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BSCFA and BSI/ASR “joined at the hip,” says PM

GeneralBSCFA and BSI/ASR “joined at the hip,” says PM

Sugarcane farmers are asking for government intervention, while ASR/BSI is of the view that the two entities should resolve their differences and reach an agreement on their own.

BELIZE CITY, Mon. Aug. 8, 2022 The sugar crop for this year is being viewed as a success by both ASR/BSI, the company which mills the cane, and the government, although a delay in the start of the season due to the absence of a commercial agreement between the company and the Belize Sugar Cane Farmers Association (BSCFA) had resulted in a couple of thousand tons of cane being left in the fields, undelivered and un-milled. Now, an interim agreement signed between the Belize Sugar Cane Farmers Association (BSCFA) and the Belize Sugar Industries (BSI) at the beginning of this year, which made the start of the crop possible, has come to an end, and the parties are now locked once again in an impasse due to their inability to agree on how revenues and costs should be shared. The BSI says that the proposals the BSCFA has made (including a request for the payment of a larger amount for the bagasse that is sold to BELCOGEN; a reduction of costs shouldered by the farmers; and an increased share of revenue derived from value-added sugar) would result in a transfer of over 20 million dollars from the company to the farmers and is something the company cannot afford. The cane farmers have said that they simply need more money to cover the expenses they incur to produce the sugar cane used by the mill. (At least 50% of the sugar cane processed by the mill is obtained from the BSCFA farmers.)

Prime Minister John Briceno said, when interviewed by reporters last week, that these two entities have to work out out their difference and start to create some trust between each other.

The PM said that he met with the BSCFA just before last Friday’s interview, and in the previous week he had met with the millers, BSI. He said, in regard to those discussions, that some decisions were made, but he commented that the government can only put the parties around the table but cannot solve the problems with a stroke of a pen.

The BSCFA, whose membership includes 5 members of the current Briceno administration, including the PM himself, wants the government to intervene in the negotiations, since they say that no good faith is being shown by ASR/BSI. Top officials from BSI/ASR, however, are wary of government intervention in the process.

When interviewed at an event last week marking the end of the sugar season, Director of Finance for BSI/ ASR, Shawn Chavarria said that he does not think the government needs to step in, “The mill is private. The BSCFA is a private entity. I think both organizations are more than capable of managing these negotiations. If you look at it, we’ ve signed long-term agreements with three of four associations without government intervention. So, it shows that we can get it done. They have 50% of the cane we have contracted with a long- term agreement.”

The BSCFA at the start of last season’s sugar crop, had demanded that a new agreement be entered into between the parties. Their proposals, however, were rejected by the company, which pointed to $60 million dollars in debt that has been incurred by the company as part of its effort to modernize the facilities and increase the efficiency of the operation. Many of the farmers, however, have also gotten loans from lending institutions and have been forced to refinance their facilities each year in order to prepare their equipment and fertilize their field — expenses that they say are becoming increasingly unbearable.

The last commercial agreement between BSCFA and ASR/BSI expired on January 19 of this year, and the BSCFA farmers are now looking to renegotiate a higher payout to cover their increasing cost of production. The PM, who had personally mediated the last negotiations that led to an interim agreement which brought an end to an impasse between the two entities and a subsequent blockade at the Tower Hill, may thus once again have to enter the process to ensure the early signing of a new agreement.

When questioned by local reporters, he said that the two parties need to find some middle ground, since they are joined at the hip.

“The BSCFA needs to also understand that the government cannot solve their problems with the stroke of a pen, because it is two private entities that are operating. We can only intervene and try to put them around the table for us to be able to find a way where it can be a win-win for everyone. We all understand, and we always tell both sides: BSI can’ t do without fifty-one percent of the cane or six hundred thousand tons of sugar cane that the members of the BSCFA. have. But at the same time, the members of the BSCFA cannot do without B.S.I./ A.S.R. We have to find a middle ground. We are hooked at the hip, we are partners, so we have to try to sit down with both parties and try to work a way forward. I’m optimistic by nature so I do believe that we will be able to find an agreement before the start of the next crop,” he said.

The PM also noted, in reference to a push by the BSCFA cane farmers to get a chance to look at BSI’s expenses linked with the net sugar value, “… what the farmers are saying now is ‘let’s look at the expenses.’ They have what you call a net sugar value. That is the money that is used to pay expenses to produce the sugar at the top, and that number has been increasing over the years, and now farmers are saying ‘take a look at how it is that we get to that number. Or let’s see if there can be any other byproducts that can be used.’

So, there are many moving parts that it will be difficult for me to sit down and go through the entire thing. What’s important is that we need to find a way how we can get both sides to sit down and to rationally go through the issues one by one and to find some sort of middle ground. When you’re negotiating, you have to be prepared to give up something; and both sides have to be prepared to give up something so that we can have a middle ground, a common ground for us to have a successful cane season next year.”

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