On Monday, we showed you what Prime Minister John Briceno and the BSI's Director of Finance had to say on the latest in the impasse between the millers and the Belize Sugar Cane Farmers Association.
As we've been reporting, time is running out for these business partners to sign a commercial agreement in time for the start of the next crop season, which is about two months away.
The two sides have conceded that they are nowhere closer to resolving their core differences, so they have agreed to appoint an outside mediator. But even on that issue, they can't seem to agree.
Today, the leadership of the BSCFA called a press conference to clarify the comments that the PM made to the press on Monday after the House Meeting. Here are their main grievances and the counterpoints that BSI's Director of Finance made to us this afternoon:
Andy Westby, Chairman, BSCFA Council of Management
"The BSCFA was the first one to bring up that of a mediator so that we can have an agreement to meet the day before the commencement of the next crop. From November of last year, we mentioned it to the PM and we proposed it to BSI so that the negotiation will go peacefully and in good faith to not have any stalemate to that we can have an agreement and finalize before the next crop so I want to state that clear that it was the BSCFA that brought up and put forward to BSI about this mediator."
Shawn Chavarria, Director Finance, BSI/ASR
"The whole negotiation had to go through its process and through that process is both sides ventilate what are their issues, what are their points and justifications and why they are proposing the terms that they are proposing. In our view, that had not occurred, if you look at the time span between for example January to August, we only met twice with the BSCFA. That for us was insufficient time to narrow the core points, we only did that when we met again in September, we had two meetings in September. We were able to get through some of the minor points and then we were left with what were the core issues and so I think before we even had engaged a mediator, both sides had to know where they stand in terms of what are the core points that are pending in order for both parties to agree on. Certainly, we know that we were following up and trying to press for meetings and you know at this point we don't really want to be pointing fingers. We are where we are and we are prepared to invite an independent mediator to come and see if they can help the parties narrow the gap to see if they can reach an agreement. So, there is no point looking back what has happened over the past 9 months, we have two more months until the next crop begins and we need to focus on that."
We also had to revisit the extreme differences of opinion between the two sides about the counter-proposals that the BSCFA has made to BSI on how to amend the commercial agreement to be more equitable. The company says they have run the numbers and the scenario the farmers have presented would mean that the company will have to transfer 20 million dollars in value from the millers to the farmers. The BSCFA still strongly disagrees, and here are the comments from the two sides on that thorny subject:
Andy Westby, Chairman, BSCFA Council of Management
"We are a bit at disappointment when the PM mentioned that no company will transfer $20 million as us as cane farmers. I want to clarify that point that it's not a matter of transfer, it is a matter of reflecting the true cost that is being charged on overhead expense when we as farmers are spending 65% or our money on those costs and those numbers are not disclosed to us in details in their audit report. So, we as thee BSCFA, if these costs will reflect the true cost and to be set where these costs should be located under their 35% then there will be a just payment for both sides and this is where this cost will find its place that the Government is claiming. So, it seems that PM doesn't have the point clearly as yet and we have been explaining over and over in detail to the PM what entails that transfer that the BSI is claiming. So, we as farmers, if that does not regulate, we are going to go out of business. So, we are going to make it clear to the nation that we will not stand down until the real cost is reflected and be allocated where they should be allocated."
Shawn Chavarria, Director Finance, BSI/ASR
"What they are proposing is the result of that will be BSI has $20 million less in its pockets and that will result in us going out of business. We have demonstrated the numbers behind that. We have said look, your proposal when you go with the gross value, we get 40, we have to meet all these costs of getting the product to the customer. We have to produce the value added sugar and if we take that into account and how they propose the formula, we stay with $20 million less and for us that's not viable. That's really the long and short of it, no business can survive in such a circumstance and we have said to the BCSFA that we are willing to look at a simplified formula for gross value, it has to be that no side is not disadvantaging one side over the other."
Reporter
"What the farmers are insisting is unbearably high production cost that the value they've been getting over the years, it hasn't been the kind of returns that they need to continue to remain viable."
Shawn Chavarria, Director Finance, BSI/ASR
"I think it is a fair statement for everyone really doing business in this sort of climate. There are a lot of geopolitical issues that are happening across the world, we are being affected by it. We consume fuel, we are transporting sugar and molasses all the way to Big Creek now. So, all these fuel prices are hitting us. We also have steel prices going up to repair our factory, plastics used for packaging materials are going up so we are feeling the same issues as well as everyone else who is doing business in Belize and the world. So, really, both sides can make a similar argument that the cost of production is going up. In our case, we are not proposing to take anything away from the farms. We are proposing to keep everything the same, they've rejected that so we've looked at their proposal to find a way to make it work, we have presented that, they have rejected that as well and that why we're now at the point where we say 'look lets invite a mediator to see if we can help bridge the gap'."
