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#393477 - 11/24/10 09:08 AM Finally! Sweetness & Light In Sugar Industry  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline

FOR NOW.....

There will be a special house meeting on Thursday - special because it is not on a Friday and even more special because for once we expect that there will be agreement on both sides of the floor. The special sitting is being convened to approve a 10 million dollar bailout loan from government to BSI.

As we've been reporting, BSI does not have money to pay farmers the overdue third payment and, more worryingly, the sugar processing company does not have money to start the next season on December sixth. That puts the entire industry in peril because without a bailout the biggest employer in the north could go under - leaving six thousand farmers without a livelihood and their families without daily bread.

With stakes like that - the only remarkable thing is how long government took to "come up" - and front taxpayers' money to bail out the troubled industry.

But as it turns out it wasn't that simple - there's quite a chasm between the farmers and the factory owners - and to save the industry, they both had to get on the same page.

To that end, meetings were held all of yesterday in Orange Walk as Deputy Prime Minister, Gaspar Vega, The Minister of Agriculture Rene Montero and Senior Government Advisor Sir Manuel Esquivel thrashed out the roadblock issues with both sides.

They continued this morning in Belmopan with Prime Minister Dean Barrow and at a few minutes to twelve the big announcement was made:

Jules Vasquez Reporting
After two days of meetings - in Orange Walk involving the PM, DPM, Minister of Agriculture and senior advisor with Ministerial rank Sir Manuel Esquivel.

PM Dean Barrow
"A few minutes ago we reach agreement on a memorandum of understanding that is to be sign by the BSCFA. BSI, SICB (Sugar Industry Control Board) and the government of Belize."

Today all stake holders in the sugar industry jointly signed - while many others looked on - showing an unprecedented spirit of partnership borne out of nothing less than collective desperation.

PM Dean Barrow
"The sugar industry has to be preserved and the government recognizes that it together with BSI and the BSCFA needed to do whatever was necessary to ensure that preservation. To have allowed this thing to collapse just like that was a decision that no compassionate government could contemplate that no Prime Minister who has blood running through his veins, who is a Belizean could allow to happen."

And it is an expensive decision: The MOU commits the government to give a 10 million dollar bailout loan to the industry and BSI, the Cane Farmers Association and the Sugar Industry Control Board commit to improving standards and having a near record year of production.

PM Dean Barrow
"We also have an obligation to the public to ensure that this is not going to be money simply thrown away, thus it was critical that we agree with BSI and with the BSCFA, a way forward we are all aware of the problems that we've had in the past. It was critical that we agree a way forward that would ensure the viability not just of the next crop but of the industry for the future."

And that future will require improving standards - which we've heard before - but today there was the genuine commitment to reform that can only come from an industry which has been given a reprieve from a death sentence:

Alfredo Ortega, Chairman, BSCFA Committee of Management
"We are committed to work very closely with the SAPC and the SICB and BSI to reform within the industry. It is time for us in a no turn back point; if we do that we are killing our self as an industry. We need the commitment of all farmers that we will be geared to work for the betterment of quality of sugar. Yes in the past we have had huge amount of problems as the Prime Minister well said but it is time for us to join hands and to move this industry forward, we cannot continue walking in separate directions. We will be ensuring that there will be strict control in burning of cane, there will be strict control in the cutting system of cane and there will be strict control in the loading of cane. This will reduce the amount of mud that has been taken to the factory and we are serious in this area because we are committed to move this industry forward."

Joey Montalvo, Managing Director, BSI
"It is unthinkable that we could even countenance the thought of having a poor crop next year because that will certainly be detrimental to securing the future of the sugar industry because we have to go beyond this crop, this crop as I said could be our last but we do not certainly intend it for it to be our last crop. I am encourage by Mr. Ortega's comments that there is that resolve and determination to act on what we are going to put our signatures that our word is effectively our bond."

