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BSCFA and BSI at odds over Bagasse Print E-mail
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Friday, 01 November 2013 00:00

BSI forumThe Chief Executive Officer in Belize Sugar Industries Limited (BSIL) has announced that the factory will begin to receive sugar cane for million on November 25th.  Even as that announcement has been made the sugar industry is once again facing an impasse. The latest contention is being brought about by the Belize Sugar Cane Farmers Association (BSCFA) demanding payment for bagasse which they say is a bi-product of sugar cane production which has a commercial value. According to the BSCFA this is as a result of an agreement signed in 2002 between BSI and BSCFA in which payment is made to the cane farmers based on sugar and molasses content of cane delivered after quantities have been verified as well as the deduction of cost of marketing is done. The BSCFA argues that according to the same agreement whenever a bi-product of sugar cane delivered is identified as having economic value, both BSI and BSCFA would determine how the income will be distributed.


The Guardian understands that the farmers are looking at some additional $10 dollars more per ton of cane delivered. This is as a result of the use of bagasse by the Belize Cogeneration facility (BELCOGEN) as a form of fuel to produce electricity. BSIL had solely invested in BELCOGEN some U.S. $55 million in the construction of the plant. Before the construction of the plant bagasse was waste material for which BSI incurred an expense to manage. With BELCOGEN now in place it is used as a fuel which produces electricity that powers the mill and part of which is also sold to Belize Electricity Limited. Since the power company has been in operation in late 2009, there has only been one year since it has registered a profit at that was at a marginal 2.5 million dollars.

The BSCFA’s request of increasing in payment would result in the BSI having to pay between 10 and 11 million dollars more to cane farmers for sugar cane.

The entire situation has been one that has been under negotiations and it came to a head on Tuesday, October 29th, when representatives of the BSCFA walked out of a forum that is being held at BSIL which was organized to discuss the industry as it moves into 2017 when there is expected to be another cut in the EU quota of sugar. The discussions quickly went another direction however as the President of the BSCFA,  Alfredo Ortega, read a prepared statement in which he withdrew from the forum. In his comments he chided BSI and ASR stating that “ BSI and ASR have been frustrating this process by their delays in coming to the negotiating table and their outright rejection to negotiate the payment for bagasse. To Date BSI has not been able to confirm a date for the resumption of negotiations in response to our proposed date.” 

It is noteworthy that only the executives of the BSCFA walked out of the forum with GOB, BSIL and other cane farmer representatives staying to participate in the forum.
On Thursday it is expected that presentations will be made at the forum by major banking institutions which will make announcement to cane farmers that they are prepared to finance them at lower interest rates than what they have been offered in the past.