BSCFA says ASR/BSI dragging their feet

Black Immigrant Daily News

If the situation between cane farmers and BSI/ASR is not resolved, sooner or later, farmers will begin phasing out of the industry, BSCFA chairman Andy Westby said.

by Khaila Gentle

ORANGE WALK TOWN, Thurs. Oct. 20, 2022

The Belize Sugar Cane Farmers Association (BSCFA) says that they have been proposing, for a number of years, the use of a mediator to quash the impasse between the association and BSI/ASR, which need to agree to the terms of a new commercial agreement prior to the start of the approaching sugar crop season in December. The association held a press conference in Orange Walk this Thursday to respond to statements made by the Prime Minister, Hon. John Briceño, this week. In an interview outside the National Assembly building, Prime Minister Briceño told reporters that both parties (BSI/ASR and BSCFA) had finally agreed to a mediation process that is set to begin in a few weeks.

“What we’ve been discussing and something that we have proposed to both teams is for us to have a mediator—a mediator that can sit with both sides and try to see what are the sticking points and see how we can walk them through to find an agreement,” he said.

This was also revealed by Director of Finance of BSI, Shawn Chavarria, who told 7News reporters on Tuesday that the company and the association had agreed to invite an independent mediator to assist with negotiations.

The vice chairman of the Belize Sugar Cane Farmers Association, Alfredo Ortega, says that the BSCFA has been suggesting the use of a mediator for as much as seven years now. According to Ortega, the first time they made such a proposal, in 2015, it was flatly rejected by BSI/ASR. The association then took the matter to the government, a then UDP administration, which failed to provide an independent mediator.

BSCFA chairman, Andy Westby, says that it is now up to the current administration to succeed where the past one failed. In November of last year, the association submitted their proposal to the Briceño administration, and two weeks ago, almost one year later, BSI/ASR finally indicated that they were prepared to undergo negotiations with the aid of a mediator.

The BSCFA is hoping to resolve the impasse with BSI/ASR before the start of the next crop season in December of this year. One of the main points of contention between the two parties has been what the BSCFA feels is the unfair division of profits from cane production and sales.

The current mechanism being used to share revenue between the cane producers (BSCFA) and the millers (BSI/ASR) sees BSCFA receiving 35% of the revenue, while the BSI/ASR receives 65%, but this division is done only after BSI/ASR has removed overhead costs from the total revenue. According to the cane farmers, this equates to them paying for costs that they have nothing to do with.

The BSCFA also feels that they are being kept in the dark when it comes to the accuracy of those overhead costs. And so, to make things easier and make progress with the negotiations, the association wants to split the gross revenue rather than the revenue left after overhead costs are taken out. And they want to split it 40/60—just as is the case with cane farmers and millers in Brazil and other parts of the world.

“And that is why we have brought to the table that we need these negotiations to go on so that we can have clearly that what is being charged to the farmers—the expenses that are being charged to the farmers—are a true reflection of what they are supposed to be,” said Ortega.

According to Ortega, BSI has said that a 40/60 split would mean transferring 20 million dollars over to the farmers, something which the company says it is unable to do. The Prime Minister, on Monday, also agreed that that request would be unfeasible, stating “To be fair, no company will give up twenty million dollars, and I’ve been saying that to the Belize Cane Farmers Association, that if you give up twenty million dollars for revenues of what, they end up with about sixty million—you’re driving them to bankruptcy. And we need both sides.”

The chairman of the Association said the Prime Minister’s statement was disappointing.

“We were a bit disappointed when the Prime Minster mentioned that no company will transfer 20 million to us as cane farmers. I want to clarify that point—it’s not a matter of transfer. It’s a matter of reflecting the true cost that is being charged on overhead expenses where we as farmers are spending sixty five percent of our money on those costs and those numbers are not disclosed to us in detail in [BSI’s] added report. So we as the BSCFA—if these costs would reflect the true value … then there would be a just payment for both sides,” Westby said.

If an agreement is not made soon, said Westby, farmers will begin to phase out of the sugar industry and will go out of business.

“This is the third time that the Prime Minister has made mention in regards to the transfer of value of twenty million. Because that is what BSI brought up. And these are things that as BSCFA—because as you can clearly see we have 3 other associations—but it is the BSCFA that is in this path moving forward in finding true benefit for our farmers because, as the chairman rightly said, if we are unable to find or to get better value for our product, we’ll be phased out. And as you know, for the past fifty, sixty years, the north, the people from the north have been living, have been getting their benefits out of the sugar industry,” added Vice Chairman Ortega.

Ortega then added that the BSCFA has been prepared “from day one” to negotiate, but BSI/ASR have been “dragging their feet.”

At the moment, the situation between the two parties remains a delicate one, but the BSCFA is standing firm in their proposals.

“This is an industry that is the backbone of the country,” said Andy Westby. “And government cannot be neglecting the fact that this is their responsibility … They have to get up and take their responsibilities serious, because this is an industry that will benefit all of us here in Belize. And if that industry goes down, 50 thousand plus in the north will also go down. And everybody that depends on it directly and indirectly will go down.”

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