PM Dean Barrow
"What is beyond doubt is that we now have a historic partnership that has been forge this morning. What is beyond doubt is that certainly at the level of the directors and at the level of the directors of the BSCFA and the directors of BSI and the management of BSI, there is a mutual resolve to go forward on the basis of respect and an absolute determination to preserve the industry. All of you know that there is a history of dispute and misunderstanding between BSI and BSCFA, I think it is remarkable that in 2 days we have been able to reach an understanding which I hope and pray will hold. If it doesn't hold that 10 million dollars of tax payers money down the drain. It is also the destruction of the lively hood of 6,000 cane farmers and their families so it must hold."

And while all sides mean well, don't even mention the core sampler:

Hugo Patt, Chairman Sugar Industry Control Board
"Core Sampler certainly is not the word that we want to use today, certainly we want to introduce a system of quality by payment base on groups so core sampler is not option right now."

And while both sides could laugh about that - everyone knows that nothing is promised in their future:

PM Dean Barrow
"Even with this temporary bailout that the government is contributing to, the future of the industry is far from assured."

There are a number of important footnotes to that story. First: the MOU was forged with consultation of 17 of the 18 directors form the Belize Sugar Cane Farmers Association. The Association is tasked with taking the message of improved quality cane to all its branches starting today.

Apart from the third payment with interest - the Prime Minister has also committed to assisting the Cane Farmers Associaiton with an additional one million dollars in support.

As for the ten million dollar loan from government, the money will be raised through a treasury note. The loan will be on the same commercial terms as the previous financial arrangement from ING and First Caribbean which was cancelled in December. To ensure oversight of BSI's affairs, Sir Manuel Esquivel will be placed on the BSI board - making it two Government of Belize directors who will have veto power over the company's spending.

Of course, that is only half of the 20 million dollars in working capital that BSI needs to move forward. The other ten is coming through its principal trading partner, Tate and Lyle which will make the funds available through what's called a pre-financing arrangement.

So, the House meets to consider it on Thursday, the Senate on Friday and the money should be drawn down on Monday, meaning farmers will get their third payment plus interest next week. The factory has pushed back the date for the startup of the season by ne week - so it will now open on December 13th….

Channel 7

#393479 - 11/24/10 09:11 AM Re: Finally! Sweetness & Light In Sugar Industry [Re: Marty]  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline

Sugar Industry gets multi-million dollar bailout

A bail-out for the ailing sugar industry was announced today. Following a meeting between Government and the Belize Sugar Industries, the Belize Cane farmers Association, and the Sugar Control Board, a memorandum was signed committing the government to provide a temporary solution to avert a major crisis in the sugar belt that would displace thousands of farmers. B.S.I. has been unable to pay its debts because it owes the ING Bank and the First Caribbean Bank, sixty million dollars and another sixty-four million is owed by its subsidiary BELCOGEN. The bailout will provide some relief in time for the Christmas and the new crop, but will it prevent the collapse of the industry? News Five’s Jose Sanchez has a report on today’s developments.

Jose Sanchez, Reporting

The government today unveiled its plan to bail out the Sugar Industry which could not pay the scheduled third payment to cane farmers. According to Belize Sugar Industries Chairman, the death knell for caneros rung in September.

Joey Montalvo

Joey Montalvo, Chairman, B.S.I.

“We knew that ING were in some ways denying us the final drawdown on our thirty U.S. million dollar facility. We knew that the withdrawal of the financing facility was imminent. That occurred on the twenty-fourth of September when ING gave us a cancellation notice saying that they were withdrawing their facilities and that they were giving us six months to find another financier.”

When another financier could not be found, the industry faced an imminent collapse. But why would the government bailout an industry failing due to its own inefficiency? The PM explained.

Dean Barrow

“I don’t think any red blooded Belizean would say that the government therefore wasted ten million dollars of taxpayers’ money. The government, the people, the caneros and their family, the north of the country would know that government did everything within its power to preserve their livelihoods.”

