A.S.R./B.S.I. and B.S.C.F.A. Still Have Fundamental Differences

The 2021-2022 sugar crop comes to a close on Friday, and while the season got off to a rocky start, the American Sugar Refinery/Belize Sugar Industries (A.S.R./B.S.I.) says it ended on solid footing. At the start of the year, there was bad weather that caused unforeseen delays and a protest by members of the Belize Sugar Cane Farmers’ Association (B.S.C.F.A.) who have had a live concern – they want higher prices for their produce, primarily bagasse. That is still the concern now at the close of the season. News Five’s Marion Ali was in Orange Walk today and spoke with the parties concerned.

Marion Ali, Reporting
Today at the Tower Hill compound, there were hot dog and soda treats for employees, truck drivers and some of the cane farmers who have delivered to the factory during the crop season. Although the year started off on a slow pace, it ended relatively well. So today, the factory had what they called a Sweet Wrap Up of its fifty-fifth season, according to A.S.R./B.S.I.'s Cane Farmers' Relations Manager, Olivia Carballo-Avilez.

Olivia Carballo-Avilez, Cane Farmers' Relations Manager, ASR/BSI

"We usually have this event at the start of the crop season. Of course we were unable to do that but we still want to end off this crop very positive. We have some very positive numbers, even though we had major challenges during this crop. At this time, we have one point one five, five million tons of cane, which is relatively good."

But while A.S.R./B.S.I. celebrated the accomplishments, there is still a pending dispute that needs to be settled between the miller and the largest cane farmers association in the country, the Belize Sugar Cane Farmers Association. At the heart of the matter is a pending commercial�agreement that both parties are yet to sign. The association wants higher payments for bagasse, but B.S.I.'s Director of Finance, Shawn Chavarria, says the company has put its best offer on the table and that the B.S.C.F.A. has refused to accept.

Shawn Chavarria, Director of Finance, B.S.I./A.S.R

"There probably needs to be a reset from the B.S.C.F.A.'s negotiating team to really objectively analyze the situation, analyze the facts that we have presented to show what the impacts of their proposals would have. We have presented two proposals. We have looked at their option of a sixty-forty value share. We have said we are prepared to work with that. The only fundamental difference that we have compared to that is that one, they want a higher payment for bagasse, which we have explained to them we can't do and we have demonstrated why. We have provided them with the audited financial statements from BELCOGEN to show that it is making losses and it has cumulative losses. The added step was taken of showing them the power-purchase agreement with B.E.L. to show that the tariffs that BELCOGEN receives do not include a value for bagasse."

But the B.S.C.F.A. says its research information has determined the exact opposite.

Oscar Alonzo, C.E.O., B.S.C.F.A.

"We have done our research. We have looked at the figures that B.S.I. themselves have provided us every month, every year in terms of how they calculate it, and we have seen where they have been unfairly been using the cost factor see how they could have our farmers pay more for these things. So it’s not that we are going about it emotionally where we went to sleep one night after some drinks and then woke up with a clever plan that you should pay us more, no. We have done our research based on the figures. We have done research of other sugar industries in the region. We have even done research with Santander that provides us with the justifications for a fair price. Right now Santander, by our research, paid their farmers fifty four percent of the gross value."

Marion Ali
"And your farmers are getting�"

Oscar Alonzo
"Forty-eight percent only."

The B.S.C.F.A. is asking for government’s intervention, saying that the advisor that has been introduced into the fray, retired minister Florencio Marin Sr. is only an advisor to the Belize Sugar Cane Board.

Oscar Alonzo

"We do not understand that he came in as a mediator. We understand that he came in as an advisor to the Sugar Industry Control Board. We have not received anything formally or officially from government that clearly states that he is there as a mediator. We made a presentation to him in detail. In fact, our lawyer, Marissa Longsworth also clearly outlined to him the different legal implications of what B.S.I. is proposing and what we are proposing and how B.S.I. is behaving and how we are behaving and he is aware."

