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ASR/BSI and BSCFA can’t agree on mediator

HeadlineASR/BSI and BSCFA can’t agree on mediator

Photo: Mac Mclachlan – Vice President of International Affairs, ASR/BSI

by Khaila Gentle

BELIZE CITY, Thurs. Nov. 17, 2022

The Belize Sugar Cane Farmers Association (BSCFA) says that BSI/ASR has yet to produce a list of potential candidates who they feel are suitable to act as a mediator between the two parties as they attempt to establish the terms of a new commercial agreement. During a press conference held at the BSCFA offices in Orange Walk Town on Tuesday, the CEO of the association, Oscar Alonzo, told reporters that recent assertions by representatives from BSI/ASR regarding the mediation process were incorrect.

According to Alonzo, both parties had agreed that they would produce a list of potential mediators, but since coming to that agreement, the BSCFA has received no further correspondence from BSI/ASR.

“BSI has mentioned something about attitude. And I think this further displays the attitude that BSI has been showing, not only in regard to this mediation process but since the old process of negotiations began. And where we have clear steps and processes defined, it seems that these steps and processes are only convenient when it suits BSI for them to follow,” Alonzo said.

Last Thursday, BSI/ASR held their own press conference in response to allegations made by the BSCFA. During that conference, the company’s Vice President of International Relations, Mac McLachlan, told the press that someone had already been recommended to fill the role of mediator and that the milling company, after accepting that recommendation, was awaiting a response from the association.

McLachlan also spoke on the proposal made by the BSCFA to split gross revenues from the sale of milled sugar cane 60/40. He said that such a split was unreasonable, and that agreeing to it, without having farmers contributing to production costs, would amount to a $20 million yearly subsidization of the cañeros by the company, which, he said, would condemn BSI/ASR to bankruptcy—a claim that the milling company has made before and one that the BSCFA has vehemently refuted.

The BSCFA also responded to those assertions this week, with Finance Committee Chairman Javier Keme stating that they had already shown the company the financial rationale behind their proposal.

“What [BSI/ASR] calls a financial rationale for their position is their millions of dollars of investments. That’s the only rationale that they have been putting forward. The last statement that they made in that regard is that they invested sixty million dollars as operation costs every year,” he stated.

BSI/ASR went as far as to allow the media a first-hand glance at those million-dollar investments via a tour of their factories this week. There, they showed local journalists the giant, stainless steel machinery, used for manufacturing and processing, all of which has been continuously improved and maintained since 2019. According to the company, the new machinery has allowed for the sale of direct consumption sugar at a higher price, which has benefitted both the millers and the farmers.

“…We’re selling in international markets: in the US, Canada, the Caribbean, and Europe, and the standards are very high. One mistake can really tarnish your reputation. And that’s why it’s very important that what we do here is done to a very high standard that meets international customer requirements. And that is a big part of the investment that occurred… that included the expansion of the boiling house… I’m sure the public will recall many years ago, you’re stirring your sugar, and you’d sometimes get little fibrous materials. All those things had to be addressed. You put in the syrup clarifiers and DSM screens so that the sugar, the juice that you’re producing to produce direct consumption sugars, is of high quality and of a high standard… Then, you go to the next part, which is conditioning. So, the sugar, by the time it gets to the customer, has to be in a free-flowing state… So you would have an opportunity to see the investment in the conditioning building, so all the driers, the silos….Then, you had the packaging facilities that had to be expanded and upgraded.. The value-added investments have been around sixty-four million Belize dollars… and then you had the environmental projects: the water cooler.. and also the air emissions. Those two projects combined are around twenty-two million. So, in the last four years alone, we’re talking about a hundred and ten million Belize dollars in investments, expanding to produce more value-added sugar,” stated Shawn Chavarria, Director of Finance of ASR/BSI.

But the farmers, Keme said, have also made investments in the millions.

“An average of $27 on every raw tonne of cane that is delivered is an investment of the farmer in the production sector. On an average of $27. You add to that the $30 average of harvesting and delivery, it arises to close to $57 that the farmer invests every year. You put that in a volume of a million tonnes in production—that’s $57 million on average that the farmers put every year. So, hand in hand, they can’t come and say that the farmers are not investing,” he explained.

And while it seems that there is no end in sight to the months-long impasse between BSI/ASR and the BSCFA, both parties, as well as the Government of Belize, have expressed a desire to resolve the matter before the start of the upcoming crop season on December 19.

The BSCFA CEO has said that the association is intent on having a commercial agreement signed before the start of the crop, noting “that has been our objective and our commitment since we started the negotiation process and we have not deviated from that.”

BSI/ASR’s Mac McLachlan shared a similar sentiment on Thursday, stating that he hopes the mill and BSCFA can find some middle ground and move forward with a productive business arrangement for the benefit of the sugar industry—particularly since world prices for sugar cane are currently high.

“We have just over the last crop put forty million dollars into the economy of the north through the improvement of these cane prices. That’s very important, not just for cane farmers. It’s important for the entire economy of the north. If we didn’t have a sugar industry here, well, it would be a lot more difficult for people, I think,” he added.

In an interview on Wednesday morning, Prime Minister John Briceño said the same. But while he expressed his hopes that the start of the crop will be on time, he also added that he believes, in some instances, that both sides have “pinned themselves in a corner.”

“It’s just endless games that both sides are playing, and it’s, unfortunately, a lot of innocent people are going to get hurt, a lot of cane farmers are going to get hurt because they would not be able to deliver their cane, and the truth is that this is probably some of the highest prices we’ve had in a long time,” the Prime Minister stated.

He also responded to questions about the possible willingness of the three other sugarcane growers associations to proceed with the sugar crop even if an agreement is not reached with BSCFA, which produces almost half of the sugar cane delivered to the mill. Briceño replied by stating, “ … The important thing is that we need to get the crop going. I mean we have not only BSCFA, but other associations that have already signed contracts with BSI, and who knows? What if we decide we’re not going to open until BSCFA gets an agreement? And then what if the other associations then decide to sue the government to say, well now you are preventing me from earning a living? So, we have to find the best balance to be able to get this going.”

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