ORANGE WALK TOWN, Wed. Nov. 24, 2021 — The Belize Sugar Cane Farmers Association (BSCFA) and the Belize Sugar Industries (BSI)/ ASR) group are still unable to finalize a commercial agreement to allow the purchase and milling of sugarcane harvested by BSCFA farmers, and the situation is becoming more urgent daily, since the harvesting season is scheduled to start sometime in December, and the current commercial agreement between BSCFA and BSI expires in January 19, 2022.

Without an agreement in place to determine the price of sugar obtained from BSCFA farmers and to govern the revenue-sharing that takes place between the two entities, it will not be possible for BSI/ASR to mill sugar from BSCFA farmers, which, of the four associations which provide sugar to the mill, is the source of almost half of the harvested sugar that is processed by BSI/ASR. The losses within the industry if the matter is not soon resolved, are thus gigantic.

Currently, BSI/ASR has long-term cane purchase commercial agreements with the three other cane farmer associations. However, BSCFA has indicated that it wants to terminate the existing agreement it has with BSI/ASR upon its expiration on January 19, 2022. The two entities had met a month ago to negotiate a contract agreement, and at that meeting both of them had submitted proposals. BSR/ASI had proposed the inclusion of an addendum in the commercial agreement that would put in place an arrangement through which the farmers and mill would share cost savings which resulted from the shift of sugar-loading operations from the Port of Belize Ltd. to Big Creek — which, according to BSI/ASR, will amount to between 1.4 and 2.5 million dollars. The demands made by BSCFA, however, were more extensive. The farmers, according to Mac Maclachlan, the Vice President of International Relations at ASR/BSI, would like a complete restructuring of the way revenues are shared and costs are borne. They do not want to shoulder the costs for sugar refinement and exportation. Instead of sharing the costs for refining and exporting the sugar, and then dividing the revenue that remains after the deduction of those costs between themselves and the mill, the farmers would like to receive a percentage of the gross value of the sugar— something that Maclachlan said would result in a. “major transfer of resources” to the farmers. He estimated that this “direct transfer of value” would total about $20 million and would make the whole operation non-viable and cause ASR/BSI to go bankrupt.

“BSCFA has proposed a proposal that would radically change how the cane price structure works and would basically amount to a major transfer of resources from the mill to the farmers. We have reached out to BSCFA directors to have a conversation about why this proposal would make the industry non-viable for the future and to discuss the issues and the background as to why we think that it’s sensible to retain the status quo while the investments we made kick in and help the entire industry to become more viable by growing the value of the industry that’s been shared among all industry stakeholders,” he said.

BSI/ASR is claiming that it invested US$64 million investment to make it possible for the mill to produce sugar that can be directly consumed, therefore increasing the purchase price. This investment came following BSI’s assessment of the raw sugar production industry. Maclachlan noted that BSI had noticed significant changes in the US sugar regime that would take away preferential pricing for raw sugar in Europe. BSI/ASR thus invested a substantial portion of funds to transition their plant from a raw sugar factory to a value-added sugar factory in order to obtain a higher price in the global market.

Due to the major retrofitting and optimizing efforts that BSI/ASR has been engaged in, ASR/BSI claims that it is not in a position to make the requested shift in payment structure. Prime Minister Hon. John Briceño has indicated that he met with the BSCFA farmers last week and that he will be meeting with them again this week.