There seems to be no ‘happily ever after’ in sight when it comes to reaching to a mutual understanding and agreement between the BSCFA and BSI/ASR. Today, another round of discussions was held where members of both entities met to review the draft counterproposal from the Belize Sugar Cane Farmers Association to BSI/ASR’s newly proposed commercial agreement presented to the association on September 8th, the date the two entities last met.
BSI is saying that they hope to finalize the agreement by the time the next crop season begins but that their position remains the same where they don’t want to enter into an interim agreement but to conclude negotiations once and for all. This is being proposed for many reasons, says Financial Controller for BSI, Belizario Carballo Jr.
Belizario Carballo – Financial Controller, BSI
“Last crop we saw the average grinding rate going up by 20% from an average of 6,000 before per day to 7,300 tons cane per day and those investments have been made and the benefits of them have been proven those benefits flow directly to farmers because any shorter crop any more sugar being produced from the cane directly goes to farmers because 65% of the net revenue from sugar cane sales goes directly to farmers and so BSI makes investments and of that recovers 35% of the benefit and 65% of the benefits of BSI’s investments goes directly to farmers and we are now looking at a situation where we have a capacity of 1.3 million tons of cane to mill in a 26 weeks period of crop and we are hearing that there is perhaps more than that out there in the field that there may be 1.4 million or 1.5 million tons of cane for the next crop so whatever that figure is we are already seeing a situation where cane supply is approaching the milling capacity and that means that more investments will need to be made and who will need to make those investments, BSI along with ASR and we estimate that investment to be close to three hundred million dollars Belize that is required to achieve an increase in capacity to 1.8 to 2 million tons of cane. That is the vision that we have and that is the vision that we remain with but to make that happen investments must be made and those investments can only be made if there is a climate for those investments to be made, political, economic and in terms of economic it starts with a good clear commercial agreement between BSI and the cane farmers. So today we met to review that draft agreement that we presented to BSCFA on the 8th of September we have in the interim received their comments on it and today we met to present our comments on the amendments that they were proposing.”
Investments aside, on the other side of the table, Vice Chair of the BSCFA Committee of Management, Alfredo Ortega, says they are disappointed at the way BSI was quick to disapprove of their counterproposal. Ortega says the association cannot simply just accept BSI’s formula citing that they (BSI/ASR) are singing the same old tune and almost starting to sound like a scratched record.
Alfredo Ortega– Vice Chair, BSCFA
“When they made their presentation today based on the counter proposal we sent to them there were many things they were not in agreement with and this clearly demonstrates that they are looking forward to impose the presentation that they gave us during the last meeting we had on which it clearly demonstrates that it is 75/25 a 75 inclined to their benefit and 25% inclined to the farmers and really we are looking forward into a 50/50 situation that will bring benefit to both parties within the industry. Hey want to impose on us to accept their formula in which they are using the price of sugar cane that is the example they are using and they have said that it is an example which they used to come up with the 51 cents payment on which day today they said clearly that that is an example and because we did not accept the proposal that has come to an end and so they are looking forward into the upcoming crop is anything we agree upon now. They are using in tier formula the price per ton of cane which was paid to the farmers, we are saying to them use the electricity because that is where the bagasse is being used a bio fuel we are seeing now that around the world they are looking forward in constructing more plants as BELGOGEN because it seems to be that the future in sugar cane wold be energy because that has a strong market versus the sugar because the sugar as you know is volatile. Presently we are seeing that prices are going down, that there will be a change in the regime in the EU Market for2017. One of the situation that is giving us at least a leverage is the contract that they have of four hundred and twenty five Euros per ton of sugar which will come to an end next year in 2015 .So what will happen after that we don’t know they rightly said it today we don’t know what will happen after that so we cannot accept that they will use a formula based on the price of sugar when they are using the bagasse as fuel in order to sell electricity to the national grid so that is what we are asking from them, use the price of electricity so that you can come up with a better figure on what you are showing to us but it seems to be that all they want to do is to impose on us and for us to accept what they are presenting tonus and we cannot go with that if we are to work as what they say as a couple that cannot afford a divorce they must realize that we are living in new eras they want to come as we are living in the olds where the man come and beat the wife and half an hour later he come and ask for food and she gives it to him and everything no man we are in a different period of time so if they are looking forward as they say for the farmers to benefit let them come clear and be just as the way it should be.”
So, will there be a repeat of last year woes in the Sugar Industry? Both parties again, agree to disagree.
Maria Novelo- Reporter
“It might seem like history might repeat itself if both entities are dancing around the issue."
Belizario Carballo – Financial Controller, BSI
“There are some very fundamental points that we are still at odds on one of them is the bagasse issue which we have presented a formula and we are firm in terms of what we have committed to do in respect to a payment for bagasse committed to under an interim agreement committed to negotiate a payment and we have been seeking to do that and in that process we have presented a formula which we feel is fair and reasonable and equitable considering that BELGOGEN which is the investment that is generating the interest in a payment is yet to make a profit and that is our fundamental point. BELGOGEN is an investment from BSI and BSI as the investor is yet to recover one cent from that investment. We are offering to pay a payment for bagasse to farmers starting from next crop if the agreement is concluded but it has to be in context of investments and an ability for the investors to recover their investments before there can be any talk about sharing.”
Alfredo Ortega– Vice Chair, BSCFA
“As an organisation we have grown and we clearly know that if the farmers does not deliver his cane he is not making money so we clearly understand the issue in regards to delivering our cane what we are looking forward is a mutual understanding on both sides on which we are seeing clearly that they are looking forward to only what will give benefit to them rather than giving benefit to the industry because once the farmers get an economical substantial benefit it is the country of Belize that will gain. We will now be going to the farmers presenting this to them and we will see what will be our next step in this regard.”
At the end of today’s discussion, there was still no agreement and it remains unclear if or when the issues at hand will be resolved. Hopefully, for the survivor of the Sugar Industry, it is before the commencement of the new crop season set for the month of November.
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