ASR denies option for outside expert in Bagasse negotiations

vlcsnap-2014-08-01-09h22m36s208The Economy of the North of Belize is heavily dependent on the Sugar Industry.  Indeed, sugar remains one of the pillars in the Belize economy as it pertains to agro industry and the instability in the industry, caused by the disagreement over Bagasse, can have an adverse effect on Belize’s growth prospects. The factory, American Sugar Refineries, wishes to calculate Bagasse payments using fiber content and a formula which produces a 51 cents per ton payment to farmers. On the other hand, the Belize Sugar Cane Farmers Association, BSCFA, wishes to calculate using Bagasse itself and a formula which produces between a 6.00 to 10.00 dollar payment per ton to farmers. CEO of BSCFA, Mr Oscar Alonzo, claims that the ASR formula has major errors in it, having selling more electricity than it can actually produce.

vlcsnap-2014-08-01-10h56m57s253Oscar Alonzo – CEO of BSCFA

“Our proposal is based on the Bagasse.  We’re saying that 42% of the Bagasse is used for the operations of the mill, and 58% is used to generate electricity for sale to BEL.  The price that we would use to calculate the value would be the price per kilowatt hour, which at that time we figured [at] 25 cents.  The difference with BSI, they’re saying ‘No’.  It is the fiber that generates the energy, not the bagasse.  They’re saying that 71% of that fiber is what they require for the mill, and 29% is what is available to generate electricity for sale.  They price that based on the price of sugar cane, which in [their] example is $74.20. If we take BSI’s formula and try to apply it over the last four crops, from 2010 to 2013, of that [fiber] only 29% is available to generate electricity for sale.  So that even reduces the amount electricity that is available for sale to BEL. Now we know that the standard is that you get 130 kilowatt hours from each ton of cane.  When you apply that, the amount of kilowatt hours they can generate with that 50,175 tons of fiber is only 36 million kilowatt hours.  But then, what they sold to BEL in that year was 48 million.  But to sell 48 million you would require 66 thousand tons of fiber, not the 50 thousand as they are saying.  And then we apply that to each year, you notice they’re selling more than they produce.  So, there’s something wrong with their formula.  Our formula, we’re saying we’re basing it on  bagasse, and again we use the same figures for production.  Based on our formula, 58% of the bagasse is used to produce electricity for sale to BEL.  [In 2010 our estimate was] 72 million kilowatt hours for sale.  But [their] actual figure is 48 million.  What happened in these two years?  They said that they made 11 million dollars [in 2010], in [2011] it went up to 21 million dollars, because we had a surplus of bagasse, a mountain of bagasse that we has to get rid of, and therefore when you add these two you notice that it was 128 million kilowatts, and they sold 118.  So therefore you’re producing more than you’re selling.  So, that’s possible.  With our formula, it’s possible that you can sell this.  What we’re trying to show [is] that with our formula,  you’re able to produce more than you sell.  The question is now: How can ASR sell more electricity to BEL than it generates for sale to BEL?”

It seems that even the suggestion of hiring an international expert to study the problem and suggest a baseline figure has been rejected by ASR. PM Barrow in Wednesday’s press conference stated that, as recently as that morning, Government’s offer was denied. Even the BSCFA told PlusTV that the venture would not have been seen as an arbitration because they reserved the right to reject the expert’s submission.

vlcsnap-2014-07-31-07h39m24s78Prime Minister Dean Barrow

“ASI was saying that is an existential question to the industry.  They need to come together, to determine how we deal with that.  We need to come together to see how the factory will be expanded, to see how the families we could help to increase their production, to prepare Belize for what could be calamitous.  In that context they are saying the coming together of all stakeholders should start with an ability to work out the issues for payment of Bagasse. If they can’t even solve that problem, it doesn’t bode very well for the longer term existence of the industry. “

At the General meeting Called on 20th July, Sugar farmers approved additional moneys for extended negotiations but also gave their leaders an October deadline.

vlcsnap-2014-08-01-11h30m43s179Oscar Alonzo

“We have set a deadline for this process to be complete, October the 15th., that we have some figure in terms of payment for the bagasse.  We think [that deadline] is reasonable.  We’re not like BSI, they say they want to put an ultimatum, although some of our farmers were willing to put [it to]ultimatum. One of them said, ‘Look, by the 15th of August.’  But we have to look at it reasonably. The other issues; we making it clear to the control board, this is not an arbitration we have requested, because we don’t want it misinterpreted by it, Government and by other sectors and BSI.   Look, we’re at an impasse.  We are deadlocked.  The next step is to go according to what Sugar Law says, an arbitration.   No, we figure that this thing still can be settle outside of arbitration and process,”

PlusNews will continue to update you on any new developments in this ongoing industrial dispute.

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