Last night, we showed you the comments from representatives of the Belize Sugar Cane Farmers Association and Belize Sugar Industries. They were discussing the impasse between them and why so many months have passed in the negotiation process, which has not resulted in the formal signing of a commercial agreement.
As we told you, that agreement is essential for the business relationship between ASR/BSI and the BSCFA. It governs matters like cane delivery, the cost of sugar production, and the earnings that ASR/BSI pays farmers to deliver their sugar cane to the factory.
But depending on who you ask, the other business partner is the intransigent one who is stalling these talks and forcing the time to run out before the next crop season starts in about two months.
You'll remember that the farmers of the BSCFA objected strongly to the Prime Minister's comments on Monday after the House Meeting. He was responding to a question from 7News about the severe difference of opinion between the two sides on one core issue.
The BSCFA has been pushing for months for the profit-sharing calculations to change. They say that the overhead expenses that BSI/ASR charges have been eating into their revenues and potential profits for years.
So, they've proposed a new profit-sharing mechanism, which they assert is fairer, but BSI/ASR insist that if they agree to this new profit-sharing formula, it will transfer 20 million dollars in value from them to the BSCFA, which will drive them out of business.
So, after hearing the PM's response on the evening news, the BSCFA leadership interpreted his answer to mean that he is accepting BSI/ASR's views on this significant point of dispute.
So, they wrote him a strongly worded letter yesterday, and our newsroom has obtained a copy.
The association says, quote, "...We are surprised that you are agreeing to BSI's position of not wanting to negotiate any proposal that involves a transfer of value. You will recall that in our presentation to you and members of the Northern Caucus... we clearly indicated that our proposal did not involve a transfer of value but rather a rectification of a unilateral appropriation of value which BSI was undertaking over the....We recall your agreeing to our justification of our proposal, hence our consternation on hearing you publicly agreeing with BSI's interpretation of our proposal." End quote.
And the BSCFA then not so subtly reminds the PM that their membership represents a powerful block of voters and actors in the north.
They say quote, "We hope that your statements are not a confirmation of your abandonment of the cane farmers and the poor, and an outright embrace of the rich and powerful multinationals. These injustices and betrayals will only prompt the cane farmers and the poor to seek alternative solutions to their predicament. We hope that such pronouncements do not lead to increasing social unrest and instability." End quote.
The Association's Profit Share proposal featured very prominently in their interview with the press yesterday, and here's the BSCFA's Andy Westby and Fred Ortega had to say on the topic:
Alfredo Ortega - Chairman, BSCFA Orange Walk Division
"It's not a transfer of value, as BSI is pointing out, but it's more a reflection of what they are charging us as services; we need to have those things be charges that are the true value of what service they are giving us. We don't know. We are not with them whenever they come to a point of what they are charging us because it is something that they brought forward, and they put the charges upon it. When we talk about the throughput and the terminal charge that they have put, they didn't come with that number for us. And we told them that we need these things to have numbers so that we can know what they are charging us. In regards to all these payments and the division that is being mentioned, whenever you listen to the sixty-five thirty-five, you might say, why is it that the farmers are asking if they are getting Thirty-five percent of the pie? But it's not thirty-five percent of the true costs. It's thirty-five whenever they have already removed the overhead expense of everything. And then we come, and we have that split of sixty-five to thirty-five, and that is why we are brought to the table that we need this negotiation to go on so that we can have clearly that what is being charged to the farmers, the expenses that are being charged are a true reflection of what it's supposed to be. And that is why I think that many times, this has been mentioned because it's the third time that the Prime Minister had mentioned in regards to the transfer of value of twenty million because that is what BSI brought up."
Andy Westby - Chairman, BSCFA Council of Management
"I think if we would go under the line of expenses, what we, as BSCFA, from day one, have put forward [is] that all those expenses that we don't participate in the process, and it's not disclosed to us, should reflect the true cost. And I will give an example of that manufacturing allowance. We have investigated strongly in Brazil, all about. And the cost to change one sugar to another kind of sugar is around 8 to $10 US. Right now, they are charging 160 for direct consumption and 150 for local. So, if these costs should reflect the true costs, and should be allocated under what we call the processing, then that is why they are claiming that there is going to be a transfer. Once you reflect on the true cost, that money that they are talking about will find its place where it should be allocated. All this money was on this side of the farmers, but innocently - I could put it that way - it went there year by year - signed over their side."
Alfredo Ortega
"One of the things that have made us change into this because we have seen for the past years since ASR took over BSI is that they have managed to come almost every year, in a different tune, putting different services. And each service that they apply is a cost. Each service that they brought forward is a cost. And then what happened? Whenever they put this cost, it comes as an overhead cost. When they remove that, the balance that remains is what we divide 65 to 35 with them."
We have one correction to make about Alfred Ortega's comments from yesterday. You heard him say that in the current profit-sharing mechanism, farmers get 35%, which implies that BSI/ASR receives 65%. Well, we contacted him this afternoon, and he agreed that he had made an error. The Farmers actually get 65%, while the millers get 35% of the revenues.
If and when the Prime Minister responds to their letter, we'll tell you what he says, but, history suggests, the PM - like his predecessors - will have to cave to the demands of the BSCFA.
