More than five decades after it became the number one export earner in Belize, the sugarcane industry maintains its importance in our economy. Tourism supplanted sugar as the top-earning industry over a decade ago, but during the pandemic it is sugar that has carried the bulk of the load. In 2019 sugar accounted for 6% of our foreign exchange earnings; over 5,000 independent farmers in the north produce the sugarcane that feeds the mill in Tower Hill in Orange Walk, and about 15% of Belizeans are directly impacted by the industry.

Because of the importance of the industry, the nation holds its breath whenever there is discord between the farmers and ASR/BSI (the owner of the factory). Delays in the start of the harvesting season have been frequent in recent years. In 2015 the season was delayed for around two months, an impasse during which the single farmers association, Belize Sugar Cane Farmers Association (BSCFA), splintered into three groups. This year also saw a delay, with the season getting underway two weeks late.

Sugar remains an important industry for Belize, but farmers aren’t making much profit these days. For many years, since 1975, sugar produced in Belize (and other African, Caribbean, Pacific countries) was bought in Europe at a preferred price, but under challenge from other sugar producers, this very favorable arrangement ended, in 2017. A 2016 report from the IMF, “Can Belize Cope With The New World Sugar Market?” estimated that the industry would have to reduce production costs by 30% to remain viable. A number of Caribbean countries didn’t see how they could compete in the new sugar regime and decided to close shop.

Belize persevered, and it has not been an easy road. Apart from being unsettled by the constant battles between the farmers and BSI/ASR, and losing the preferential market, Belize’s sugarcane industry has been hit by droughts, by floods, and by high prices for fertilizers and pesticides, because of the pandemic. The Fairtrade Agreement, which brings in about $3.5 million annually in support funds for the farmers, is one of few bright spots.

Back in 2011, when the Belize Sugar Industries (BSI) was in dire financial straits, owing over $120 million to foreign bankers, the farmers made a bid to buy majority shares in the company. But the government at the time (UDP), with the industry up to its ears in debt, didn’t see the feasibility of the farmers’ gaining control of BSI.

With BSI under threat of closure because of its financial difficulties, the government first sought to introduce Banco Atlántida from Honduras. The bank reportedly wanted majority shares in the company, which was then 81% owned by factory workers, 10% owned by Tate & Lyle, and 9% owned by GOB, and there was talk that it was also exploring the potential in setting up a bulk storage facility at Commerce Bight, Stann Creek.

The BSCFA was especially turned off by the bank’s proposal to produce 50% of the sugarcane milled by the factory. By law the sugarcane milled at Tower Hill is almost exclusively produced by the farmers.

The IMF 2016 report on Belize’s sugar industry states that the ASR Group (American Sugar Refining Inc.), the world’s largest sugar refinery, “invested US$100 million in 2012 to acquire 81 percent ownership of the single domestic sugar manufacturer, Belize Sugar Industries Limited (BSI).”

The UDP (2008-2020), under the leadership of Prime Minister Dean Barrow, was positive about the ASR Group taking control of BSI because it guaranteed a market for our sugar. In 2016, during another impasse between the farmers and BSI, after some famers called on the government to compel the company to start milling, PM Barrow said such a move would be illegal, that if his government tried to accommodate the farmers, it could cause the management of the company “to immediately shutter their factory and leave Belize.”

A number of issues divide the farmers and ASR/BSI. The farmers contend that ASR/BSI isn’t presenting them accurate information about the costs of their operations. These costs directly relate to the share the farmers get from the industry’s net earnings, so they want more transparency.

Another source of contention is the price farmers receive for the bagasse (cane trash) that is left behind after the sugarcane is milled. Bagasse is a fuel, and it is used by Belcogen, an ASR/BSI company, to provide 15% of the electricity needs of our country. Initially, ASR/BSI didn’t want to pay a penny to the farmers for bagasse, but the company relented after then PM Barrow declared that the farmers deserved a share of the profits from the use of the product.

In 2014 the company offered the farmers 51 cents per ton, far from the $4 to $10 the farmers believed was a fair price. Presently the farmers are reportedly getting less than $0.50 per ton.

ASR has argued that it has made tremendous investments in the industry since acquiring BSI in 2012 — upwards of US$60 million to modernize its operations. As it relates to payment for bagasse, the company claims that farmers weren’t interested when BSI decided to invest in Belcogen to utilize bagasse, then a waste to be disposed of. ASR/BSI also claims the price it gets for electricity it sells to BEL doesn’t allow for it to pay farmers more.

With the present commercial agreement between the farmers and ASR/BSI set to expire on January 19, 2022, the BSCFA, which represents 67% of cane farmers in the north, is pushing for a higher price for bagasse and more scrutiny of the existing 65-35 profit-sharing agreement. The farmers prefer a three-year commercial agreement, while ASR/BSI is pushing for another seven-year agreement, like the one it was able to negotiate when the BSCFA splintered.

The impasses could be considered routine, the natural give and take of business, but they cannot be ignored, because the majority of farmers are hurting. For over a decade the farmers have been struggling, and a number have called it quits and moved on to other employ.

Past initiatives by GOB to help farmers includes subsidies to ease their fuel burden, support to diversify into other crops, soft loans to help improve their efficiency, and a small increase in the controlled price of white sugar that was granted in 2015. Those are not enough. Apart from assisting farmers in their negotiations with ASR/BSI, the GOB must invest in research that can help farmers improve their productivity.

The GOB must also help farmers better utilize their surplus cane after they have satisfied their commitments to ASR/BSI. There are niche markets out there waiting for confectioneries and other products made from the sugarcane in the fields of our farmers up north.