Sugar-0003On Tuesday August 26th 2014, the Belize Sugar Cane Farmers Association received the shocking news that for the 2014/2015 crop, Tate & Lyle would only be selling a minimum of 10,000 tons of Belize’s sugar to Fair Trade. That’s 55 thousand less than what was sold for the 2013/2014 crop season. It is also a huge hit financially. For the 2013/201 4 crop season the BSCFA will collect close to 8 million dollars in Fair Trade premiums. But for the 2014/2015 crop the association will only receive a little over a million dollars due to the reduction.


While the association made a huge noise over the issue sighting that the drastic cut would affect cane farmers and the sugar industry on a whole, BSI/ASR, who owns Tate and Lyle, has kept silent about the situation. That is until today. In an interview with ASR Group’s International Advisor, Mac McLachlan, he told us that there have been various misconceptions when it comes to Tate and Lyle’s latest move. He also added that the cutback is not only for Belize but for suppliers across the board. Here is how McLachlan defended the company’s decision.


Mac McLachlan- International Advisor ASR Group’s


“The first misinterpretation is that Tat & Lyle would only be buy ten thousand tons of sugar from Belize for the next crop and that is complete nonsense, we would buy all of Belize sugar as we have done but the issue really is the amount of sugar that would attract the Fair Trade Premium and I think we need to back track a little bit on it to understand it fully, the reason why this reduction in the amount of Fair Trade on the sugar that can be purchased from Belize that has come about is due to market conditions in the European Union, we’ve been saying for a long time now that we have to prepare for 2017 for when the European Market will change well the European Market is changing as we speak, the prices based on sugar in Europe has been reduced by 40%  over the last 18 months due to increase supply of sugar in Europe and all supply chains will suffer from that and that is having an impact on the amount of Fair Trade sugar that can be sold in the EU market and that is reducing and now BSCFA has been aware of this for some time, they were warned in January and again in July this year of significant reductions on Fair Trade sugar that can be purchased next year. This is due to Market forces in the European Union have to do with falling prices and increase competition in the European Union and is affecting the entire supply chain of Fair Trade supplier that we have and it is not just Belize but everybody. It will have an impact on all of the farmers that supply Fair Trade sugar for Tate & Lyle.”


The company, say’s McLachlan, is currently seeking other avenues to subsidies the lost by dialoguing with retailers in Europe to get new contracts and increase the volume of sugar sold. But the reality is that the reduction will take effect in the 2014/2015 crop and despite that it will have an impact, it is a good opportunity for stakeholders to test if the Sugar Industry can stand on its own.


Mac McLachlan- International Advisor ASR Group’s


“Clearly we are contracting less Fair Trade sugar and therefore that will be the impact on the amount of Premium but let’s proceed, there is some time to prepare for that and I said in the meantime we will be looking at whatever we can do to try and help the situation, it is a market situation, market lead and that is the way the sugar industry runs.”


Carmelita Perez – Reporter


“Most of the money used or the Premiums used from Fair Trade are used to implement projects in preparations of 2017, we know that the premium will be paid for this year, however the cut back will come into effect next year, you mentioned that it will have some type of effect but how can BSCFA continue implementing these projects if there is a drastic cut back when it comes to the premiums?”


Mac McLachlan- International Advisor ASR Group’s


“I think obviously all of us in the industry has to prepare ourselves for 2017 and the key solution we need to get to is to improve the productivity across the board of this industry in Belize for us it mean as we have been doing investing in the Mill and ensuring that the efficiency of the Mill is improving and that we are able to produce sugar more efficiently and therefore reducing the production cost of sugar and for cane famers I think the emphasis should be on improving the productivity of sugar cane.”


Carmelita Perez – Reporter


“BSCFA has even gone further in indicating that they are foreseeing a cut back in employees due to the reduction of Fair Trade premiums, are they just blowing this out of proportion, and is there something that can be done?”


Mac McLachlan- International Advisor ASR Group’s


“To be honest I think these are questions you need to ask the BSCFA, I told you that we be receiving a million Belize dollars this year so and I don’t know how their structure work and I think you better safe those questions for the BSCFA.”


Carmelita Perez – Reporter


“So basically, what you are saying is that at the end of the day BSCFA should start preparing for what will come next year?”


Mac McLachlan- International Advisor ASR Group’s


“I believe we all have to prepare for what is going to happen not for only next year but it actually happening today, the prices in Europe are falling as we speak.  That is absolutely false and incorrect, this as I’ve explained it is a market lead decision and that is the point but I think there is another important point here and we are talking of Fair Trade premiums. What we want to establish and end up with is a sugar industry that is sustainable and can support itself and has achieved level of productivity and competitiveness which means it can compete in any market in the world and is not reliant on subsidies and not reliant on preferential agreements on other markets. We want this industry to stand on its own two feet we are committed to that.”


As for the change in payment schedule, McLachlan stated that representatives of Tate and Lyle will meet with the association to further discuss that issue.

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