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Citrus Greening Takes Toll on Industry

Posted By: Marty

Citrus Greening Takes Toll on Industry - 04/19/18 12:18 PM

Citrus production will see a sharp decline of almost seven hundred thousand boxes of oranges this year, down from three point two million in 2017.  That downturn is being attributed to HLB, or citrus greening, disease.  While production of grapefruit goes up, there are concerns that both fruits are being sold across the border to Guatemala.  According to C.E.O. Henry Anderson, there is a method being used to manage the spread of the insect which spreads HLB.

Henry Anderson, Chief Executive Officer, CGA

“As you know, Isani, from, I guess, back in 2009 we found Huanglongbing, HLB, in the industry and it has been a challenge in terms of how to manage and adopt and change the way we grow citrus, to manage that situation.  As we speak, the production for this year, or I should say, the fruits delivered to the factory, we expect about two point five million oranges and two hundred thousand grapefruits.  In the case of grapefruits that’s an increase over last year, however, in the case of oranges that’s a decrease.  We did about three point two million oranges last year.  Notice I said in terms of the amount boxes delivered to the factory because we believe there are two, or several factors affecting it: leakage, fresh fruits being ship to Guatemala and also we think the production declined for this year with the orange.  The orange is an alternate bearing crop so two years you will get high, then one down, then two up.  However, it’s a troubling thing, in the sense that it shows that we need to do more, faster and quicker, to be able to get the trees in the ground.  We are dealing with a disease that gets the trees sick and there’s a four-pronged approach to managing it.  My colleague Ms. Manzanero will discuss that so it’s not impossible by any means.  It’s just something that requires science and discipline.  In the case of grapefruit, for example, which is more difficult to grow with HLB than oranges.  We have had quite a bit of the grapefruit acreages taken out, probably about six to seven hundred acres that are taken out over the last year, old trees, older than you and I put together, and you could probably add some to that.  Farmers are getting ready to replant, but for the grapefruits that stayed behind, with the proper management the production should go up by probably five percent or so.”

How Nursery Can Still Save Citrus

Despite its financial woes, all is not doom and gloom in the citrus industry.  There is optimism to report from the Plant World Nursery project.  C.E.O. Anderson believes that once it gets off the ground fully and the arrears are covered, the investment will provide monies for its stakeholders.

Henry Anderson, Chief Executive Officer, CGA

“We do not envisage Plant World Nursery just sitting and holding cash, it is for investors to grow in.  So if you are a grower and you buy shares in Plant World, you know that when you are paying X for a plant, you are getting back some through your dividends.  So it‘s like a hedge, the bond interest will be paid likewise January and July and you‘ll have a fiscal agent who will manage all of those things, you know.  So the security, there will be a sinking fund for the preferred shareholders managed by the agent.  From the revenue of the sales certain amounts will go directly to the sinking fund, so the management of Plant World can‘t touch that, it flies straight in.  Off the top, Heritage Financial Services will serve as the fiscal agent.  We had tried to see if government would consider any, to waive the taxes on these incomes but they said no, so it‘s like any other investment.  We will have a call option for the preferred stock on the bonds after 2020, just because the interest rates are very competitive and high ones.  These are not rated, no investment instrument in Belize is rated, I think that‘s something that as the market grows, will come.  Full financial disclosure in terms of audited financial statements and everything like that.  One of the other things, CGA will have a right of first refusal, so if a shareholder wants to sell, for shareholders, then CGA has the first right of refusal to buy, if they want to buy.  This is how Plant World has started, at this time, this is how we just started when it was erected, so it was not a complete production system or cycle at the time.  This, at this point, is where we had the facility by SSB, about two point five million facility, call it one and a half million facility so the plant sales jumped up quickly.”

