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Jan 5, 2015

Regression in Sugar Negotiations, B.S.C.F.A. Rejects B.S.I.’s Proposal

Turning to another major issue…The sugar cane crop season and the sugar industry are in serious jeopardy; in fact, the situation has regressed. At an emergency meeting of cane-farmers on Sunday, a majority rejected the proposed agreement between ASR/B.S.I. and the B.S.C.F.A., which means that for all intents and purposes, negotiations have broken down completely. Approximately fifteen hundred farmers were in San Roman, and an overwhelming majority voted against the agreement, hammered out after government intervention. The meeting was intense and discussions were fiery, but in the end the sentiment was clear. Mike Rudon was in San Roman and has the story. 

 

Mike Rudon, Reporting

It was the biggest crowd we’ve ever seen at any general assembly meeting of cane-farmers. There was only one item on the agenda – the proposed agreement between ASR/B.S.I. and the B.S.C.F.A. The Association has in the past weeks splintered into two distinct and warring groups. One group wants the agreement signed, and the other wants to go back to the table to negotiate a better deal. The decision, one way or the other, would be made on this day, so tensions and emotions were running high. That was obvious early on, when farmers requested that attorney Audrey Matura-Shepherd be allowed to make a presentation, and the Chairman of the B.S.C.F.A. tried to object.

 

And that is how it would continue throughout the day, with Police keeping a very close eye on the proceedings. The agreement was ventilated in detail by B.S.C.F.A. attorney Chris Coye who broke down the three main points of the final draft. And after a prolonged question and answer session, attorney Audrey Matura-Shepherd was allowed to address cane-farmers.

 

Audrey Matura-Shepherd

Audrey Matura-Shepherd, Attorney for Lucilo Teck

“I outlined to them the legal options they have based on the law which is what he is relying on. And they are going to ask that a resolution pass that the assembly accept to join in the case with him to bring the matter before the court. Basically what I explained to them and what I’ve been saying all along in different interviews, is that there is a provision in the law where the sugar industry control board as an autonomous body—that can sue and be sued in its own name—has to set a date. It is not optional; it has to set a date and the law also says the manufacturer has to accept deliveries. So I am telling them while there are these legal options, they also have to be prepared to deal with the fact that some people will not want to obey it and that there are mechanism in law how to get people to enforce an order. And that the truth is that in light of everything that is going on the best thing to do is to resolve the problem peacefully and to let them know that there are provisions of law that they can rely on.”

 

Matura-Shepherd says that while the end decision will be made by farmers, she had to at least do her part because they are being victimized by other stakeholders with an agenda, which does not contemplate a better future or benefits for those farmers.

 

Audrey Matura-Shepherd

“It’s the ASR and B.S.I.; it is the Sugar Industry Board that does not want to comply with its demands under the law and it is the government that has teamed up against the cane farmers. So clearly this will not be an easy walk in the park. All I can tell them is that these are legal options and I cannot give them in a flask a thing call courage and the will to fight. They have to decide. If they decide that they want to sign the agreement today, I am fine with that.”

 

It was crystal clear from early on that the tide had turned against ASR/B.S.I. and against those in the Association who advocated for the signing of the agreement, and so it was that at two o’clock, farmers overwhelmingly rejected signing onto the agreement with the factory.

 

Alfredo Ortega

Alfredo Ortega, Branch Director, B.S.C.F.A.

“I think that we started a round of meetings from sicken last week where Miss Audrey Matura went around explain gin to farmers in regards to what are the legal points that can be used in favor of the farmers. And we will continue with that; going around with the farmers. From here on I think that we need to switch a little bit different in how we have been going around passing information to them. I think we need to go a little more in-depth so that they can have more knowledge on what is transpiring. But we will be holding hands with Miss Matura so that she can go around with us explaining to farmers the legal term and what the implications are.”

 

Holding hands with Audrey Matura-Shepherd means that the BSCFA will be going the legal route. That generally means a long drawn out process which can drag out indefinitely. And realistically speaking, time is something that neither the cane-farmers nor the factory can afford to waste.

 

Alfredo Ortega

“If B.S.I. is serious and if the SICB is serious, I don’t think we have to wait anything for the court. I think that we can sit down around the table, put together a date to start the crop, start the crop and let us continue negotiation. But the negotiation should be looking forward into terms that will be beneficial to the farmers—not only to one side but to both sides. I think at the last meeting, as Miss Matura has said, I think that the farmers were really in a sign of duress and they were not thinking too much on what was really happening or what the situation would have been in terms of accepting this agreement as is. I think that now they have realized and have understood more in-depth what the situation would be and what the negative impact would be against them. So I think that today they came with a more settled mind and having a better knowledge of what this is all about and I think that on that they took their decision today.”