Six thousand farmers and by extension their families mounting to 18 thousand Belizeans will be secured by more borrowing.

Dean Barrow

Dean Barrow

“Domestic borrowing. We will issue a treasury note which will be bought by the Central Bank. I think S.S.B. might be interested as well. We will issue a treasury note which will be bought certainly as of now by the Central Bank. It will be a five years note. We’re giving the exact same terms B.S.I.—five years, seven and a half percent.”

There was hope that funds from the Social Security Board could be used to bail out the industry. However, the collateral and previous arrangements would not have made the deal a secure one for S.S.B.

Dean Barrow

“This is where things got hairy with S.S.B. B.S.I. is given an irrevocable payment instruction to the purchasers so that from the sale of the sugar the servicing of the loan should occur. The problem is that if ING really pulls the plug, and there is no replacement financing. They would have first dibs on those proceeds. So it is without a leap of faith, Mr. Montalvo put it somewhat colorfully to me, he said government, the cane farmers and B.S.I. must all hold hands and take the plunge into darkness. Well perhaps that’s a little bit of an overstatement, but the point is Patrick that while we are securing ourselves as best we can, there is no question but that in normal commercial transaction, the security would not be enough. That is why B.S.I. could not proceed with S.S.B.”

Government is putting another director on the board of BSI that is Sir Manuel Esquivel. Audited financials will be made available to the government and farmers.

Alfredo Ortega

Alfredo Ortega, Chairman, BSCFA

“It’s not only the life of six farmers but it is the whole north that depends on the sugar industry. We as farmers, we in the B.S.C.F.A. as leaders, we are committed to work very closely with the S.A.P.C. and the S.I.C.B. and B.S.I. to reform within the industry. It is time for us in a no turn back point. We are committed to work closely and to delivery for the livelihood of our farmers.”

Joey Montalvo

“Give me good quality cane and I’m gonna put that cane in the mill.”

And with that hope for a good cane season, the MOU was signed. Reporting for News Five, Jose Sanchez.

Part of the agreement reached today is that the B.S.C.F.A. will implement a cane quality control program and it will work along with the Sugar Control Board to deliver a minimum of six thousand tons of sugar cane daily. At today’s press conference, it was also revealed that a possible financier is Banco Antlantida of Honduras to replace the ING and First Caribbean Banks.

Channel 5

#393481 - 11/24/10 09:13 AM Re: Finally! Sweetness & Light In Sugar Industry [Re: Marty]  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline

But future of industry dependent on the next cane crop

The Treasury notes for ten million dollars will keep the industry afloat for some time. The government has also decided to provide to BSI, an additional million dollars, initially set aside to improve sugar roads. The PM said that while the fund is unconditional, hopefully BSI will use some of it on road repairs. Eleven million dollars, however, won’t rescue the sugar industry from the brink of collapse. All relevant partners agreed that the bailout is a temporary one and more will have to be done to stabilize the industry. And according to BSI’s Chairman, Joey Montalvo, the future of the entire industry now lies on the back of the next cane crop.

Joey Montalvo, Chairman, B.S.I.

Joey Montalvo

“This rescue package is only the beginning. We have to look forward to securing our medium and longer term debt. I will tell you right now that it is not a case of solvency or insolvency. It is a case where as any business man would understand that there is need for working capital. In our case we have to pay our cane farmers even if we started business on day one, we would need money to pay for cane deliver to the mill which will make sugar which will not be sold until towards the end of January or February. And until such time that we have that income, we still have to pay our way through. It is unthinkable that we could even countenance the thought of having a poor crop next year. That will certainly be detrimental to securing the future of the sugar industry because we have to go beyond this crop. This crop could be our last but we do not intend it to be our last crop.”

The house will meet on Friday to approve the ten million dollar loan.

