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BSI Compromises, Cane Farmers Say They Don’t See It
posted (December 22, 2014)
Tonight the standoff in the sugar industry continues - and it's clear there will be no crop before Christmas. There were rumors today that there would be a movement to protest against the cane farmers chairman Ezequiel Cansino - but when we passed the cane farmers association office - everyone was just waiting on their fair trade cheque.

More on that later, but The news tonight though is that BSI has budged, and removed what the offending clause 2.3 in the draft of the final agreement. That's the one that deals with a new creature proposed by the BSI called the Harvesting and Delivery Control Unit. The farmers say that BSI is proposing it to take the place of the Sugar Cane Production Committee - which is an independent government-appointed body. This is the body that determines which cane will be accepted and which rejected.

Well, over the weekend BSI says in the spirit of compromise, it removed the reference to the Harvesting and Delivery Control Unit in clause 2.3. Financial Director, Belizario Carballo explained:

Belizario Carballo - CFO, BSI
"Despite our position on the matter, we reviewed it over the weekend and over the weekend we resent the association a revised draft which removes that section from that sentence from that clause 2.3. And so now that clause 2.3 essentially simply says that prior to cane being received, the cane will be examine and it may be rejected on the basis of criteria and processes that are developed and agreed by the parties and in consultation with the SCPC. So the sentence that read BSI shall have the right to reject cane before it is weighed and ticketed at the factory scales has been removed. That haven't been the case, we feel that we have now cleared the way for there to be an agreement."

Jules Vasquez
"So what happens next sir?"

Belizario Carballo - CFO, BSI
"Next, we expect to have an agreement as early as possible."

They expected an answer today, but they didn't get one. And why? Because the farmers say it's not that simple or straightforward. They still have concerns that in the revised draft - BSI is still trying to slip in its Harvesting and Delivery Control Unit. Today we spoke to Chairman Ezequiel Cansino - he said that even with the revised draft, there are still concerns:..

Ezequiel Cansino - Chair, Com of Mgmt, BSCFA
"Still there are small concerns, which we don't see it specify exactly who will be in charge of that. It's not so clear. But we want to discuss with the 18 directors and have the advice of the attorney."

Jules Vasquez
"The BSI is saying its completely in the hands if the SCPC, but from looking at the agreement, you are not satisfied that....."

Ezequiel Cansino
"That's the concern of some directors and we will have to take the opinion of the 18 directors."

Jules Vasquez
"Now I am told that the directors are split - that some wanted, some don't."

Ezequiel Cansino
"We have some directors who are advising not to sign it, about 3-4 of them. But the majority is saying that we have to sign it because people are asking for that."

Jules Vasquez
"Is there any chance it might go back to another general assembly?"

Ezequiel Cansino
"I don't really believe that it will happen either before Christmas. Maybe after Christmas we will be able to have another...."

Jules Vasquez
"But if the directors can't find a majority, then you would have to go back to an assembly."

Ezequiel Cansino
"Yes, I have to go back to assembly."

Jules Vasquez
"So, no rest from stress for you this Christmas?"

Ezequiel Cansino
"No. I hope that we could finish before Christmas, but that's not possible."

Cansino was waiting for the start of a meeting of the directors to consider the new revised draft - but it seems that they couldn't get all the directors together. Indeed, we didn't get that sense of urgency - and that may be because both sides are pretty much reconciled to the fact that the season cannot start this week:..

Jules Vasquez
"Let's say that it's the best case scenario and they agree to sign. How soon is the soonest the season can start?"

Belizario Carballo - CFO, BSI
"Well, I would prefer to wait until we sign because last week we spent the whole week speculating; if we sign Tuesday, we start then... and we spent the whole week speculating and nothing happens. The response is let's wait until we sign. The parties at that point plan when is the best time to start."

Jules Vasquez
"We won't have a cane season open before Christmas?"

Ezequiel Cansino
"No. That's not possible."

Jules Vasquez
"Most likely early in the new year if best case scenario."

Ezequiel Cansino
"Yes, I think so, but if many branches are calling and they want to start on the 27th, but we are not sure about that."

And so while the season is delayed there are over 1.3 million tonnes of cane in the fields awaiting harvest. That would be a bigger crop than last year - and the December eighth start date was set to create at least a 6 month window to grind all that cane before the rains start in June of next year. But while that window is getting smaller, the cane quality is actually improving. Carballo explained:

Belizario Carballo
"The delay is helping with the quality because the cane is having more time to sort of and the fields are getting dry and there is the more consolidation of sucrose, so the quality will be better. So we are sacrificing quantity, but we are getting a bit of benefit on the quality."

And so while that is one very modest upside - other than that, the prognosis is down all around. And the bad guy of the moment seems to be BSI. In press releases last week, the NTUCB and the Government pounced on them for bad faith tactics. It seems the government one really got under their skins - we got feedback today:..

Jules Vasquez
"Why would the government which is intimately familiar with these negotiations, why would it say ASR/BSI must be equally reprimanded for their bad faith in having trying to undermine the SCPC?"

Belizario Carballo
"To be honest, we are very aggrieved about that statement. We feel it a reaction to the NTUCB statement that was based on a misinformation. We find it particularly unhelpful in condemning one of the parties that is engaged in a very delicate and complicated and difficult negotiation trying to reach an agreement to go out and seek to condemn it, we find it very unhelpful to a process that had in fact been advanced by the intervention of the Prime Minister. We find it very unhelpful for there to be this level of condemnation of one of the parties at a time when there was communication."

Jules Vasquez
"What you are saying sir with greatest respect it doesn't really make a lot of sense because the government in its first paragraph blast the NTUCB, so then how can it be that government is reading from the same script as the NTUCB? The government is very clear on this. It's not that the government is reading from NTUCB script."

Belizario Carballo
"How can that be so clear when I am telling you that there is no item introduced and I can actually show you the documentation to prove it."

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