 

So with all that said and done, all eyes will be on the SICB, which has maintained that it cannot force the farmers to deliver cane, and even if they do, cannot force the factory to mill it. Really at this point, everything in the industry hinges on what the SICB does next.

 

Audrey Matura-Shepherd

“Maybe that will be another legal dispute, but I’m telling you, if you read the section of the law. It says the manufacturer shall accept deliveries of sugar cane. Shall in law means mandatory, it must. That is when the SICB, we will see what kind of gumption and what kind of legal standing they have to make sure that an order that they give is obeyed by an entity which is not above the law.”

 

Mike Rudon

“Are you satisfied with what has happened here today that the farmers do understand the agreement now, even if they didn’t before?”

 

Audrey Matura-Shepherd

“Well before I spoke, I’m glad that Mister Chris Coye spoke, explained a lot to them and was also able to tell them what his professional opinion was and what his instruction was. Really right here as you notice I’ve removed myself from the assembly because I think it is their decision; it is not mine. I gave my information, I did what I had to do and let them decide.”

 

According to Ortega, a letter will be sent immediately to the SICB challenging them to act, under threat of legal action. Mike Rudon for News Five.

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6 Responses for “Regression in Sugar Negotiations, B.S.C.F.A. Rejects B.S.I.’s Proposal”

  1. Carl says:

    Good Day,

    I can understand that the Sugar Industry is at a very critical juncture. The livelyhood of the North along with the entire country of Belize is at stake. I hear individuals speak of Nationalizing the Sugar Industry; I believe that wouldn’t be a smart thing to do at this point because of the importance of capital investment. Capital Investment in a country is important for development all around and with BSI/ASR already injecting millions of dollars into the improvement and overall milling capacity of the industry is a plus. It is because of these investments and expertise that the farmers will now be able deliver more and more cane this year and in the years to come.

    I have listened to the demands of the farmers and it sounds like they are being ‘misled’ in a way. When actually sitting down and comparing the previous interim agreement with this new agreement there are much more benefits for the farmers. One of the major points of contention is the payment for bagasse. BSI is actually willing to pay something for the bagasse and that is surprising. BSI would be the second sugar factory (first privately owned) in the world to issue some kind of compensation for bagasse. I am not sure of people are aware of this but when Belcogen was in planning, BSI went to the cane farmers (BSCFA) and asked them if they wanted to join and invest so that they could share profits from electricity. The outcome of that was unsuccessful and the BSCFA declined. Now, all of this has come back to haunt the Sugar Industry in a way.

    The objective at this point is to get an agreement signed. It is important to note that an agreement between both parties “IS NEEDED AND MUST BE SIGNED” for the Sugar Cane to be delivered. I believe this is one way the farmers are being misled in telling them they can start without an agreement. I am not saying that the agreement is a great one but it is good, acceptable and more than BSI/ASR has ever offered before. I really hope there is an agreement soon before unwanted events occur that can forever leave a scar on Belize from a financial standpoint.

    It is important to know all details of this Sugar Industry situation before you make any comment on it. Hopefully there is a signed agreement soon so that we all can move on and be continually productive in our lives.

    Best Regards,
    Carl

  2. CEO says:

    Good deal! Stand together!

    You may lose some now but in the future there is much more to gain.

  3. CEO says:

    Carl sound like someone with vested interest on the BSI side!

    The farmers did not have to jump at an offer to sell bagasse to no one. If they see it as a good time to get on board now then that is ok. Sounds like you are suggesting that they should be penalized for not coming on board when they were offered the opportunity. Hey maybe they did not see it as a good deal then but they do now: so what?

    So what if no other sugar factory is paying for bagasse does this mean the farmers should never be paid their due? Perhaps you are suggesting that because it is not done it should never be done! Your mentality is backwards and as such there would never be any improvements any where in the world if all we would do is look around to see what has been done and we all just continue with the status quo. The farmers should never give up their rights to any product or byproduct of the industry. What if within 5 years some new technology finds a more valuable use for bagasse the fat rats should be grateful and pay the farmers more.

    Bottom line is the farmers can do without BSI but BSI cannot sell a grain of sugar without the farmers.

    Take your hear out your posteriorial sphincter.

