 2012 que les enviamos carta no es nada mas de hoy y ya tiene un buen tiempo que la Asociación les estado pidiendo la negociaciones sobre esta situación.”


As previously mentioned, the 51 cents payment offered to cane farmers by BSI, is based on valuing the quantity of fiber in cane used to generate electricity sold by Belcogen to BEL. BSI is of the sentiment that the methodology used is both transparent and verifiable. At the same time they sustain that the BSCFA leadership has not presented a clearly articulated and reasoned proposal which supports their $10.00 payment quantum. BSCFA though, says otherwise.


Belizario Carballo- Financial Director BSI/ASR


“We have only received from the BSCFA indications that they will be willing to negotiate within the price range of $3 to $6.50 and we have indicated to them that we can’t just be agreeing a price just by bargaining a price, it has to be based on a very clear methodology that is supported by both technical and economic to make sense and a proposal like that to support any alternative other than the $10.00 has not been presented by the BSCFA.”


Alfredo Ortega- Vice Chairman, BSCFA, COM


“En base de eso nosotros hemos sacado desde un principio les mostramos a ellos de que este es un tipo de fórmula que les estamos mostrando y en base de esto logramos a llegar a ese punto de los $10 por tonelada de caña sacando el bagazo ahora BSI viene, él no está presentando bagazo él está presentando fibra, nosotros estamos presentando basado al mercado de energía, es cierto que no venden bagazo ellos, ellos venden la energía a BEL pero ellos utilizan el bagazo como bio-combustible para producir esa energía, en su fórmula de ellos están poniendo de que sacaron su fórmula basado, y el ejemplo que usaron es basado al precio de cana del año pasado que fue $74.20 pero ese precio de cana solo al canero donde está el 35% de ellos, donde está el over-head expense cuando para que hagas el gross revenue, si utilizan esto deben de utilizar lo que es el gross revenue porque el bagazo no requiere de transportación, el bagazo no requiere de insurance, el bagazo no requiere de comisión versus la azúcar y en este lado están poniendo la azúcar y la melaza porque 74/20 es incluyendo la azúcar y la melaza así es de que el diseño de la fórmula que ellos hicieron solo están poniendo de que solo es la fibra lo están poniendo en el bagazo y su fórmula ellos solo están hablando del precio de la caña al canero versus lo que nosotros lo les estamos poniendo es lo que es el precio de kilowatt hour que le venden a BEL entonces hay una diferencia como de digo no venimos en insolación.”


If BSI’s proposal of 51 cents per ton of bagasse is accepted by cane farmers, the company is prepared to make the payment for bagasse retroactive for the 2013/14 crop. But before that takes place, a new commercial agreement between both entities must be signed. A section of that agreement must also clearly stipulate who owns the cane.

 

Belizario Carballo- Financial Director BSI/ASR


“Certainly, that is what we would expect it to do as well and for that purpose both BSI and BSCFA had their attorneys present at all the negotiations meetings because at the end of the day we want to have a document that is clear to all parties, if there is any reason at this time to look at the current agreement and say well it is not too clear whether BSI is buying cane or not buying cane which is really a fundamental thing that is impacting on this bagasse negotiation, we want to ensure that at the end of the day there is clarity as to exactly what is the business relationship that we are in and for us it is pretty clear that we are sugar company, we produce sugar, we buy cane to produce sugar, the farmers produce cane and if the cane is theirs until they sell it to BSI.”


Carmelita – Reporter


“We hear the cry of the cane farmers on the other side, do you all think that two weeks is enough time for the membership of the BSCFA to make a decision on the proposal that you are offering?”


Belizario Carballo- Financial Director BSI/ASR


“We feel so because the offer is the offer and it is not really fifty one cents, for us is $550,000.00 as an additional cost to Belcogen that is yet not making a profit.”


The BSCFA will meet with its membership on Sunday to discuss BSI’s proposal. Sources tell us that BSI has set a letter to the BSCFA’s Board of Directors, requesting to be present during the Annual General Meeting.

 

We understand that representatives of the company are asking for them to be included in the agenda thus providing them an opportunity to address cane farmers. While for some it might seem like a farfetched idea, we understand that the BSCFA is yet to respond to BSI.  

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