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#392295 - 11/09/10 09:31 AM Belize Sugar Industries ‘bruk’,can’t make payments
Marty Offline

The Belize Sugar Industries Limited has announced that it is unable to make the third payment for the 2009-2010 crop, which is due to cane farmers on November eighth. The delay in payment is the result of a decision by I.N.G. Bank not to renew its agreement with B.S.I., which expired on September thirtieth, because of the downward trend in cane supply over recent years. B.S.I. turned to the Social Security Board for interim funding and a ten million dollar loan was approved but is yet to be disbursed. But while the loan logistics are worked out, the delayed third payment leaves the cane farmers in a tough situation because they depend on the money to cover operational expenses and provide for their families. Today the People’s United Party expressed its concern for the farmers and called on the government to intervene and address the issues affecting the industry. According to the PUP’s release, G.O.B. neglecting the industry threatens its survival and the livelihood of over eight thousand farmers and their families. The opposition party also warns that if the issue is not resolved, it could lead to serious conflict between the farmers and B.S.I. It ends by urging government to have S.S.B. release the approved funds, rather than focusing on the fifty million dollars investment in Telemedia.

Channel 5

#392537 - 11/12/10 08:34 AM Re: Belize Sugar Industries ‘bruk’,can’t make payments [Re: Marty]
Marty Offline

8000 famers still waiting for sugar cane payments from BSCFA

There is tension and unease in the sugar belt tonight. That’s because the third payment to farmers for cane delivered to the Belize Sugar Industries, is delayed. Even worst, there is still no indication when the eight thousand farmers and their families will be paid. So far they say they have been patient but that virtue is running out because the late payment means that their maintenance works and commitments have been thrown off schedule. When News Five’s Delahnie Bain dropped in today, the message was clear, times are “haad” and the people need the money.

Delahnie Bain, Reporting

Days after the third payment for the last sugar cane crop was due, the farmers are not getting any positive news about when funds will be made available. We’ve heard from Alfredo Ortega, the chairman of the committee of management of the Belize Sugar Cane Farmers Association on how far they will go to get their money. But how do the farmers feel about the delay?

conrado cuellar

Conrado Cuellar, Cane Farmer (Translated)

“We, as farmers don’t have to negotiate with B.S.I. they have their own problems. They have Belcogen but when the crop started they were unable to produce the sugar. This problem should not reach there because if they have the capacity to produce the sugar then we shouldn’t have been at this point in the rainy season because it is best to take advantage of the summer months for delivery and the quality of cane.”

Hilario Pech, Cane Farmer

hilario pech

“It’s very serious because we don’t have to say anything with his financial problem because once the cane is made and sold, I we are due our money and this thing has been happening for three years now; they always delay it because they use our money and then they have to go and get a loan to pay us. Now we have to wait until they get that money for we to get our money, which is OUR money that’s due to us.”

The farmers say they budget to live from payment to payment so they are already feeling the effects of the delay.

Conrado Cuellar

“Right now we’re waiting for the money. We want to clean the cane machinery we want to buy grease and oil to be ready for the start of the crop. That dah di damage to me.”

Hilario Pech

“My pickup there, that’s parked; it needs a battery. The truck needs diesel to move it. When we take our money we arrange it so that we meet this third payment. Now when we can’t get this money in time we’re in very serious problem. Financially, we are in a bad, bad state and I think everybody is like that. In two weeks when electricity and everything is due you will start seeing houses get in blackout because they’re gonna cut our electricity, we can’t pay.”

Cornelio Uh, Cane Farmer

“For me it’s very bad because we need that money.”

Delahnie Bain

“How has it affected you?”

cornelio uh

Cornelio Uh

“In a lot of ways, like we need to fix up our trucks to begin the next crop and many other things right. Plus we need to buy food too. I owe the college too because we expected to get a grant from the Fairtrade and that would help we a lot. But the bonus, we need it.”

At this point there are two issues that are left in limbo: when the payment will be made and what happens when the next crop is to start?

Hilario Pech

“If they don’t get no money, not even they can move their equipment. They need that money so they can move and we, the same thing.”

Conrado Cuellar

“We’re in a big debate over why the money won’t be paid which really has nothing to do with us because they have already received the cane. One of their biggest problems is the BELCOGEN but that is their problem not ours.”

