Photo: Oscar Alonzo, CEO of BSCFA

The BSCFA is not signing a long-term commercial agreement until the completion of the Commission of Inquiry investigation into the sugar industry, says CEO Oscar Alonzo.

by Marco Lopez

BELIZE CITY, Wed. Nov. 29, 2023

The members of the Belize Sugar Cane Farmers Association (BSCFA) handed their mandate to their leadership during an Annual General Meeting (AGM) that took place last Sunday, November 26. The signing of a one-year extension to the interim agreement that was put in place to enable the commencement of the last crop, and a demand for the payment of Fairtrade sugar premiums from the Belize Sugar Industries (BSI) are the directive that has been issued by the membership. Oscar Alonzo, CEO of BSCFA, said this week during a press conference that the proposed four-year agreement which the mill had been trying to convince the association to sign will not be entertained.

The BSCFA is unwilling to enter into a long-term agreement without the finalization of the Commission of Inquiry (COI) investigation into the sugar industry. While the COI has been established, it has not yet been operationalized, and the two entities that triggered the creation of the COI are still not on the same page as to what the investigating body’s mandate will encompass.

The BSCFA believes it is important to look at the industry holistically, from cultivation, which is the remit of the farmers, to the ultimate marketing of the sugar products and all processes along the production chain leading to that point, which are controlled by BSI.

BSI’s Director of Finance, Shawn Chavarria, said in an interview on Wednesday that deficiencies or shortfalls on the cane farms and overall modernization of the industry should be the subject of the COI. BSI is contending that low cane production is a constant challenge. BSCFA’s CEO, however, expressed his belief that non-payment of incentives like the Fairtrade premiums contributes to the reduced capacity of farmers to invest in fields to improve cane production.

The members of the BSCFA have made the same call since the expiration of the original commercial agreement two years ago – for the finances of the mill to be revealed to the association so that they can, for themselves, determine if the prices being paid for their cane that is delivered to the mill are fair. ASR/BSI, a private company, has been reluctant to fully open its books. BSCFA has noted that financial records shared with them in the past by the mill were lacking in detail. This is the basis for the BSCFA’s call for the COI.

The future of Belize’s sugar industry – which is currently seeing high payouts due to increased global prices at this time – rests in the hands of that investigative body. The results of the inquiry into the mill, according to the BSCFA, will lay the foundation for the establishment of a long-term partnership. But first, transparency, in terms of “financial and economic interest” afforded to the cane farmers, must be assured, he said.

BSI’s proposal, according to CEO Alonzo, called for a four-year term and for Fairtrade Premiums to be paid by Tate and Lyle, and listed additional charges that are to be deducted from gross revenue from the sale of sugar and molasses, for the use of the Port of Big Creek facilities.

“They don’t consider the other factors that are critical incentives to our members — which is the price of the sugar cane that is paid to us. It doesn’t make any economic sense for us to sign a long-term agreement if we are not certain as to the manner in which extra costs are being deducted … how they are being calculated, and also trying to resolve the matter of the cost of converting the raw sugar into direct consumption sugar,” CEO Alonzo said.

Even though there is a considerable increase in the price of direct consumption sugar compared to raw sugar, “when the cost of these items is deducted from the sale of sugar, we notice that there is no extra benefit arising,” Alonzo said.

The parties have been engaged by a sugar industry Ministerial Sub-Committee that is tasked to act as a bridge between the association and the mill. They are being called on in this critical time to help the parties sign an agreement that will prevent a delay in the start of this year’s sugar crop.

“We know that we depend on the Ministerial Sub-Committee to try and help us reach an agreement,” Alonzo said, adding clearly that, “at this point, bearing in mind the manner in which BSI has submitted their addendum, any negotiations would still be futile.”

According to BSI Director of Finance, Shawn Chavarria, the parties are to meet this Friday, at which time the BSCFA will likely table its proposal, which includes a demand for payment of Fairtrade premiums to be disbursed by BSI.

“With this interim agreement, it will give the time required by the Commission of Inquiry to undertake its thorough investigation, and their report and recommendation could serve as a basis for us to sit down with BSI and negotiate a fair commercial agreement that will provide a fair cane price to cane farmers,” CEO Alonzo said.