BSI On Proposed 60/40 Formula: “That Makes No Logical Sense”

We continue our coverage of the ongoing impasse between the Belize Sugar Industries and the Belize Sugar Cane Farmers Association, with more from Mac MacLachlan, the Vice President of International Relations at A.S.R./B.S.I. In an interview with reporters on Thursday, MacLachlan explained in great detail why the most contentious aspect of the ongoing negotiations towards a commercial agreement is the formula for the payment of sugar cane. According to the miller, B.S.C.F.A.’s proposal on this issue equates to sugarcane farmers reaping the profits of added value direct consumption sugar without making any contributions to the production process. This says McLachlan amount to farmers seeking to exploit the mill.

Mac MacLachlan, V.P. International Relations, ASR/BSI

Mac MacLachlan

“If we looked at 60/40 on gross revenue so that means farmers not contributing to any of the ex-mill costs; that are the freighting, the handling charges, and the manufacturing allowance to make direct consumption sugars. All of the calculations that go in to make it a net strip value that’s what it means. It’s the value of the sugar once you’ve taken out the costs associated with exporting that sugar and producing higher-value sugars, direct consumption sugars. If you do away with all those charges, that’s where the figure comes from that it would mean that the mill would be subsidizing the farmers by twenty million dollars a year. Now, I’ve explained already how impractical and impossible that would be because the mill has just completed five years of consecutive losses. So, no business in their right mind would turn around and say, take this money, and we’ll go bankrupt. I don’t that’s in the farmers’ interest, and I don’t think it’s – certainly not in the mill’s interests. I don’t think it is in the country of Belize’s interest. We have just over the last crop put forty million dollars into the economy of the north through the improvement of these cane prices. That’s very important, not just for cane farmers. It’s important for the entire economy of the north. If we didn’t have a sugar industry here, well, it would be a lot more difficult for people, I think. So, what we have said is yes, if you want to go to the sixty-forty, that’s fine. But we will pay you on the basis of the published world sugar price because it stands to reason. How would be paying 60% of the benefit for direct consumption of sugar to the BSCFA if they are not contributing to its additional cost of production? That makes no logical sense. It’s completely irrational and, in my view, simply a way of trying to exploit the mill.”