Friday, May 17, 2024

Belize Sugar Cane Farmers Association accepts compromise negotiated with the American Sugar Refinery/Belize Sugar Industries

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On Thursday, January 4th, tensions between the Belize Sugar Cane Farmers Association (BSCFA) and the American Sugar Refinery/Belize Sugar Industries (ASR/BSI) came to an end after the cane farmers accepted the renegotiated commercial agreement regarding the delivery of sugarcane to the factory. Some of the main hurdles were the throughput charges, terminal fees the BSCFA members were expected to pay, and their demands for fair-trade premiums payments for the previous two crop seasons.
The agreement details now stipulate that the commercial agreement is for two years. The Government of Belize will support the fair-trade process, and if the BSCFA does not get those payments this year, the government will provide $1 million to the farmers for fertilizers. An economic analysis of the shipping at the Big Creek in southern Belize will be done versus the Port of Belize in Belize City. This analysis is expected to be completed in three months. During this period, the government will pay the throughput fees expected to be covered by the BSCFA. Another agreement detail is that a Commission of Inquiry into ASR/BSI will be set up in the next 30 days.

The new commercial agreement was negotiated with the intervention of Prime Minister Honourable Dr. John Briceño and Minister of Agriculture Honourable Jose Mai. Briceño was out of the country on personal leave and scheduled to visit Vatican City in Rome to meet with Pope Francis. He cut his trip short and returned to Belize to address the situation, which had led to protests and even the blockade of the Philip Goldson Highway.
What was the previous commercial agreement?
The proposed agreement for BSCFA was a negotiation that would include a three-year extension to bring stability and encourage investment. However, what led to the escalation of the current situation is what the farmers claim was the inclusion of throughput charges (transportation fee) and terminal fees and the exclusion of the pending fair-trade premiums from the private sugar company. BSCFA refused to pay these charges and has demanded that they be removed from the agreement. ASR/BSI, on the other hand, said such fees need to be included in the agreement. The BSCFA noted that such charges are new and unjust. As a result of the disagreement, BSCFA did not sign the contract and went on to protest. Some of the developments that have taken place include the blockade of the Philip Goldson Highway and tires set on fire as well.
ASR/BSI explained
ASR/BSI’s Director of Finance, Shawn Chavarria, explained that port charges have always been a core part of the commercial agreement and are included as a shared cost. “So, that was not something new,” he said. “That agreement was signed with the three other associations, but BSCFA wanted a new agreement that moved to gross value, 60-40. Perhaps indeed that might be the point of contention that it was not very clear in the commercial agreement, although we have done all the presentations, shared all the information, and certainly in the key price estimates that we were providing the associations that it was stipulated there. Going forward, that’s what we want to seek to ensure, that it’s clear to all parties what now constitutes the shipping costs, of which throughput fees is one of them.” However, the BSCFA has not been convinced to compromise to cover these fees.”
Regarding the fair-trade premiums, the sugar company said they have never paid or conveyed fair-trade premiums since it was introduced in Belize in 2008. The company noted that BSCFA has had no letter of agreement with ASR’s parent organization Tate and Lyle Sugars, since 2021. Therefore, the company stated that BSCFA is not entitled to any premiums.
ASR/BSI added that they will continue working with their partners for the betterment of the Belize sugar industry. The company shared that 2023 yielded the highest cane price ever, giving the northern sugar industry certainty.
As negotiations finally continue, the Belize Agricultural Health Authority will investigate if these charges are justified. A report will then be submitted on the validity of the fees BSCFA is disputing. If the charges are unjustified, another type of negotiation will take effect.
A similar situation occurred in December 2021 involving ASR/BSI and the BSCFA. At that time, the issue was regarding the expiration terms of an interim agreement. Sugar Cane Farmers were expecting the contract to last throughout the crop, which usually extends to August, but instead, this was scheduled to close in April of that year. The problem was resolved early in January 2022 when the parties agreed to an August extension.

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