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Screen_Shot_2014-10-10_at_8.39.43_PMThe opening of the 2014/2015 crop season is only weeks away and all indications are that the crop will commence without a commercial agreement between the miller and the producer. The negotiation on the new agreement has been taking place for more than a year now.


But while BSI/ASR and the Belize Sugar Cane Farmers Association seem to agree on most of the elements proposed on the new agreement presented by BSI on September 8th, they just can’t seem to settle on the revenue sharing for bagasse.


To date, the situation is no different from what it was more than a year ago because while BSI’s newly proposed agreement holds some new elements, the company is not budging when it comes to the payment of bagasse to cane farmers which is 51 cents per ton. A proposed payment that BSCFA is saying no to. Yesterday both entities met to resume negotiations but at the end, the ink ran dry and there was no agreement. And while the BSCFA came out swinging at BSI/ASR last night, Mac McLachlan, the company’s Vice President of International Relations, says they are disappointed with the outcome of yesterday’s meeting.

Mac McLachlan – Vice President of International Relations

“We were certainly very disappointed with how the meeting went yesterday, we had hoped to see lot of more progress bearing in mind that we are less than eight weeks away from the start of the crop and that we still seem to be talking about the same poor issues just that of the quantum to be paid for bagasse that we have been talking about since these discussions started way back in January and we are concerned because this is a real serious issue not only for us of course but it is also for the farmers and for the country and it is essential that we both be committed to see these negotiations real and to start the crop on the proper time because last year was an example of the loss of the industry of  what a late start does to the crop.”

As explained by the Vice Chairman of the BSCFA Committee of Management, Alfredo Ortega, the association is now requesting that BSI/ASR base their mode of payment for bagasse on the amount of electricity sold to the grid. If that is accepted by the company says McLachlan, cane farmers will receive no revenue for the bi-product.

Mac McLachlan – Vice President of International Relations

“I believe it is extremely important for the cane farmers to understand what the formula says so they can make an informed decision that they are prepared to accept.  This chart demonstrates what the Co-generation Plant at Belcogen actually does, the main purpose of having a co-generation plant is to produce electricity and the heat process, the steam, for the production of sugar cane that is the main purpose so in the past we had other forms of generating that steam but because we had bagasse disposal and this is the same in many industries around the world it make sense that rather having to dispose of the bagasse to actually burn it in boiler to help create this electricity and steam for the production of sugar but in addition to that and the beauty of the Co-generation Plant is that it produces sufficient electricity to be able to export some electricity to the national grid, to BEL, this chart demonstrates of the total amount of bagasse that is used in the boilers which goes both to producing electricity and the heat for the factory production of sugar and the sale of electricity to BEL, as you can see 71% of the bagasse that goes into the boiler is used in the production of sugar, now farmers benefit from that from the 65/53 value share of the sugar and then only 29% is then sold to BEL and what we have been arguing is that the form of share of the bagasse used for the electricity and the sale of electricity to national grid should be based on this 29%, another misconception that is around is that this 29% should be based on purely on the electricity sale to BEL, the issue is that we have demonstrated to BSCFA, Belcogen is not making a profit so if you based the percentage that should go to cane farmers on the basis of electricity sold because the production cost outweighs the income from that sale the farmers should get nothing so now we conceded to pay.”

According to the McLachlan, when it comes to the end revenue sharing of the sugar sold, that still stands at 65/35.


McLachlan – Vice President of International Relations

“BSCFA leadership are suggesting that we are asking for more from the farmers, that we are changing percentages or something, I just want to make it completely clear what is on the table at the moment, the agreement that is on the table is fundamentally is the same as has always been the case here, it relies on the 65/35 value share to the benefit to the farmers and it sets out the value that should be paid for sugar cane based on sugar and molasses, the only fundamental difference with this agreement is that we are also in addition with what we been paid in the past offering to pay a quantum for the use of bagasse that is export to BEL for the national grid. Fundamentally it is the same and I think it is not right to mislead caneros to believe that what is happening is any different it remains an agreement on the price of sugar cane based on sugar and molasses the only difference is that now we are offering something in addition for bagasse.”

BSCFA has indicated that they will meet with their membership to discuss the next step to be taken.

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