  4. Carl says:

    Let’s be professional and respectable here and do away with the name calling. All I am doing is mentioning the facts. I’m being objective as possible and I do agree that the farmers should get some kind of payment for bagasse that is beyond the fact that they didn’t have an input when BSI requested about 8 years ago. BSI is now making it possible for this to happen with the promise that they can go back to the negotiating table later to re-negotiate a price when more of a profit is made. I am being progressive with my thoughts, you need to view both the old and new agreements to understand what is taking place here. All in all, BSI needs the farmers and the farmers need BSI so that the livelihood of all the people are safe.

    @CEO – I hope you are educated enough to read between the lines and know the facts. It seems like you are basing your thoughts merely on opinions and feelings.

    Regards,
    Carl

  5. Belizean says:

    @CEO
    Answer this question: Why did everything work fine until there was a facility to produce energy out of baggasse? All these years happy cane selling!!! All of a sudden when OTHER people make an investment, they want a cut out of someone elses’ pie!!! BSI does not need the farmers. To sell sugar yes, but not to get back their investment. They will leave. They are bigger than what you see in Tower Hill. The farmers do not understand who they are dealing with. And now they want to go to Court? Now tell me where they have their heads!! I think Carl is right, they are being misled, extremely misled. Someone in the BSCFA’s leadership is deceiving the farmers. If I buy a bottle of coca cola. I pay 1.25. One dollar is for the liquid and .25 is for the glass, What I do with that glass is NONE of Bowens business now is it? Tell me mr CEO..WHAT WILL THE FARMERS DO WITHOUT BSI? Will they set up a factory? Lets check…last time I remember when the farmers had majority share of the factory, they RAN IT INTO THE GROUND!!!!!

  6. Belizean to the core says:

    Belizeans, it is amazing how much misinformation is surrounding this issue. First off the cane farmers never owned the factory it was the Workers in BSI, from the smallest paid worker to the managers who make over $30,000.00 a month and still want more (go figure). The other is that of value. If you have grass in your back yard that you keep chopping up and throwing away because it’s so much that it becomes a nuisance to you, it is in fact a liability to you because you incur expenses to get rid of it. However, if a person (investor) finds a use to it, from which he is making or is going to make money (millions) you would really be not so smart if you just let him have it, especially if this type of grass is the one he needs and only you have it! At this point in time the very same grass becomes an asset simply because it has acquired value! What is insulting is that BSI confessed on the media many times that when they went to negotiate the sale of electricity with BEL the value they gave the bagasse was $0.00. That’s tantamount to you going into someone’s backyard and taking their grass to make money without their permission and without striking a deal! However, there were other things that was extremely disadvantageous for the cane farmers is the fact that the Government and BSI came together to force them to sign an agreement under duress. The cane farmers need BSCIB to fix the date of the start of the grinding season so that they start to make money. If not the end up in debts on to of debts. I have you that ASR (the owner of BSI now) is a multi-billion dollar transnational company and they can afford to take losses sit and wait until the farmers collapse. This is not a level playing field and in negotiations with good faith on the table the negotiation must be fair and balanced! You wouldn’t want to sit down to negotiate with someone who puts something in front of you as a proposal and tell you to take it or else he will shoot you. You will take it even if you know that you can and should be a better deal. Now, in regards to the sale of bagasse, yes there are a few countries (e.g. Mauritius) where the cane farmer is paid by the factory, by law, over $3US per ton of bagasse and not 51 cents Belize. Take a look at some of the facts surrounding this issue read and inform yourself.