Cornelio Uh

“I noh know weh di si B.S.I. wah get money fi pay and like that we wah can’t have wah next crop too because they don’t have money.”

The 2010-2011 crop season is scheduled to start in early December… IF the finances can be found. Delahnie Bain for News Five.

#392642 - 11/13/10 08:42 AM Re: Belize Sugar Industries ‘bruk’,can’t make payments [Re: Marty]
Marty Offline

Crisis Looms In Sugar Industry

BSI - Belize Sugar Industries - the company that takes in and processes all the sugar cane produced in Belize at the Tower Hill Factory is in a financial crisis.

The company did not have the three million dollars to make the third payment to Cane Farmers on Monday of this week - and there is no indication of when this will happen.

That has left cane formers critically short of cash to prepare for the upcoming season which starts harvesting in mid-December.

And while that is a critical problem for hundreds of farm

So while the farmers may be able to scrape things together - even if they do - the factory may not be able to accommodate them.

The problem is financing - BSI needs 20 million dollars just to get back up to speed. Social Security has committed ten million but the sugar producer is so tied up in financial knots with its last financier - which is the ING group - that it cannot free up the collateral to access those funds.

The burning issue was discussed in the House Of Representatives today where - in a rare spirit of bi partisanship - the Prime Minister indicated that he'd called the leader of the opposition on it - and if necessary they'll go "hand in hand" to international friends to seek help for the ailing industry.

We asked the PM, is BSI too big to fail?:

Jules Vasquez
"Because as you outline it, if you can't pay the 3rd payment you can't start again, you can't start up."

Prime Minister Dean Barrow
"I am indicating that if the commercial arrangements don't work then the government will have to see if any way if any of our partner countries might agree on some method of financing. How that would work in terms of the ownership and management of BSI I am yet to figure out and yet to even look at because I am not even sure if we are at the stage where I will activate the notion that I have that I should try to reach out to bilateral partners. If BSI is able to produce the replace financial arrangements then game set and match, the situation in terms of the replace financing is not without hope but I think people have to be told how serious things are because as I said to focus only on the 3rd payment which is due and which the farmers have a right to expect misses the larger picture."

Jules Vasquez
"Is that the case with BSI? Are they too big to fail?"

Prime Minister Dean Barrow
"Well notionally but practically speaking that can't be, we don't have the kind of resources that United States posses and posses in terms of bailing out the banks. I don't want to give a figure, but with respect to paying off the old loans as well as finding new working capital, you are talking about a huge sum of money, remember that we have a 1 billion super bond debt that we inherited, you have people such as Michael Ashcroft going all the world trying to trigger a default, trying to say that arbitration events and so on constitute the basis for a default. Who in hell is going to lend us any serious money commercially, that's not on so even if we wanted to go that route, it would be possibly in the circumstances. The only option that could conceivably be left us is as I said trying to deal with bilateral partners."

The Prime Minister also indicated that the IDB may be able to provide limited funding…

Channel 7

#393108 - 11/18/10 02:23 PM Re: Belize Sugar Industries ‘bruk’,can’t make payments [Re: Marty]
Marty Offline
BSI blames farmers for poor cane quality

The angry cane farmers blame Belize Sugar Industries (BSI)’s “poor management” for their failure to pay the third payment, which was due from November 8, but BSI says it’s the farmers’ poor quality cane and other external factors that are the real problem.

BSI’s Finance Director Belizario Carballo explained that in this year alone, the company had milled 1,122,765 tons of cane, which yielded 88,144 tons of sugar. He says what the farmers fail to acknowledge is that their cane brought in 100,000 tons of mud.

The shockingly low-quality cane that has been coming to the factory over the last four years has resulted in the company producing less than 100,000 tons of sugar per crop.

He explained the TC/TS Ratio (tons of cane to produce a ton of sugar) was 12.74 for 2010. This meant a ton of cane yielded less than 160lbs of sugar. This was low compared with past years, such as when cane delivered to the Libertad Factory in Corozal would have a TC/TS of 8.0 (yielding 250lbs of sugar from a ton of cane) and the factory’s average TC/TS for all cane delivered was 8.5.

Such low quality TC/TS has been the norm since 2007, and has been a major bone of contention between the company and its their financiers.