Marin, however, who was present for the celebration at Tower Hill, has an opinion on the way the negotiations have been going.

Florencio Marin Sr, Advisor, Belize Sugar Industry Control Board

"It’s not a take or leave it situation. In any negotiation you sit down you discuss you rationalize the issues on the table. As far as I am concerned, neither B.S.I./A.S.R. nor B.S.C.F.A. has exhausted the negotiating process. There is room for both of them to sit down and continue the negotiating process�until they come to an agreement. That B.S.I. reacts and says no, they can’t afford to pay it. I expect that reaction. But I also expect the Cane Farmers to do their homework and come up with arguments and figures and tell them "we go through this expense and we need to recover costs."

Despite the fact that there is no commercial agreement in place, B.S.C.F.A.'s C.E.O., Oscar Alonzo does not foresee that there will be another protest by their membership when the new crop begins because his hope is that there will be a bigger push from the government to move the conversation beyond this point.

Over A Hundred Thousand Tons of Sugar Cane Lost This Year

While the two parties continue to negotiate to sign off on a commercial agreement, another issue this year was that there were significant losses from cane that remained in the field, or what is called stand-over cane.� The numbers we've been given are around a hundred thousand tons of cane that will go to waste in the fields.

Olivia Carballo-Avilez, Cane Farmers' Relations Manager, A.S.R./B.S.I.

"Last year we were at around one point two one million tons, so we're short around fifty thousand tons from last year. Last year, as we are aware, only about twenty thousand to thirty thousand tons of stand-over cane was left. We had several challenges this year. We started late; we could have started on December twentieth. It is when the mill was ready and we were ready to go. We had challenges with weather issues. We had a stop for about fourteen days, which really you cannot take back. Those days are gone, so because of the finite time of a crop season, we have to wrap things up and start our repair season because after this, when the gates are closed, the whole mill is going to be taken down, repaired and then put back up in time for the next crop."

Oscar Alonzo, C.E.O., B.S.C.F.A.

"It is unfair that farmers have to have their cane already tied into a manufacturer that is unable to grind that cane. Even though BSI has been boasting tremendous investments, these investments have not been going in the area that really benefits the cane farmers, which is the grinding rate."

Several Factors Hover Over Dispute between A.S.R./B.S.I. and B.S.C.F.A.

The dispute between A.S.R./B.S.I. and the B.S.C.F.A. Sugar Cane Farmers Association hovers mainly over them not being able to come to terms on a commercial agreement. But to sign off on that agreement, there are several factors at play. We heard from both sides today about what their gripe is with the other. What they both seem to agree on is that the other party has not been fair in their approach.

Oscar Alonzo, B.S.C.F.A., B.S.C.F.A.

"The formula that they are proposing is worst than we would get and the formula that we are saying let us negotiate - we started at sixty-forty but they are saying they are not willing to negotiate if it involves the transfer of value from them to us.

Okay, if forty is not amenable to you, let us come to see - can we get forty-two, and so on. But they are firmly bent on all their proposals to not budget all. In fact, they are even implementing one of their proposals that we are still negotiating and haven't come to an agreement with. That has to do with changing the terminology of one of these costs from ocean freight to ocean freight and terminal handling and another one - adding the matter of stevedoring fee. Those are two costs that they are altering without us having negotiated and reached an agreement. What we're seeing with B.S.I. is that they are using these costs as a means of introducing their investments and to try to use it to recover it totally at our expense without us being able to verify that those expenses are really such."

Shawn Chavarria, Director of Finance, B.S.I./A.S.R.

"One of the big factors we really want to see is an objective assessment under part of the B.S.C.F.A. negotiating team assessment team to assess not only the current realities but also the economic arguments that we have presented as to why their proposals would not work. It would result in a 20 million dollar transfer of value away from the mill to the B.S.C.F.A. in a time when we have just come off $100 million dollar of investment value added in Big Creek, in these environmental projects. So simply that would lead being unviable. It would mean a shutdown of the industry, which is not in anyone’s interest."

Channel 5