    1. The Belize Sugar Cane Farmer’s Association (BSCFA) represents all Cane Farmers in Belize simply because all cane farmers belong to this association.
    2. Belize Sugar Industry (BSI) was previously owned by the Factory Workers who had 81% of shares of the Company. They had to pay 35 Million dollars to an English Company called “Tate and Lyle” who also bought sugar from BSI and sold it to other companies in the United Kingdom.
    3. The workers paid this 35 million dollars by accepting a wage freeze which was in effect for 10 years.
    4. Unexpectedly the workers lost the ownership of BSI and American Sugar Refineries (ASR), a transnational company, managed to take over ownership by simply paying off the 65 million which the factory owed ING and First Caribbean international banks.
    5. Recently, Tate and Lyle were also bought over by American Sugar Refineries (ASR).
    6. The BSCFA and Principals of BSI have been trying to negotiate an agreement for over 2 years for the price of bagasse since the Company’s position is that the farmers did not invest in the Cogeneration plant and that the company owns the sugar cane once it is delivered at the factory.
    7. These are the facts surrounding ownership of the Sugar Cane:
    a. The Act (Law) that speaks about the agreements between BSCFA and BSI says that BSI can either accept sugar cane deliveries to the factory or purchase sugar cane.
    b. Cane Farmers have always delivered their sugar cane to the factory.
    c. The cane farmers pay 65% of the following costs AFTER they deliver their sugar cane at the factory:
    i. Grinding and other processes until raw sugar and molasses are extracted
    ii. Insurance for the product
    iii. Transportation to the port
    iv. Transportation to the buyer overseas
    v. And others
    8. The Company (BSI/ASR) pays only 35% of the above costs.
    9. Based on the above the profit from sugar sales and molasses are also split in the same manner; 65% for the Cane Farmers and 35% for the Company (BSI).
    10. The Act (Law) which deals with the relationship between BSI and BSCFA describes what the Cane Farmers actually get paid for as the “Net Strip Value of Sugar”.
    I. The meaning of Net is the following: Ultimate; final: the net result.
    II. The meaning of Strip is the following: To remove or take off.
    III. The meaning of Value is the following: the amount of money that something is worth; the price or cost of something.
    11. Based on the meaning of each of the words, used by law to determine what Cane Farmers are actually paid for by the Company, one can safely say that they get paid for sugar after everything else has been removed (stripped) from it and only sugar remains as the ultimate result.
    12. NTUCB decided to intervene for the following reasons:
    a. One of the main functions of trade Unions is to negotiate collectively for its members and due to this the Union easily identified two things which were wrong:
    i. One was that the BSCFA was negotiating under pressure simply because its members’ (cane farmers) main concern was not getting a fair deal in negotiations but rather for the date of the Harvest to be set (so that they could start earning money).
    ii. The other was that they were giving up the right of ownership of the sugar cane and getting close to nothing on the bagasse which is their property, since, as the law describes, they get paid for the net strip value of sugar and not for the Sugar Cane.
    b. That the members of the BSCFA had accepted and ratified a resolution which mandated their directors NOT to give up the right of ownership of the cane, which is one of the things in the proposals BSI wanted them to sign on to.
    c. That Belizeans are stakeholders in this industry as well.
    13. Recently the Prime Minister did a press briefing where technically he told the media that the Act upon which the cane farmers are taking the matter to court is not a valid Act in the Laws of Belize. If this was the case the BSCIB would not be insisting that the BSCFA needs to sign any agreement with BSI to open up the Harvest season. As a matter of fact if the entire Act was not valid BSCIB would not even exist nor have any role to play in the industry because it is this very same Act that clearly states that they (BSCIB) have the responsibility of setting up the date when the Harvest will begin, amongst other functions. That same section of the law also states that once the date is set the Factory cannot refuse to accept sugar cane deliveries from any farmer in the Association.
    14. Laws are set to protect the interest of everyone concerned. The law makers understood that it was critical that a harvest date be fixed simply because if this is not done the Cane Farmers would start taking on losses, as well as the factory. Therefore, in the best interest of both BSI and Cane Farmers the law mandates the BSCIB to fix the start date of the Harvest period (or periods) to protect the interest of both parties.
    15. It is also important to note within the law that governs the Sugar Cane Industry there is ABSOLUTELY NOTHING which forces the BSCFA to sign on to an agreement with BSI in order for the BSCIB to fix the start date of the harvest. As a matter of fact it clearly states that all the BSCIB has to do is consult with both parties before the date is set.
    16. Consult does not mean that they have to agree to a set date however they actually did and the date they both agreed upon was the 8th of December, 2014.
    17. Lucilo Tek hired Attorney at Law, Audrey Matura-Sheppard to apply for a Writ of Mandamus so that the court instructs the BSCIB to carry on with its responsibility of setting the date of the start of the Harvest.
    18. Belize Chamber of Commerce and Industry in their Press Release dated Thursday, November 20th , 2014 opens up by stating the following:
    “The Belize Chamber of Commerce and Industry (BCCI) notes with grave concern the current impasse in the Sugar Industry. This Industry is a major contributor to Belize’s economy and a significant source of foreign currency. Any loss to this Industry will therefore have a dire impact on all Belizeans.”

    19. If the above is true then ALL BELIZEANS ARE IN FACT STAKE HOLDERS IN THE SUGAR CANE INDUSTRY!

    20. In short what the Government and BSI/ASR want the Cane Farmers to do, by signing to the proposed agreement, is to GIVE UP THE OWNERSHIP OF OUR SUGAR CANE TO FOREIGNERS. If they do the cane farmers would not be able to negotiate for any other bi-products obtained from their sugar cane and would be stuck with whatever BSI pays them for Bagasse. This is would inevitably constitute a loss to this industry and by extension to the Belizean economy.

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