In his original letter sent on October 28, 2010, to the Chairman of the Belize Sugar Cane Farmers’ Association (BSCFA), Carballo explained how this issue of poor quality cane helped usher in this current financial crisis where BSI is unable to access funds from its original partners, namely: First Caribbean International Bank (FCIB) and ING.

“We had warned that the banks have been increasingly concerned in recent years with the downward trend in cane supply and particularly cane quality, and its adverse impact on sugar production,” Carballo said.

In his letter, Carballo also made clear the correlation between cane quality, sugar quality, and BSI’s cash flow problems. He explained that BSI got loans to cover the shortfalls, but the loans, coupled with perpetual substandard deliveries of cane had created the financial dilemma.

“This [poor quality cane] has adversely affected BSI’s cash flow and we have had to increase the level of our working capital borrowings with the banks to meet the cash deficits resulting from the poor crops.”

Carballo said that negotiations are ongoing with FCIB and ING, but the company is not in good financial standings. Given that the farmers are apparently oblivious to the need to improve their crop quality, has made the lending institutions become a lot stricter about lending money to BSI.

Carballo said BSI has been having difficulty paying the farmers for the last three years and accessing funds for BSI’s annual factory repair routine, but the problem has escalated this year because the original lenders — with doubts about BSI and the sugar industry’s solvency in the forefront — are no longer as forthcoming as in previous years.

In the wake of this financial crisis, the BSI has sought and has received approval for a loan for $10 million from Social Security. This is half of what is needed, but even Social Security has reservations about lending money without some form of collateral. this has been a stumbling block as BSI is unable to extricate its assets from other contracts with other lenders. Thus the SSB funds have not been released and the farmers still have not been paid.

The Reporter

#393177 - 11/19/10 09:06 AM Re: Belize Sugar Industries ‘bruk’,can’t make payments [Re: Marty]
Marty Offline

Cane farmers may soon get paid

Alfredo Ortega

Tensions have subsided somewhat in the sugar belt where some resolution is in sight to the crisis over delayed third payments to the eight thousand cane farmers. The Social Security Board met late Wednesday evening to work out details that could expedite a ten million dollar loan to the Belize Sugar Industries. The loan already had the nod of the S.S.B., but disbursement had been delayed. From what we gather, the Board is attempting to fast track the loan and will disburse once certain conditions are met; those being a government guarantee and an agreement from B.S.I. and Belize Cane Farmers Association to implement management reform. The funds are expected to be available as early as next week. Chairman of the B.S.C.F.A.’s Committee of Management, Alfredo Ortega, told us they are not entirely satisfied because a definite date was not set for the payment in their meeting with B.S.I. and the Ministry of Agriculture.

Via Phone: Alfredo Ortega, Chairman, Committee of Management, B.S.I.

“It was a very lengthy meeting but it was not fully satisfactory to our expectations in getting a date to when the third payment will be issued to cane farmers. What was gathered is that next week, maybe—it’s not so sure—maybe BSI will be in a position to pay the third payment to cane farmers. According to them, yesterday the board of the SSB met to discuss the loan for BSI and that they will have this morning a response from them and from then on they will see what will be the date when they can pay IF the board meeting goes on in favor to BSI to disburse the loan.”

Delahnie Bain

“You mentioned to me in a previous interview that you all would be seeking interest for the farmers. Was there any decision on that?”

Via Phone: Alfredo Ortega

“Yes ma’am, personally I asked the question to Mr. Montalvo and his reply was yes, that they would compensate the farmers on interest from the date that was the eighth of November until the date of disbursement of the final cane payment to farmers. I am somewhat pleased but pleased in one area and not too pleased in the other area because we will be holding our general meeting this Sunday and without having a specific date to present to the farmers when the third payment will be given puts us in a very bad situation.”

Ortega says there is also a new quality assurance agreement between B.S.C.F.A. and B.S.I. The farmers will implement control measures for cutting and loading to ensure that the cane is fresh when delivered to the factory while B.S.I. has agreed to mill no less than six thousand tons per day. It was agreed that the next harvest will begin in the first week of December. In the meeting with B.S.I., B.S.C.F.A. and government officials on Wednesday, the ministry also committed to a million dollar grant to assist farmers to meet financial obligations.

Channel 5


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