7 News Belize

BSI-ASR Makes Bold Bid To Bypass BSCFA
posted (November 10, 2014)
For over a year now - ASR - BSI and the Belize Sugar Cane Farmers Association have been negotiating to agree on a price for bagasse. But today, BSI effectively leapfrogged that drawn out process and did something thoroughly unprecedented: it bypassed the BSCFA completely and made an appeal directly to the farmers to sign independent 7 year contracts with BSI.

That daring maneuver tonight has set the sugar industry reeling - because on the one side BSI is urging them to abandon their association and deal directly with the factory so that the season can start promptly - and on the other side, the association is urging them to hold firm - and wait for the negotiation process to end - so that they can get an optimal compensation for bagasse.

The factory owners said they're doing this because negotiations have stalled: they last met a month ago with the farmers association - and say it is not dealing with the matter urgently - even when the start of the season is only a month away. So today, they made history - in a press conference at BSI headquarters at the Tower Hill Factory in Orange Walk:..

Belizario Carballo - Chief Financial Officer - BSI
"Over one month has now passed and we have not heard from the BSCFA on this matter which is now critical, critically urgent, given that we are less than a month from the expected start of the 2014/15 crop. Additionally, statements made by BSCFA representatives in public media subsequent to our last meeting lead us to believe that the BSCFA has no intention to conclude a new agreement for the sale and purchase of sugarcane before the start of the 2014/15 crop. We do not foresee any prospect in the near future or being able to secure an agreement with the BSCFA on behalf of all sugarcane farmers. BSI will now move ahead with alternative options to secure agreement for the supply of sugarcane to BSI effective 2014/15 crop with those farmers and associations that desire to start the crop on time. We have now taken a decision in light of these circumstances to move ahead to coordinate the crop with those farmers and group of farmers who wish to deliver their cane. BSI will now pursue separate but similar agreements but to the draft agreement last discuss with the BSCFA on 9th October 2014. With other associations of cane farmers, group of farmers and if necessary individual cane farmers who wish to deliver their cane. The agreement is fundamentality the same as has existed in the past. The new element of the agreement is the inclusion of a provision to pay for bagasse which BSI had committed to as part of negotiating a new agreement."

Mac McLachlan, International Relations Advisor - ASR
"We try very hard to come to an agreement in order to move the crop forward, but we are here as the statement said less than a month away from the opening of the crop and its essential at this time that we start to coordinate that crop because we cannot afford to have another late start."

So now BSI - ASR is appealing directly to the 5,500 farmers, through their 370 reaping groups and 18 branch associations. It is a very high stakes gamble for BSI-ASR - but strategically a worthwhile one if they can break the association's stranglehold on the farmers while also starting the season on time - which did not appear likely the way things were going.

Of course - they won't even discuss the deeper game - right now they're just in a hurry to sign up as many farmers as they can - all, if possible:

Mac McLachlan, International Relations Advisor - ASR
"What we need to do; we need to know how many farmers would wish to sign an agreement and to deliver their cane and we need to know how much cane they plan to deliver and we need to know that in good anticipation of the crop in order to plan for the arrival of that cane and that it will be treated properly. The timing we are looking at is the 28th November, by which they would have let us know if they wish to sign up and deliver cane. At that point we would have to take a decision whether there are sufficient cane registered as it were to come so that we can put in place plans for a successful crop. This is very much in the hands of cane farmers and themselves, they will have to ask themselves the question whether they wish to settle and deliver the cane. From our perspective we believe that there is a huge amount of interest in doing that, but we will see."

Jules Vasquez
"Even if you are widely successful that you wouldn't get 100% uptake unless there is some sort of breakthrough. You will inevitably have people who have to resist for maybe familiar reasons or other things."

Mac McLachlan, International Relations Advisor - ASR
"I don't believe that it is a full-ground conclusion that we wouldn't get all the cane in. Certainly we will be disappointed if we didn't and it would be our ambition to actually achieve that."

So they're hoping for 100% uptake - and we're sure the Belize Sugar Cane Farmers Association will have something to say about that - but today they were in emergency meetings - and up to newstime unavailable for comment.

BSI-ASR informed them in writing of the position today - and we gather it caught the association off guard. But for BSI-ASR, it has been steadily building towards this, meeting with farmers, meeting with reaping groups, and large farmers for months. Within the next 17 days, we'll know if that consensus building paid off.

But, what are the deeper implications for the Cane Farmers Association or any other association? First off, the Wilfredo Magana challenge in 2010 established that membership in the Belize Sugar Cane Famers Association is not mandatory; the constitutional guarantee of freedom of association established that farmers do not have to be members.

But, what about the principle of it? The idea that a multinational can simply bypass a farmers association because it doesn't like their pace. We asked that today:..

Jules Vasquez
"How do you answer the criticism that you all are trying to break the back of the Belize Sugarcane Famers Association, that it is association busting as it might be called?"

Mac McLachlan
"I think all we are doing by offering to settle independently with cane farmers is just giving them... it our perception that talking with a lot of different cane farmers in the field as we have been, that many of them want to have that choice."

Michael Young, attorney
"We reach the point where the BSCFA has it position, BSI has it position and they could not meet between the two. Are we going to allow that to stop the commencement of the crop? No."

Jules Vasquez
"How would you respond for a characterization which said that it's just a ruthless, capitalist maneuver by ASR divide and rule, eliminate the farmers' association and basically forced the farmers into an agreement which may not be completely optimal for them but its suits us just fine and we're not going any further because we don't even want to pay for the bi-product, how do you respond to that characterization?"

Mac McLachlan
"I think Jules you have to remember that we have been trying to negotiate this for a long period of time now and that you can see that there can be towing and frowning in certain political tight negotiations over bagasse or whatever, but we are now about to hit a very critical point and that is the time table for the crop and I think personally that overrides other considerations. I believe that what we are doing is providing the opportunity for cane farmers to speak with their feet and to tell us what they think about the future."

And the future starts tomorrow: ASR is calling Orange Walk farmers to a meeting at 8:30 am to see and, if possible, sign the contracts. BSI - we are told has responded to the BSI letter sent to them this morning, and will be having a press conference as well. We'll have full coverage in tomorrow night's newscast.

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