Channel 5

#393968 - 12/02/10 09:05 AM Re: Finally! Sweetness & Light In Sugar Industry [Re: Marty]  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline

Still no payment for cane farmers

Alfredo Ortega

In the House of Representatives last week both sides gave their support for a bailout loan to the Belize Sugar Industries. The government and the opposition both recognized that the Sugar Industry is vital for the survival of farmers in the north. Because of the “turkey weekend” in the United States, the prime minister indicated the loan would take a few. When we checked today the money has not been drawn down because BSI has not been able to get waivers from the ING Bank. The Chairman of Committee of Management for the Belize Sugar Cane Farmer’s Association spoke to News Five via phone today about the delay and he says tension and desperation are growing among the farmers.

Via Phone: Alfredo Ortega, Chair, Committee of Management, BSCFA

“I had a telephone conversation with Mr. Belezario Carballo, the financial director of BSUI yesterday. He informed me that as of that time, about six p.m. they hadn’t received the waiver from ING. According to him, their lawyers are gathering together to check all the information given to them so that they can advise the board on the decision to take. But he said that they are quite positive that they will be receiving good response from ING.”

Delahnie Bain

“You mentioned you also spoke to the prime minister?”

Via Phone: Alfredo Ortega

“I also spoke to the prime minister yesterday evening and the position he placed to me was the same as BSI; that he has no information on the waiver. But he said that as soon as the waiver comes in he will be ordering the ten million to be placed in BSI—well at least the portion for the farmers for their third payment.”

Delahnie Bain

“Do you know how soon after the waiver from ING this money will be disbursed to you all?”

Via Phone: Alfredo Ortega

“To be honest with you, we don’t have a set date on that. It will be sent to us by BSI because they have to do their due diligence in regards to the different amounts to the farmers based on their deliveries in the last crop.”

Delahnie Bain

“What does this extended delay mean for the start of the next crop season which was supposed to be December sixth?”

Via Phone: Alfredo Ortega

“Well, according to the management of BSI, the earliest they see or the latest they see they can start is the thirteenth of December. I had in mind that the delay with funds will delay also that but according to them, they plan to start.”

The ten million dollar loan has an interest rate of seven point five percent per annum on the declining balance. It will be disbursed in two payments of three point two million and six point eight million dollars by the end of the year. The collateral is sixty-nine point twelve acres of land at mile five on the Western Highway.

Channel 5

#393969 - 12/02/10 09:06 AM Re: Finally! Sweetness & Light In Sugar Industry [Re: Marty]  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline


December 01, 2010

More than 20 days after farmers had planned on receiving their third payment, the Belize Sugar Cane Farmers Association is asking that they remain patient. Last week the government of Belize approved a 10 million dollar loan to BSI but until BSI receives a waiver from its bank, ING, the loan cannot be drawn down. Last week at the sitting of the house, Prime Minister Barrow explained that a delay in getting a waiver would be caused by the Thanksgiving holiday in the US. This week there was another delay and chairman of the BSCFA, Alfredo Ortega, says the farmers are growing impatient.

Alfredo Ortega; Chairman, BSCFA

“First it was the thanksgiving holiday in the US and now they are saying that Barbados had their vacation due to Independence Day celebration over there. Farmers have been waiting patiently we have reached today over 20 days of waiting but patients is dying. At this point in time you know that many farmers have pawned their jewelry, many farmers have went to the grocery store to get groceries on credit thinking that they were going to have their third payment of the 8th of November and that did not happen. We have made it to this point and the tension is growing. As administration we are asking the farmers to please bear with us. It is not that we are not fighting for them to get their third payment but we need them to be patient. It is not the fault of the BSCFA; it is not the fault of the government. It is BSI at fault. This is an industry and we ought to work together.”

While the famers wait for their third payment, Ortega says the BSCFA has been meeting with the farmers to ensure that the farmers keep their end of the bargain by ensuring the delivery of good quality cane to the mill and ensure the survival of the industry.

