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All this week we've been reporting on the approximately 100 thousand tonnes of Standover cane left in the field after a sugar cane crop that started late and was dogged by bad weather.
For the farmers who are stuck with the cane it means a loss, but should ASR/BSI be forced to pay for at least a percentage of the value of the cane? After all, they are the ones who contracted to buy it! We challenged Shawn BSI's Director of Finance on that:
Jules Vasquez:
"The stand over cane should be a take or pay arrangement. You are the mill. You have contracted with the producers, with the farmers to take their cane. Since you are exclusively receiving their cane, shouldn't you take the stand over kin? Pay for the stand over again? Or a percentage at least?"
Shawn Chavarria, Director of Finance, ASR/BSI
"We had a roughly about a month delay at the start of the crop due to issues with Gazetting and approving the start date of the crop, and then the road blockages that if it's 100,000 tonnes of cane, we could have possibly milled that in two weeks time. So if you look at the delay that we had, if we did not have those delays, it could well have been that we would have milled all the cane in this year. So from our perspective, we don't feel we bear any responsibility for any standing cane because we were ready to start the crop. It's a situation where I think farmers are having difficulty getting to the fields and delivering their cane. And then those higher mud levels were then causing issues for the mill."
Jules Vasquez:
"But should you not in solidarity with your partners, the farmers offer, settlement or a payment for a partial value of that cane? Do you agree with the principle?"
Shawn Chavarria, Director of Finance, ASR/BSI
"I don't think we would necessarily agree with the principle there. just because, again, the nature of our business is one that we similarly would take a loss because while we only farm 10% of the cane, we also left cane standing in the field. So our operations, we left about 10,000 tonnes of cane in the field. So we took a loss on that too."
