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Jul 20, 2017

B.S.I. Vs B.S.C.F.A. on Commercial Agreement

Will a twenty-two million dollar investment in the Tower Hill sugar mill proceed? American Sugar Refining/Belize Sugar Industries Limited and the Belize Sugar Cane Farmers Association are butting heads over some amendments to the current commercial agreement. B.S.I. wants to “amend the 2015 cane purchase agreement to remove the opt-out clause allowing either side to terminate the agreement after nineteenth January, 2018, to eliminate other uncertainties, and allow the contract to run for its full term until 2022.” But the B.S.C.F.A. is asking for a review of certain clauses including revenue from bagasse. On his visit to News Five last Tuesday, B.S.I./A.S.R.’s Mac Maclachlan detailed why this kind of turmoil is not good news for the industry.

 

Mac Maclachlan

Mac Maclachlan, Vice-President, International Relations, ASR/B.S.I. [File: July 11th, 2017]

“In order to go ahead with an investment of this magnitude, we really need to be able to secure the cane supply for that agreement for its duration, which would be through the next four years. BSCFA, just to be clear, have not said no to that; but they have put out some ideas, some counter-proposals, that maybe we should re-open the bagasse issue; maybe we should look again at some of the technical aspects of ownership of cane and a number of other things that, as you know, have been difficult for the industry in recent years and for two years in particular led to interruption of the crop. Frankly, we can’t afford to move into a period now where we are going to have further disruptions to the crop on issues that were settled as recently as two and a half years ago. I think it is everybody’s interest at this time that we move forward with a contract that works, that is in everyone’s interest. We are not suggesting changing in any way the revenue elements of the contract – we continue to pay the share of bagasse that we pay now; in fact we cemented that in the deal for the next four years; but what we don’t want to do is to end up with uncertainties coming toward us again as we start looking at making this investment.”

 

The B.S.C.F.A. issued a press release today giving its side of the story. It says it is consulting with its members and opened those consultations to B.S.I., who attended one meeting in San Lazaro. Despite a document shown to News Five, the B.S.C.F.A. says it is waiting on the result of its consultations to provide a counter-proposal. However, it reassured that it does not want to end the agreement, only to correct what it sees as a disadvantage for farmers.

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