Alfredo Ortega

“We went into a second round of meetings with the group leaders and farmers where we are presenting to them the plan. We as cane farmers are putting ourselves in a position that we will deliver clean, fresh and mature cane to our factory. On the other hand the mill will be in the position to process six thousand minimum per day. On our side we have went along with the farmers and it has been accepted by all farmers present at the meeting. We need to change; we need to deliver quality cane in order for us to have quality sugar because we know that we have an opportunity to maintain the market and this is an important market for us cane farmers. Most of the farmers have said yes we need to move in this direction. There are farmers that have already said that they will be removing their push-pilers from their cane loaders. It has been a very tedious job but we are working to achieve on our side what is needed to fulfill the quality system.”

Ortega says with the farmers doing their part their plea is for BSI to speed up the process of negotiating with its Banker to ensure that the farmers receive their payment as soon as possible. The next sugar cane crop is expected to commence as scheduled on December 13.


#394048 - 12/03/10 09:06 AM Re: Finally! Sweetness & Light In Sugar Industry [Re: Marty]  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline

Gov’t disperses million dollars to cane farmers

Under pressure, the government announced today that it has disbursed a million dollar grant to the Belize Sugar Control Board to assist farmers with urgent financial obligations. The government, via a release, also chided the opposition for calling for an immediate disbursement of a ten million dollar loan to BSI for third payment to farmers as well as for working capital. The loan went through the House of Representatives and Senate late last week, but has not been released because waivers have not been made available by the ING bank to which BSI is indebted. The government release says that moving ahead without the waivers would cause a loan default by BSI, which it ominously says would lead to immediate foreclosure and collapse of the industry.

Channel 5

#394230 - 12/07/10 09:15 AM Re: Finally! Sweetness & Light In Sugar Industry [Re: Marty]  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline

Cane farmers today began receiving 94 cents per ton of sugar cane delivered to the factory for the 2009-2010 sugar cane crop. The money the farmers are receiving is from the one million dollar grant the government approved for the cane farmers as a part of the bail out. Prime Minister Dean Barrow suggested that a portion of the money be used for sugar roads but the farmers voted on it and they decided that they wanted to receive the money themselves. The disbursement is being handled by branch, so every day a different branch will received their portion of the money and the money is being distributed at the Sugar Control Board Office in Orange Walk Town. The Belize Sugar Industry had been unable to draw on the ten million dollars loan approved by government because they are waiting for the financier ING Bank to relieve them of certain commitments. In a late press release from GOB it was announced that SBI has received the necessary waivers in order to offer the $10 million for working capital to settle outstanding crop payments to the cane farmers. The release also stated that the loan will be disbursed in phases over the next two weeks.


#394234 - 12/07/10 09:22 AM Re: Finally! Sweetness & Light In Sugar Industry [Re: Marty]  
Joined: Oct 1999
Posts: 55,661
Marty Offline
Marty  Offline

Breakthrough in sugar dilemma; cane farmers receive their 3rd payment

Just before six this evening the government announced a breakthrough in the sugar dilemma and that is that the Belize Sugar Industries has received waivers from both the ING and FirstCaribbean International Banks. It means that the ten million dollar bailout loan approved by the House on November twenty-fourth for BSI can now be drawn down and farmers will be able to receive the long overdue third payments. The loan also covers working capital for the new crop season. According to the release, “government has made arrangements to release a first disbursement of three point two million dollars to BSI for value tomorrow, Tuesday seventh December for on-ward payment to the cane farmers. It is expected that the remainder of the loan will be disbursed in phases over the next two weeks.”

Meanwhile, the chairman of the BSCFA’s Committee of Management, Alfredo Ortega, says the distribution of the million dollar grant began today at the Corozal and Orange Walk branches. According to Ortega, the farmers will receive ninety-four cents per ton for deliveries made in the last crop. Ortega and Jose Mai will be guests on Open Your Eyes on Tuesday morning.

Channel 5

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