ASR agrees to pay cane farmers for bagasse

At this point in time, there has been a break in the level of uncertainty that has loomed over the sugar industry in Belize – specifically the 2013/2014 sugar cane crop season – as the sugar cane farmers seem to be one step closer to commencing negotiations with sugar producers in an effort to obtain what they believe is justifiable payment for bagasse – the valuable byproduct of sugar cane which happens to be the source of the current impasse.

Belize Sugar Industries (BSI) and its parent company, American Sugar Refineries (ASR) – in a meeting yesterday morning – conveyed to Prime Minister Hon. Dean Barrow that they are prepared to pay the caneros for bagasse; however, whether it will be the $10 per ton which had been requested by the farmers will be decided in further negotiations between BSI/ASR and the Belize Sugar Cane Farmers Association (BSCFA).

The BSCFA agreed in principle with the offer during a separate meeting yesterday afternoon at the Biltmore Hotel with the Prime Minister; however, the general membership of the cane farmers association will have the final word at an emergency general meeting this coming Sunday, December 15.

Therefore, pending the ratification from the cañeros and, of course, the rehabilitation of the sugar roads in the north, the delayed sugar crop season should start in early 2014.

According to BSCFA representatives, negotiations on the quantum are non-existent thus far; however, those discussions will undoubtedly be in the pipeline when the BSCFA has its scheduled meeting with ASR representatives next Thursday, December 19th.

Following the meeting yesterday morning, Alfredo Ortega, BSCFA’s vice president, who was one of those at the discussion table with the Prime Minister, told reporters that they had previously set a deadline of no more than four months in order for them to finalize the negotiations in regards to the quantum on the payments for bagasse. He stated that the cane farmers have a certain percentage that they have agreed to, and that what they will do in their meeting next Thursday is to present the agreed figures to ASR during the initial negotiations.

Ortega mentioned, “In principle, it looks very good what he [PM Barrow] has reported to us [with regards to] what ASR sent to him in their letter, that they compromise themselves for a payment of bagasse to the farmers. Based on what he has mentioned to us, we will be calling a meeting with our farmers on Sunday to report to them what we have garnered from the Prime Minister today on this meeting.”

After he jokingly said that the only reason the ASR representatives agreed to pay the cane farmers was because of his intervention, and that of his government, PM Barrow explained to the media after the meeting this afternoon, how they (he and his associates) were able to get BSI/ASR to capitulate: “Up to this morning, they [ASR] were insistent on their position, and expressed all sorts of fears as to the future should they agree with what the Government was preparing; they thought it would set a bad precedent, but we were able to talk the whole thing through, and in the end, obviously, they were convinced that this is the only way to go, and that it is the right thing for the industry, for Belize, and ultimately BSI.”

As to whether the farmers will accept the principle that they be paid for bagasse following negotiations, Ortega said “Well, that is what we will be reporting to them on Sunday, on this information that the Prime Minister gave us. We expect that what we’ll be reporting to the farmers, we’ll get a feedback from them and based on what the farmers approve… I cannot say at this point that the farmers will accept or not. That will depend on the meeting we’ll be holding with them on Sunday.”

He said that he is awaiting written documentation in regards to the agreement since it was made through a letter that was addressed to the Prime Minister, so they are waiting for something in writing to be sent to BSCFA.

Ortega said that both parties will more than likely then sign off on a new commercial agreement which should also include a clause stating that BSI agrees to pay for bagasse. “We cannot commit at this point in time. All we will depend on is what we’ll be getting on Sunday from the cane farmers, and also if there will be a continuation on the meeting with us and BSI. We have a signed commitment with them that this negotiation will follow up for a time period. We can say that if January 15 comes and we are unable to start the crop season, then we’ll see huge problems and huge losses that can be created to the industry”, Ortega asserted.

In any event, the experts have declared that due to the deplorable condition of the sugar cane roads and the current inadequate sucrose content of the cane as a consequence of the rains, delivery cannot start before the first week in January.

With the original December 15 deadline now null and void for various reasons, Barrow explained what would be the next earliest possible time to get the industry back on track. The Prime Minister said, “ASR said deliveries could not start before December 27, and that would depend on the weather. Mr. Briceno, the chemist, says in his view, they can’t before the first week in January. Because of the weather, the sucrose content is extremely low, so that if they delivered now, what they would get in terms of payment would be also extremely low. So, on both sides, there is an agreement that you’re not going to start before December 27.”

With an impending resolution to the sugar crisis in the near future, PM Barrow has also changed his tune, and will now prioritize the works that will be necessary to upgrade the sugar roads, which – for the most part – have become impassable: “We have already gone ahead and gotten the estimate; first of all we are doing 2 million dollars worth of repair on the sugar roads; 1.1 million in Orange Walk and nine hundred thousand in Corozal. It is only left now for the contracts to be entered in, because you know with this Government everything must be on the up and up. So we have to get the administrative details sorted out and I would imagine that contractors will start to mobilize immediately. In other words we could sign up contracts tomorrow, Thursday, certainly I would think not later than Friday. The contractors will start to mobilize, but remember now they will basically have until the end of the year to complete the work because the crop can’t start until then,” he said.

The developments could not have come sooner for the Opposition Leader, Hon. Francis Fonseca, who took time out of his press conference yesterday to reprimand the Prime Minister for what Fonseca termed as “poor negotiating skills” in reference to the PM’s approach to resolving the dispute between the cane farmers and BSI/ASR. Fonseca accused the PM of “not treating the matter with the sense of urgency that is required,” and dared to say that Barrow “seemed to be unprepared” going into the first meeting with BSI/ASR representatives this past Monday, December 9.

At the time, the ASR representatives had indicated that they would have to liaise with other executive officials from the ASR Group before they could make a decision as to whether they would agree to compensate the cane farmers for the bagasse.

At about 11:30 a.m. yesterday morning, a press release was sent from the Government Press Office, which stated that Prime Minister Dean Barrow met for a second wrap-up meeting with the principals of American Sugar Refining (ASR). The release said that the PM described the meeting as successful because ASR principals “accepted certain proposals made by Government and reiterated their desire and determination to work with both the Government of Belize and the Belize Sugar Cane Farmers Association to move Belize’s sugar industry forward.”

The sugar cane farmers – through the BSCFA – have been asking BSI/ASR to compensate them for bagasse, but, up until this past Monday, the company had been refusing to allow such a request.

As it currently stands, this Sunday the cane farmers’ representatives will meet with their general membership to get a consensus to move forward on bagasse talks on the basis that they will get paid.

Then, next Thursday, those talks between BSI and the cane farmers will finally get underway.

Subsequently, the cañeros expect to agree on a price for bagasse by the end of March or early April 2014.

And while that is the timeframe for bagasse negotiations, if all goes as planned and the cane farmers agree to proceed accordingly after the meetings on Sunday and Thursday, the sugar cane crop season is expected to start in earnest by early January.

Of note is that the Prime Minister, in what seems to be another goodwill gesture at the Special Sitting of the House of Representatives today, requested $2.87 million worth of write-offs for government loans that were previously procured by the Belize Sugar Cane Farmers Association.