| Another Lost Opportunity |
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| Written by Jamil Matar |
| Thursday, 25 June 2009 12:15 |
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It’s been a while now since I last updated readers on the activities within the Sugar Industry, and since we have been hearing over several media outlets all sorts of legal and other wrangling between groups of farmers in the Industry, I thought it would be an opportune time to write a few lines on the subject. Recall that my primary interest in all this is that I am an elected employee representative on BSI’s Board of Directors and as such I have an obligation to my fellow employees and a responsibility as a Director to keep abreast of the events which affect my employer and ultimately our continued viability as an Industry. Allow me to share with you the final figures pertaining to this year’s sugar production. The sugarcane crop came to a close on June 5, with the mill having processed 917,727 tons of cane (2008- 980,114 tons) from which 92,408 tons of sugar (2008- 78,305 tons) was recovered. While this shows a marked improvement in cane quality (which was primarily a function of the favorable whether condition), it is obvious that cane supply is deteriorating at an alarming rate. To emphasize this point, only two years ago, in 2007, over 1,200,000 tons of cane was delivered to the factory at Tower Hill. Notice how significantly cane supply has fallen? Almost 300,000 tons! To merely say that BSI is concerned about this trend would be an understatement. The company has openly expressed its disquiet with this development and has informed employees that it must explore ways to enhance cane production. The path ahead for the Industry, then, demands urgent action to address this very serious concern and explore all avenues to ensure sufficient cane availability, or the industry will certainly fail. As my topic suggests, we have lost another golden opportunity to ensure industry survival. This was the final year to take advantage of the attractive prices that currently exist in the EU market. Yet again for the third consecutive year production has fallen below the 100,000 ton mark, and well below the target of 120,000 tons of sugar. On October 1 of this year, the final phase of the 36% price cut will be implemented on all sugar exported by Belize into the European Union and our Industry will have to grapple with stern adjustments to continue to exist. So while some stakeholders in the industry are mostly focused on the Fairtrade monies, the rest of us are concerned with keeping the gates to the factory open. This brings us to the Fairtrade premiums. As you all know, in 2008 Fairtrade authorized Tate and Lyle to use its label on BSI’s sugar sold in the EU. In return, Tate & Lyle paid a premium of US$60 per ton of sugar to be used effectively for the benefit of key Industry stakeholders. There are two major stakeholders with legitimate interest with respect to the Fairtrade premium: the cane farmers and the mill. The first year of disbursements, 2008, $7.6 million was given in totality to Belize Sugar Cane Farmers Association (BSCFA), and suggestions were offered for the use of the premium based on knowledge of the needs of farmers in the face of the impending price cuts. But the 2008 crop turned out to be one of the worst in the Industry’s history in terms of quality and sugar production. It is not known how the entire $ 7.6 million was spent by the BSCFA. What is known is that some of this money was allocated to short-lived projects such as a sub-access road program, establishment of branch offices and administrative support. These have not yielded any material benefit to the industry. It is also understood that as a consequence of unfavourable audit results, Fairtrade certification has been suspended. This is regrettable as BSI believes that certification remains of great potential benefit in assisting the financing of essential reform of the cane growing sector. During this same first year of the premium, a quality initiative in the form of a Quality Improvement Program (QIP) was drafted by Tate and Lyle and Fairtrade which would change the focus of the use of the premium to ensure that these are spent on investments to improve industry efficiency and product quality. The concept was discussed separately by Fair Trade and Tate & Lyle with the BSCFA and BSI, and a framework was constructed which allocated 65% to production and 35% to social expenditure and administration. BSI, albeit with some reservations, was supportive of the QIP and agreed to be a participant on the QIP committee. That is, until last week when both the Beneficiaries of BEH and BSI’s Board of Directors decided that the Company withdraw its participation from the QIP Committee. There were several reasons for this decision, and information bulletins were issued to all employees explaining this. I will expand further on those reasons in a future article. One of the spurious allegations that continue to be propagated by some leaders in the BSCFA is the accusation that there is this massive conspiracy between BSI and Tate and Lyle to eliminate the small cane farmer. This charge is now being trumped whenever some of the more vocal elements need a cause to champion or a victim to beat up on. First, it was the core sampler that would weed out small farmers. Lately, according to the CEO of the BSCFA, it’s the United Cane Farmers Association’s challenge to the constitutionality of the BSCFA as established under the Sugar Industry Act of 2001. The CEO suggested on radio that if the UCFA is successful in its application, then BSI will deliberately choose only to accept cane deliveries from large farmers. That is a most absurd charge, and as a Director let me set the record straight: BSI is interested in processing all the cane in the fields, and is indifferent as to whether these are delivered by large or small farmers. To put it as clearly as I can, it is of no interest to BSI whom the sugarcane which is brought to the factory belongs to. My employer’s position has always been consistent and without prejudice: the mill wants good quality cane and it wants lots of it, much more than is being harvested now. With those final words, and lest I have given the impression of ill will towards any of the stakeholders, I personally state that I really would like to see all of the outstanding issues facing the industry settled before the start of the 2010 crop. It must be known that the employees I represent have a single position in this matter to see the Industry not only survive, but prosper. In addition, my employer is very cognizant of the role it plays in the Industry and will never do anything to put its existence in jeopardy. |