Tonight, there are concerns coming from cane farmers in the north following a letter from Tate and Lyle, the British company a major purchaser of Belizean sugar. According to the letter, in the next sugar crop, they stand to lose 83% of their revenue from that overseas sale.
Tate and Lyle wrote to the Cane Farmers Association two days ago informing them that starting with next year's crop, the company will only buy ten thousand tonnes of their sugar under the Fair Trade Agreement - usually they buy fifty to sixty thousand tonnes.
The reason put forward is that market forecasts for the sale of sugar are down, and that there is not the same type of demand as there was in the past. For the farmers it means that they stand to lose $5.7 million dollars. So, the association held an afternoon meeting with all of the 18 branch chairmen to inform them, and to seek their input on a course of action.
The Vice-Chairman of the Committee of Management of the cane farmers association explained to the awaiting media what this loss will mean for the cane farmers:
Alfredo Ortega - Vice-Chair, COM, BSCFA
"The letter we received from the very beginning is that they will be buying from us not less than 50,000 tons of sugar and at that time, as you know Belize was the first country that was certified for sugar or sugarcane and we were used as the pilot projects in the first year. For the first 2 years we manage to sell more than 70,000 tons - what we produced was sold and then they certified other countries like Fiji on which a reduction of sugar under fair trade umbrella from Belize came. But we were not less than 50,000 tons of sugar sold to them. Last year we received an additional letter that they will be buying 10,000 tons more, which took it to 60,000 tons and we have some visitors from the US that they compromise themselves to buy 5,000 tons of sugar. So that brought it up to 65,000 tons for this crop that just ended. This 10,000 really came to a surprise to us so immediately."
"It's a huge loss. Last year we got 6.9 million Belize dollars and it was only 60,000 tons that was sold. This year what have proposed to buy from us was 65,000 tons; 60,000 tons to the EU and 5,000 tons to the US, so that is what we will be getting this year. But for this upcoming crop the 2014/15 crop is where they are saying that they will only be buying as a minimum 10,000 tons, so it's a very huge reduction from 6.9 million to almost 1.2 million, the difference is very huge and it will definitely create problems within the organization."
"We were receiving in the vicinity of 6 million Belize on which that at least gives us an opportunity to cover and also to comply with the standards of flow. That money, a good portion of it is being use for us to comply with the flow standards because as you know they have some heavy standards that we have to comply with; the use of agrochemicals, environment, child labor and administration - many things that they have that we have to comply with and many of these funds is being use for us in compliance of these different programs and also these funds are used in granting help to the farmers in regards to agrochemicals and other programs that they put on board. Also we have social programs in which we have been helping the education sector, infrastructure and healthcare, medicines and so on. With this reduction it means that many of those programs that we were contemplating before, we won't be able to do so and that means that many of our staff at this point we will have to come to cut in regards to staff because of this situation."
It's tricky because Tate and Lyle is owned by American Sugar Refineries, which is the same company that owns BSI - and BSI is locked in a dispute with the cane farmers about a price for bagasse.
The suspicion is that this is some ploy to pressure the farmers into accepting the bagasse payment that BSI has proposed. As you may know, the farmers have firmly rejected that offer. The negotiations into the bagasse issue remains stalled, and so is the negotiation for the commercial agreement for next year's crop. This afternoon, we tried to get BSI, Chief Finance Officer, Belizario Carballo, for comment, but his secretary told us that he has been in meetings with visitors to the mill all day, and that he will be unavailable.
We'll keep trying for tomorrow's newscast.
Getting back to that letter, Tate and Lyle also informs the farmers that their payment schedule for their sugar will change. Instead of being pre-paid based on an estimation, the farmers be paid only after Tate and Lyle has sold all the sugar to their customers in the European Union.
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