Sugar Industry Negotiations On Bagasse Still Strained

 

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vlcsnap-2014-07-03-18h12m16s75Many believed that the tense atmosphere between the Belize Sugar Cane Farmers Association and the Belize Sugar Industry and American Sugar Refiners back in late 2013 was a sign that the sugar crisis of 2009 would be repeated.

However the fires were extinguished in good faith as an uneasy truce, based on a commitment to immediately start negotiations for bagasse, was made.  Negotiations were supposed to be concluded by the end of the crop season.

But with only days left in the season it does not look like that’s going to happen. BSCFA is asking for $10  and BSI is offering 51 cents. That is nowhere near middle ground.

In fact they are not even on the same page.

BSCFA’s proposal asks for a cut on the revenues generated from the bagasse being used as bio-fuel.

BSI’s proposal offers a cut on the fiber of the bagasse.  There is a big difference here because bagasse is 30% of the sugar while  fiber is only 15% of the cane affecting the formula for negotiations.  CEO of BSCFA Oscar Alonzo was on this morning’s Rise and Shine show and  made a detailed comparison of the two proposals.

vlcsnap-2014-07-03-20h19m56s145Oscar Alonzo- CEO of the Belize Sugar Cane Industry Association

“The percentage of the bagasse that goes for the mill and even the percentage for the fiber, in that case they are saying, you only need 42%.  They are saying they need 71% of the fiber.  Then, that has effect on the percentage that goes to cane farmers.  We are saying, our share should be 58%; they are saying, if you use the CS Electricity, it will be 29%.  We are saying, the bagasse has value; they are saying, bagasse has 0% value, which is out of the kindness of our heart, we are considering this fiber and then, they are able to pay you something.  We are basing it on the cost per kilowatt hour.  We are telling them, look: this information is available regionally.  It shouldn’t cost more than 12 cents to produce a kilowatt hour; they are saying that it is costing us about 29 cents per kilowatt hour, that they are losing money like that from BS.  We tell them, look: provide us with the detailed technical, market and financial information to let us verify that and they refuse to do that.  The proposal should be based on the price per kilowatt hour.  The market for this product is the local electricity market.  They say, no; basing it with the international market for sugar”. 

According to Alonzo, BSI and ASR’s approach typify old style capitalism.

Oscar Alonzo:  “Also, the technical and financial information, we have used what we ahve been able to gather from them up to 2010-2011.  Because we were forced to do that under an agreement with the government in 2010 when they were in financial trial and they were bailed out, and they agreed to providers.  But when ASR took over, they refused to give us any information”.

vlcsnap-2014-07-03-18h14m23s29Alfredo Ortega- President of BSCFA

vlcsnap-2014-07-03-18h12m30s212“We brought out that formula and they came out with their formula on which they said, ‘this is what we can do for you and this is what we want you to accept; take it or leave it.  But things don’t go along that way on any negotiation.  We have to be flexible, so that we can reach an amicable point that will give the benefit to both sides”.

Oscar Alonzo:  “This approach that they have is typical of a plantation economy as it is listed in the old style capitalism where they try to squeeze every single drop of blood and penny from the producers”.

BSI and ASR want to move into the other parts of the Commercial Bargaining Agreement.  However without any clear resolution on the negotiations for bagasse, BSCFA remains adamant on reaching an agreement on bagasse before anything else.  BSI says BSCFA are being unreasonable, but BSCFA says BSI needs to get serious.

 

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