Cash Crisis In Cane Country
Tonight, cane farmers in the north are saying that they’ve received “a terrible blow” with what is known as the “second payment” for sugar.
As might have been expected, with world sugar prices crashing, the payment is very low - and farmers are saying they won’t be able to pay their loans, and may have to abandon the industry.
It’s a cane crisis all right - and today our colleagues at CTV-3 heard from both the millers and the producers - here’s what they had to say to each other about the prices and the future:…
Fred Ortega - Chairman, OW Branch, BSCFA
"This information came in yesterday, it came in with a lot of surprise because as you rightly said the lowest group is getting 3 dollars and 81 cents which is a test group of BSCFA group number 10 and the high is CGPBSI getting 6 dollars, a little bit over 6 dollars. On which it's very hard for us as farmers at this point in time because many things that happened, many farmers are in debt with a commercial bank and some of us is in debt with our own association in regards to herbicides and materials that we have gotten. So really what is coming on right now for the different test group as a second payment is really harmful, really hurtful to us as farmers and in many ways it’s very hard to accept on what is going on at this point in time."
Mac McLachlan - VP, Int'l Relations, ASR
"Well frankly I don't think it should be quite such a surprise. The sugar as we've been saying for a long time now is a global market, it relies on global pricing. Since October last year the preferences we use to enjoy in pricing in the European Union disappeared overnight due to changes in the EU regime; been talking about that now for the past 3 or 4 years, ever since that time was established, that timeline."
"The reality of the situation is that when it comes to the price of sugar in the preferential market in the world market, it has seen a huge reduction due to the competition of beet sugar now. That is the defence they are going to be using of why we saw this huge reduction, it was expected. What do you think about that?"
"Yes that has a situation, we do know that has certain things to do with this but we don't believe that our sugar should go too low as is at this point in time. Why is it that we don't believe - because sugar from sugar cane is much better than sugar from beet."
"Now what I can say is that due to prudence and investment we've made here that's moving as everybody knows towards higher added value products we are able to maintain a price that is higher than it would have been - if it was just based purely on raw sugar as it used to be the case."
"The time is calling now that a committee needs to be set where there is representation from BSI or ASR, from the production sector and also from government on which that should be named the marketing committee so that we have a committee and as farmers we can clearly see that negotiations are being done in a transparent way. At this point in time where it is, as is, we don't have any confidence that things are going that direction. So for us to survive and for this industry to really take the step that we are looking forward, there needs to be a really strong negotiation amongst ourselves, amongst the miller and the government included into this. So all 3 of us need to come together to a table and we look forward into how we can reduce cost in all angles possible in our side, the side of the millers and also how the government can help us in regards to the infrastructure, the roads, all the necessities needed for farmers that transport their material faster to the mill."
"For me in the cane farm it's 2 things. One is reducing the cost of the production sugar but it’s also how to maximize the revenue that you get for your sugar cane by improving the productivity of land but on less land, so that you're putting in less inputs and receiving more revenue and those are the 2 keys to improving the financial position for cane farmers."
"What can be moved, what can be done because the way things are going, it is ditching out farmers out of the industry."
"It’s not a pretty picture and we all accept that, it’s not a pretty picture for any sugar manufacturers in the world. We would say that no sugar manufacturers can produce sugar at the cost of the global pricing at the moment. I'm sure that industries are suffering all over the world and in times of adversity like this, I think it’s incumbent on all of us as an industry to look at how we can improve our efficiencies and improve our strategies so that we can survive these hard times in the knowledge that as a cyclical commodity market, prices will change in the future as they always do."
The Corozal Sugar Cane Producers Association sent out a release saying, quote, “most (farmers) could face losing their opportunity as a stakeholder of the industry…the present extremely low sugar cane price…could take them into the likely extinction and their livelihood destroyed as a farmer and as a stakeholder of the industry.