REPORT #529 October 2002

by Ray Auxillou

The buildup of corn production for Belizean export to the Caricom Market, mostly Jamaica has hit a big snag. What was a steady growing acreage in corn production has come to a screeching halt apparently. The battle is over the way corn is processed.

At heart of the CORN WAR, is processing competition, a sort of quasi monopoly created by political and bureaucratic control of two pieces of paper. One piece of paper is called a LICENSE, the other is called a CERTIFICATE OF ORIGIN.

Amazing to think; that academic reasoning by desk bound bureaucrats who couldn't grow a stalk of corn if their lives depended on it, can wreck a successful growing export corn business. But that is the problem and cause of the CORN WAR in Belize.

The Mennonites are the biggest corn growers in Belize, but there are some private producers. These together have gradually hand selected varieties of Belizean corn, done the experimentation privately of yields, found ways to increase acreage over many, many years. One private grower was all set to cut his vast citrus acreage down and go more into corn. Until the CORN WAR took the bottom out of the business.

Growing corn in the tropics is not easy. You have to grow local varieties, not imported seed. Any crop of any agriculture product has to run through at least thirty years of successful production before you can say it is a viable method of agriculture in the tropics of Central America. Nearly a hundred investors from abroad in Agriculture have lost their shirts and millions of dollars trying to grow and export crops in Belize. The hazards are many.

So the current CORN WAR is a shame. Because the corn crop in Belize first had to build on local markets which are small. By grouping together the Mennonite producers and private corn growers have succeeded in getting it together and by pooling resources carefully found a modus operendi that worked.

The corn war is over processing of corn into flour is my understanding. Don't take that as fact, because I am a layman and getting facts second hand. But I will do my best to explain it, how it was explained to me.

Processing of corn into corn flour was found to not be viable in Belize. The quantities too small for the cost and operation of the machinery. So the corn farmers got together and hired trucks to get the corn taken to Guatemala to be processed and returned. Gradually this proved successful and they started to increase acreage and find market in the Caricom country of Jamaica. Now I know from experiments with fish being flown to Jamaica by my cooperative Northern Fishermans Cooperative it was hard to get paid in foreign exchange from Jamaica, but the corn growers say it is still difficult but have found ways to make it happen.

Now you can't export CORN without a LICENSE. The license has been denied. Secondly, to qualify for a Caricom protected Market you have to have a Certificate of Origin. The Guatemalan processing therefore is a ticklish bit of middle part of the whole export deal. It was so ticklish that the Corn Growers loose Association actually paid customs duties on Guatemalan trucks to let them have dual truck citizenship so to speak. With the Guatemalan truck citizenship or registration you can get preferential cost cutting through cheaper diesel in that oil producing country which makes the corn trip to the processer viable. This to get the Certificate of Origin for the Caricom Market.

To successfully grow Belizean corn with sufficient yields you have to grow three crops. One of corn, and two throwaway crops called CLOVER AND BLACK EYED BEANS. Now the last two crops are a carrying expense, because you harrow the two crops and turn them into the ground as fertilizer. One farmer has about 300 acres of corn, of which at any one time, 150 acres is growing and is currently ready to harvest ( with no market! ) And the other 150 acres is growing clover and black eye beans to be turned into the soil for fertilizer.

The problem with the growing corn business is the lead time. Roughly planning and investing two years ahead. One grower said he had around 30,000 tons of corn he cannot process and export. A new crop of 150 acres ready to put to the combine and no market. Lost money, because no license.

Here came competition to wreck the boat and the bureaucratic/political solution which is causing the CORN WAR. The growing potential now viable of the Jamaican CARICOM market has attracted the sharks and new investors, but they do not want to grow corn, they only want to skim the icing off the cake, so to speak. I'm told an investor went to Salvador and bought some second hand processing machinery and brought it back to Belize. Now we have a middleman. On the surface this seems fair and square, except the allegations have arisen that the machinery was second hand, because it was no good. It produced an inferior quality corn flour. Allegations have been made that the local market for corn flour has dropped from 150 tons a month to 10 tons a month and that the wholesalers and retailers are complaining bitterly, as they cannot get decent quality corn flour.

The loose association of corn grower farmers do not want to sell their corn to someone competing in the middle of the producing, processing, marketing chain and they fear loss of overseas export markets. The government says apparently that they want to process corn in Belize, even if it is inferior quality. They claim with time, 10 or 20 years this problem will resolve itself.

Subsequently the farmers who have been working and borrowing and investing to increase yields and acreage have found their Export License denied. Without which they cannot sell their crop. The new processor, someplace around Orange Walk wants to do the job, but allegations are that it is a lousy product due to cheap useless machinery unsuitable for quality production control.

In the meantime the corn farmer producers are now going to have to harvest a crop they cannot market due to quality problems and no license to export. They are also sitting on about 30,000 tons that have not been exported or processed in the better corn flour mill in Guatemala.

It gets even more interesting, because the allegations have been made that the Belize Government have signed various agricultural trade agreements and are now considered in violation. Second hand, I was told the Foreign Minister of Agriculture in Guatemala City says that Belize is not serious about it's treaties and carrying on reciprocal free trade between the two countries and are not keeping their word. This of course will have further complications for other types of product exchange.

Is there a solution? Probably? Off hand, and this opinion is worth nothing, as I am a fisherman and tourist guide, not a corn farmer. But, I would think that the current farmers should be allowed to operate in competition with the new processing guy in Orange Walk for a period of three years, to cover their lead time costs and planning. Then the politicians and bureaucrats can go through that academic and intellectual excercise of protecting a new business in Belize. Fair is fair and planning and long term expensive outlays should be covered. Three years license to export and continue to process in Guatemala after which they have to figure a new way to deal with competition and the realities of what was a growing corn export CARICOM market.

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