BSIís ten million dollar payment to cane farmers on hold
Heading north, itís the time of year when cane farmers receive a second payment for cane deliveries or a bonus from the Belize Sugar Industries Limited (BSI). This year farmers are scheduled to get ten million dollars. But there is disquiet because the payments from BSI should be paid on November ninth, but those cheques will not be made. BSI is currently strapped and in the middle of a review being conducted by two international banks. BSIís finance director Belizario Carballo, in a letter written to the chairman of the management committee of the Belize Cane Farmers Association, said that the delay is regrettable. Carballo explained the delay also highlights the increased financial risk attached to poor crop results and the need to implement necessary changes. In an interview via phone, Carballo said that they hope to have the ten million dollars by the end of next week.
ďHow much money are we talking about?ĒVia Phone: Belizario Carballo, Finance Director, B.S.I.ďItís close to ten million Belize dollars in total. We have a method of payment to farmers where they get the first payment at the time of cane delivery, second payment five weeks after they get the crop ends and third or final payment the second Monday in November. That would have put it at this Monday, ninth of November when that payment was due. Unfortunately, we are not in a position to make that payment given that we have not yet finalized the renewal of our financing with ING and FCIB banks for us to make the financing arrangements, to make the payment on Monday. We have formally written the cane farmers association yesterday on this matter. We have indicated to them there were some previous difficulties, a potential delay. We have confirmed that position yesterday. We are still hopeful that we will be able to make the payments next week, but that is yet still subject to confirmation and that is not something we have full control over. We are subject currently to the approval and documentation process of two separate banks.ĒJose Sanchez
ďWas this issue about the banking arrangements something that you anticipated or did it come as a surprise?ĒVia Phone: Belizario Carballo
ďNo, itís not a surprise at the same time itís something that almost the same thing happened last year. We had a similar delay in payments because we had a delay in approval of our financing facility. Unfortunately, last year we were caught up with the financial crisis and the very difficult banking environment that emerged around October time. This year the conditions externally still prevailed. Itís still a very difficult banking environment and unfortunately we were all caught up in that in terms of the banks scrutinizing and their risks assessment and everything is increased. We are unfortunately currently subject to an annual review of our financing facility. So it means that every year we have to go through a process of approval.ĒCarballo says the banking arrangement allows BSI to meet cane payments irrespective of sugar revenues. So even when revenue from exports arenít received, BSI should in theory be able to pay farmers. http://www.channel5belize.com/archive_detail_story.php?story_id=25772