Tail wags the Dog: Government intervenes in Citrus Industry Power Struggle Print E-mail
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Written by Shane D. Williams   
Thursday, 01 November 2012 00:00

Anthony Chanona, Denzil Jenkins and Eccleston Irving“I begged the growers, 'Do not say yes to that agreement. If we do that we will be dead’."- Denzil Jenkins, Citrus Growers Association’s (CGA) appointed Director on the Board of Citrus Products of Belize Limited (CPBL).

The CGA is like an impregnated victim of rape that can never forget the horrible ordeal because they need to maintain and develop a child whose prosperous future is of extreme importance. Citrus growers were scared into entering a relationship with Banks Holdings of Barbados Limited. They were told that the CPBL was in dire straits and without a strategic investor, the entire citrus industry would collapse. Leaders of the Association led the farmers into bed with Banks. Banks proposed an investment agreement that would expand the company and transform it into a first class enterprise. By all accounts, Banks has done exactly that. The question, however, is to the benefit of whom. Eccleston Irving, Chairman of the CGA, and other members are saying “certainly not to the benefit of farmers”. Though they only own 47% of the company, Banks make 100% of the decisions and the CGA, who owns 51% of the company, has no decision-making authority. That is because in the Investment Agreement between CGA and Banks, there was one line which stated that all decisions made by the Board of CPBL must be approved by the two directors appointed by Banks. Signing that agreement meant the CGA signed over control of the company to Banks. Since the agreement was signed, the company has consistently made decisions against the will of the CGA. Those decisions have resulted in multiple demonstrations in the last few years. The most recent decision being challenged by CGA was declaration of open season and the unilateral establishment of prices by CPBL.  

On Tuesday, October 30th, leaders of the citrus industry and other community activists took turns to address a little less than 300 farmers on the state of the citrus industry. In 2 hours and 20 minutes, speakers repeated the same message. Everyone encouraged the farmers to let their dissatisfaction with the unilateral decisions of Banks be heard loud and clear. They were told not to continue allowing “the tail to wag the dog”. They were told that sometimes one needs to “break an injured leg in order to fix it”. Hector Silva, former PUP member of Cabinet, echoed the late Hon. Phillip S.W. Goldson’s philosophy in context of the citrus crisis: “The time to fight for your company is before you lose it.” Melvin Hulse, former UDP member of Cabinet, said, “Every major change that has happened in Belize is because the people took to the streets." However, the CGA had pounded the pavement before but they only realized temporary improvements. Hulse said that is because the focus has been on personalities and not the underlying issues.

Hulse said to the farmers, “Our problem is now finding out how to take the power from the minority and return it to the majority.” The relationship with Banks and CGA is beyond repair because there was never a relationship between the two in the first place. Banks’ relation with CGA was limited to its relation with Dr. Henry Canton and other former leaders of the Association, who prospered as a result of the arrangements. Anthony Chanona is one who was lobbying for support of the investment agreement but has realized they went to bed with the devil. Chanona said, “I used all the influence I have to argue that the growers accept this investment agreement based on some recommendations that were made. These recommendations were never adhered to and today we have a controversy, full blown.” He now is leading the charge against Banks because “the company is not operating in the interest of growers”. Chanona blames Canton for leading them astray: “I trusted in the vision of the CEO of CPBL but I would now say the procedure we used was flawed.” The focus of the Association has now gone beyond price control and issuance of dividends and is now in the initial stages of regaining control of the company they “own”.

Jenkins said, "In the investment agreement there are provisions for us to re-buy our shares if there are disputes in the company that cannot be resolved." The Association has expressed interest in purchasing the shares owned by Banks and according to Irving, the Association has no difficulty in finding sources of funding. However, according to Jenkins, “CPBL is rejecting due process.” They refuse to allow agents of CGA to enter and inspect the company for valuation purposes. Reluctant for the association to enter into another shady deal, Jenkins asked, “How can we buy something if we do not know how much it is worth?”

CGA is not the only group interested in buying Bank’s shares. Jenkins said, “They are allowing other interested parties to inspect the company.” Jenkins did not name the other interested investors but did say to association members that “CGA representatives were not operating in the interest of growers. We got rid of them. They went to form an alliance with people who are working against you as we speak. They want to dismantle the CGA, take away shares and share it among themselves. That will not happen." The CGA representatives that Jenkins was referring to are Henry Canton, Mike Duncker and Ernest Raymond. They have reportedly joined other large-scale farmers as part of the Belize Citrus Mutual.

This week the Belize Citrus Mutual released a statement questioning the motives of CGA executives. The release states, “Regrettably, the CGA has been going as far as to encouraging demonstrations and inciting farmers to close the factory by stop delivering fruit.  Such a call by the CGA is a completely ludicrous proposition since citrus farmers have tens of thousands of boxes of ripe grapefruit, ready for harvesting, delivery and processing.  It makes us wonder whether the CGA’s Committee of Management really has the best interests of the citrus industry at heart or does it merely act out of bitterness?” The release goes on to say that the CGA’s very own Committee of Management is “illegal” since it has “failed to hold an AGM and elect a new Committee for close to three years… It is clear that they have long lost their mandate gained from the AGM that elected them.”

Accusations are being flung from all corners of the Stann Creek Valley. All interested parties are calling on Government to solve the problem. However, the CGA has requested that the CEO in the Ministry of Agriculture, Jose Alpuche, be removed from his post as they point to an email sent by Alan Slusher to Alpuche in February of this year involving discussions about the “dissolution” of the CGA. It is not a position of the Government of Belize as the Prime Minister has repeatedly expressed his support of the CGA.

In an effort to restore order in the industry, the Deputy Prime Minister of Belize and Minister of Agriculture, Hon. Gaspar Vega, has met with representatives of all interested parties. Those meetings resulted in several agreements between industry stakeholders. The Government will seek to hold all to their word in agreeing to undertake continuous dialogue in a spirit of compromise to move the industry forward. These initial discussions would cover operation and regulation of the industry and not the controversy surrounding the processing company, CPBL. Processing of grapefruit at the factory would continue because some growers were already experiencing fruit drop as the grapefruit were already mature. The Ministry of Natural Resources and Agriculture also stated, “The unilateral factory opening should not occur again and all parties should be properly consulted. The factories have opened before with fruit price being provisionally accepted and final price negotiated thereafter.” Government will oversee a process in which a first price submission for grapefruit was to be received by all parties on Monday, October 29th. CPBL was also to present a first price submission for oranges to growers on Wednesday, October 31st. Negotiations for acceptance will occur at 10 a.m. on Monday, November 5th, with the CGA and at 1 p.m. with the BCM. The Ministry also addressed what the BCM refers to as “provisions of the archaic Citrus Act” saying, “Certain fundamental provisions of the Citrus Act were found by the Supreme Court to be in violation of the Belize Constitution and all parties agreed to undertake an urgent revision of the Act preceded by development of a long term vision for the industry.”

In a meeting with Minister Vega on Wednesday, October 31st, the CGA expressed its intention to buy over Banks Holdings shares in CPBL, a move that Government expressed willingness to support. In addition, the CGA agreed that there needs to be a toning down of the rhetoric. All industry stakeholders are expected to meet within a month to advance the dialogue on a long term vision for the industry.