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Belize Sugar Cane Farmers Association and BSI/ASR Remain at Odds over Termination of Commercial Agreement

The impasse between the Belize Sugar Cane Farmers Association (BSCFA) and the Belize Sugar Industries Limited/American Sugar Refineries (BSI/ASR) continues tonight. On August 11, BSCFA sent a letter to BSI/ASR, giving them notice to terminate the commercial agreement. That agreement was signed in 2015, after two years of negotiation and was supposed to be for seven years. But now the BSCFA says that the agreement needs to be revised and amended. Executive Director, Oscar Alonzo during a virtual press briefing today, explained that the farmers were not happy with the agreement when it was signed in 2015. Alonzo says that in 2018 an addendum was signed to review several matters. The BSCFA is also of the view that under the past government, they were at a disadvantage as unfair negotiations were allowed to unfold. Alonzo says that with a new government, the BSCFA believes that fair and just negotiations can now take place. Then there is the issue of bagasse; the BSCAF says they want to renegotiate the payment for bagasse.

Oscar Alonzo, Executive Director, BSCFA: “There has been a growing world wide recognition of bagasse as a byproduct that has greater economic and financial value. At the time when we were negotiating the 2015 agreement the argument was that bagasse was a waste, had no value and therefore should not be attributed any payment for its use. Well today there are various organization, even Fair Trade, has urged parties to engage in negotiation in order to obtain a fair treatment and payment for the bagasse that is utilized. Also we have the fact that BSI has been making new investments on order to address certain deficiencies in the industry which we welcome but which as we will point out have not been fully disclosed to us to convince us that yes indeed these investments are benefitting us in the way they should and also we have been experiencing since the 2017 when the preferential prices were discontinued for our sugar in the European market the continued low prices and which bring to question the objective of ASR/BSI when they came into this country to obtain the best markets for our sugar in order for farmers to be able to get a better income. And we have seen since 2015 a continued splintering of the associations being abetted by certain elements and forces in the industry.”

The BSCFA is also looking to renegotiate the method of payment. Javier Keme the Chairman of the Finance Committee, says that many things have changed since the agreement was signed and it’s only natural that adjustments are made.

Javier Keme, Chairman, Finance Committee, BSCFA: “Belize Sugar Industries have been saying that the best share or split has been in place for decades and that is rightly so. 65% for the farmers and 35% for the mill. But there is a line item like in the insurance policies that in the small letters and those are the important factors that affect the insurance policy we have a famous appendage; one that defines how this 65/35 is gonna be done. What does this mean ? That if you have a cake 65% should be for the farmers and 35% should be for the mill it was a straight forward split but it isn’t. There are costs, overhead expenses, marketing costs that have to be deducted to come to a term that is on the appendix one definition as the net straight value. Now what does this mean ? That the 65/35 that has remained for decades there but that little slice of that cake described in the appendix one as the marketing costs over the year has been increasing. What does this mean ? That the portion to be split 65/35 has been getting smaller over the years. So this is why it has to be revisited.”

In 2015, the BSCFA has over four thousand members. Membership declined after other cane farmer associations were formed and as of this year, the BSCFA has more than three thousand members. Alonzo says that the BSCFA contributes more than fifty percent of the total sugar production.

Oscar Alonzo, Executive Director, BSCFA: “Contrary to what they’re saying out there that because of our having sent our notification on the 10th of August that our farmers do not have a contract – yes they do have a contract because this contract, this agreement does not expire until the 19th of January 2022 okay? So we need to dispel that sort of interpretation that BSI is spreading among our membership and the cane farmers that that is not correct. We do have an agreement presently in place. We have done simply notified BSI that it will be terminated and it terminates on the 19th of January 2022 and we have mentioned to them the areas. It’s not a matter of throwing out the entire agreement out the window those are the areas that we can sit down and negotiate, if they have good faith, good will I think we can accomplish this and as I said with SICB providing the requisite technical support which the past SICB failed to do, the past administration failed to do when we requested it from them when they publicly said that they would assist us with that and they dragged their feet with it to enable farmers to be frustrated and then having to sign that agreement against their will under duress.”

Hipolito Novelo, Love FM News: So BSI/SI has taken a firm position. Their position it seems it’s immovable how do you ensure your members that come the beginning of the new crop season that they will be able to participate ? 

Oscar Alonzo, Executive Director, BSCFA: “Well we all have confidence that we will be able to deliver our cane. We have an agreement in place to deliver our cane. We represent over 53% of the cane production, we have  lot of them. Our membership is 3,360 they need our cane in order to start this crop. They cannot start this crop without our cane. They can start it but they will not get the results that they desire. We’re not saying they can’t start it but our cane is critical for them to be able to have and begin a start of the crop that they can begin to export sugar and so on.”

Alonzo says the BSCFA is hopeful that a new agreement will be signed by December one.