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Independent expert finds BSI cited port costs to be justified

GeneralIndependent expert finds BSI cited port costs to be justified

Photo: BSI/ASR terminal at Port of Big Creek

BIG CREEK, Stann Creek District, Mon. May 13, 2024

The assessment of port costs for BSI sugar which was ordered by the Government as part of an agreement to break an impasse for the start of the 2023/2024 sugar crop season up north has been completed. The independent expert, Hugh O’Brien submitted his report to the parties, including Belize Sugar Cane Farmers Association (BSCFA) and Belize Sugar Industries (BSI) on May 2nd.

BSI, on Friday, May 10 beat the BSCFA to the punch in releasing comments on the report, and revealed that the expert had found that the throughput fees and terminal handling charges that the company had cited were justified port charges, and therefore these would remain in their commercial agreement. It also indicated that O’Brien “… concluded that the industry is saving significant costs from the transition to the Port of Big Creek through more efficient loading.” However, the BSCFA, which had questioned the port costs, on Monday, May 13 stated that O’Brien also found that the port costs were being charged from 2019 to 2023, and the Association claims that this was done without its consent and agreement. It also highlighted that this was contrary to the commercial agreement in force during that period.

The BSCFA went on to state that, “The report also shows a duplication in the charging of throughput fee relating to contracted services provided by the Port of Big Creek, but which BSI chooses to undertake at its expense. This situation raises the question as to where are those unnecessary expenses being accounted for and charged to cane farmers, who pay 65% of all deductions.”

BSCFA also pointed to recommendations it says were made by O’Brien, including that stevedoring and throughput costs be reported separately in the calculation of the price of sugar cane, and that shipping agents be asked to separate ocean freight and terminal handling charges in their invoicing to BSI. BSCFA writes, “This co-mingling of costs has been an issue which BSCFA has sought to clarify during the course of negotiations with BSI.”

Importantly, the Association emphasizes the need for the sugar industry Commission of Inquiry to get underway, given that what O’Brien analyzed are merely two cost factors in sugar production. BSCFA says there are other critical cost items which need to be evaluated. Examples provided by the Association include local handling charges and manufacturing allowance.

FLOCERT suspends two sugar cane farmers associations

ORANGE WALK, Wed. May 15, 2024

FLOCERT, the inspection and certification body of Fairtrade, has suspended the Corozal Sugar Cane Producers Association (CSCPA) and the Northern Sugar Cane Growers Association (NSCGA). Fairtrade certified sugar garners better prices, given that it is produced in conditions that guarantee high labour and production standards. Premiums paid go toward the improvement of the social, economic and environmental conditions of cane farmers. These two associations, along with a third, splintered from the 5-decades old Belize Sugar Cane Farmers Association (BSCFA) in 2015.

For suspensions to be lifted, the entity must undertake corrective action. When we queried about the suspensions, which Amandala understands were imposed in February this year due to, reportedly, over two dozen non-compliances, one chairperson told us that the report he must make is to his membership – not the media – and that the suspension was over minor issues. No details were provided. He added that they were suspended in the past for a couple weeks, so it is not the first time they are taking corrective action, which is now underway in this case. The other chairperson told us that he must get permission from his board to speak and, at press time, had not gotten back to us.

Indeed, the BSCFA itself has been suspended in the past, and last year even the miller up north, BSI was briefly suspended.

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