The Belize Sugar Cane Farmers Association received some bad news last week from their British sugar buyers, Tate & Lyle PLC. Tate & Lyle is now exercising its option to delay payment for sugar supplied throughout the year until after the sugar has been sold! !
This is harsh treatment indeed, and the Belize Sugar Cane Farmers Association is justifiably upset. The new “minimum” quota set by the company was one thing, but the new stricture by Tate & Lyle, to pay only when the goods have been sold, is cause for concern!
As Javier Kemé, the chief of the BSCFA’s finance committee, told this newspaper this week, the method of paying after sales is relatively commonplace. However, traditionally Tate & Lyle has operated under an upon-delivery system. Why then is there a sudden change?
There is something seriously amiss here, and the sooner we get to the bottom of this puzzle, the better! It appears that BSCFA crossed the line and utterly depleted its fund of goodwill with Tate & Lyle when it deliberately delayed sugar production with its ill-advised strike.
BSCFA also broke faith with the ASR Group (American Sugar Refiners), the new owners of BSI, when it promoted a strike to reinforce its demand for payment for its bagasse by-product. In fact, BSCFA’s attitude towards the new investor appears to be downright belligerent!
American Sugar Refiners came to Belize as a white knight, to rescue a sugar industry which was tethering on the brink of collapse. ASR brought renewed confidence to the industry. It brought a guaranteed market for our sugar. It brought technology and help which allow our cane farmers to improve their per-acre yield, and it brought expansion to increase the grinding capacity of the factory, which translates into increased sugarcane production.
Any rational person would have expected Cane Farmers to rejoice at their great good fortune. They have been rescued from the jaws of disaster and given a formula for unprecedented success!
But the leadership of the BSCFA did not appreciate what they were getting. As soon as the rescue plan had gone through, BSCFA leaders began to play hardball.
They demanded an additional payment of $10.00 a ton for the bagasse by-product which for years had gone to waste, but for which BSI had found a productive use – as fuel to generate steam for turbines which would produce electricity.
When the company refused to bend to its will, the BSCFA leadership persuaded its membership to go on strike, which delayed the start-up of the grinding season for 56 days – from November 25, 2013 until January 20, 2014. One leader of the BSCFA even boasted publicly that he knew the strike would cost the company a million dollars a week!
The strike persisted until the government intervened and brought BSI management and BSCFA leaders back to the negotiation table. But by delaying the start-up of the grinding season for 8 weeks the BSCFA leaders convinced cane farmers that it was putting pressure on BSI to force the company to bend to its will.
In truth and in fact the strike was self-mutilating because the delay in sugar production in Belize caused Tate & Lyle to look elsewhere for its sugar supplies. This created an opening for other sugar-producing countries anxious to sell their own stockpiles of sugar, and has the potential to result in a huge net loss for Belize.
BSCFA leaders have not only landed cane farmers into a messy situation. They have also brought down on their heads the censure of the Fair Trade Foundation which in past years has provided millions of dollars in aid funds to assist cane farmers.
The Fair Trade Foundation has now suspended its assistance to Belize because BSCFA leaders have not been able to account for large sums of money entrusted to their care.
This is a new charge against the Cane Farmers Association. It is one that cannot be ignored! ?