C.G.A. Fighting to Save Plant World Nursery from Receivership

There is mounting trouble in the citrus industry in the south. Already facing a significant decline in production, down to three million boxes, the news tonight is that the Citrus Growers Association is in deep financial trouble. Faced with a five million dollar debt which it has been unable to pay for its plant nursery programme, the Atlantic Bank is set to foreclose on the nursery so that other than a rebound, the CGA is plunging into a deeper financial hold.  As a solution, the CGA is trying to float a bond through the Legacy Fund for eight and a half million dollars.  News Five’s Isani Cayetano reports.

Isani Cayetano, Reporting

Citrus is a delicate business and, despite its place as the second largest agriculture industry in Belize, remains in dire straits.  Farmers, both large and small, are deeply invested in this area of the agro-productive sector and they are, for the most part, represented by the Citrus Growers Association.  The CGA, however, is indebted to the tune of almost five million dollars for a pair of loans with the Atlantic Bank Limited.  News Five understands that of the amount borrowed, one point seven million dollars was reportedly used to establish Plant World Nursery, a garden center that would provide various plants aside from citrus.

Veronica Manzanero, Research and Extension Director, CREI

“Plant World is one of the seventeen nurseries that is currently registered under the Belize Citrus Certification Program which is a program in the industry that ensures that citrus nurseries provide only clean certified disease-free plants to the industry.  And so it is the largest nursery, it has the ability to produce between three hundred and fifty to four hundred thousand plants per year and it is located on the Red Bank Road, just at the junction of Red Bank and the Southern Highway.”

Henry Anderson, Chief Executive Officer, CGA

“So why Plant World Nursery?  Now as the name says, it says Plant World, it didn’t say Citrus World, because the vision is to go in line with what I was saying, to produce different types of plants that produce either the fruits or vegetables going down the road that would be juiced in the industry.  That’s the vision, right.”

That concept, it would seem, has plunged the association deeper into the red, as it has been unable to keep up with debt obligations to the lending institution.  However noble an idea Plant World Nursery is, Atlantic Bank, we are told, is ready to foreclose on the venture.

Henry Anderson

“It’s the largest state of the art nursery in Belize, one of the largest in the region.  We have a world class management system.  It doesn’t have the ISO-2015 certification yet, we are aiming to get that done by December.  That’s what the project deadline was so we’re still aiming towards that.  It’s part of a value chain.”

That value chain, as described, by Henry Anderson, Chief Executive Officer for the Citrus Growers Association, extends beyond the sale of plants.

Henry Anderson

“When we talk about Plant World Nursery, it’s not just the nursery, right, because the interest is not just to sell plants; the interest is to sell production.  Charles Revlon, when they asked him what he was selling, he wasn’t selling shampoo or makeup.  He was selling hope in a bottle, that’s the solution.  Well what we’re trying to sell is pound solids, so Plant World forms part of an integrated value chain.”

The other loan taken with Atlantic Bank was for two million dollars, an investment that was made in a fertilizer program.  Together with the finance borrowed for Plant World Nursery, the pair of loans amount to three point seven million dollars.  To date it has accrued an interest of a little over one million dollars.  While we are informed that Retired Brigadier General Robert Garcia has been appointed as receiver of Plant World Nursery, efforts are being made by CGA to rectify its financial crunch through a bond initiative with the Legacy Fund.

Henry Anderson

“We are working with Legacy, Mr. Irvin Perez and Legacy Fund, to raise eight point five million dollars.  If you look here, you are talking about a million selling in common shares, a million selling in preferred shares and six and a half million in bonds.  When we started this, we were trying and when we approached Legacy they said, let’s try to work with it in shares because you have about three hundred million in liquidity in Belize.  The size of this project and it’s an agriculture project and all things agriculture has ebb and flows, right.  Hurricane Earl came, it slowed down the movement of plants and things of that nature.  The financing for growers was delayed so we have to find ways to keep the project going to grow it but, you know, when the bank comes into the project they are coming in to get in, make their interest and move.  They are not there for the very long haul.”

Channel 5

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