By William Ysaguirre
Free Lance Reporter
The Citrus Products of Belize Ltd. (CPBL) has fallen behind in payments to citrus growers again.
CPBL had fallen behind in its payments for two weeks before growers got paid last week, but is once again late in payments. The Citrus Growers Association (CGA) has sent out an advisory to its members to not make a wasted trip to the CGA offices to receive payment as there will be no cheques waiting for them just yet.
CPBL’s Chairman of the Board of Directors, Dough Singh, explained to the Reporter that: “Every year CPBL has utilized working capital loans from banks during the crop season. Heritage Bank has approved such a facility for CPBL, but Central Bank has not yet given its approval.” Singh had no explanation for the delay in Central Bank’s approval.
CGA’s General Manager, Henry Anderson, explained further, saying the CPBL normally has a cash flow problem around this time during the harvest each year, but in the past the company used to get a $19 million credit facility from First Caribbean International Bank (FCIB), which CPBL would pay off within three to six months.
FCIB, however, has since pulled out of Belize and divested its holdings in Heritage Bank, and this year, CPBL had applied to Heritage for a $10 Million credit facility. Heritage approved the credit facility last December but Central Bank has yet to approve the deal.
The Central Bank’s Board of Governors normally meets each month but did not meet in December or January, and last month’s meeting did not have the CPBL loan on its agenda so it was not discussed.
When a similar situation developed last February, CPBL had gotten over the hurdle by a $2 million loan from Heritage Bank and another $2 million loan from Government of Belize via PetroCaribe financing, all of which it paid back within three months.
As Prime Minister Dean Barrow explained the situation back then – in addition to the $2 million working capital, GOB provided bridge financing to buy out the CPBL’s US $6.5 million loan with FCIB.
The Social Security Board of Belize (SSB) took on the loan, replacing FCIB as CPBL’s creditor, but SSB also got 10 percent of the 51 percent majority shares that the CGA held in CPBL, in exchange for another $9 million which CGA owed SSB. As Singh explained that arrangement, the deal was “very solid” since CPBL had a net book value of over $92 million dollars. “The fact that it’s not liquid doesn’t mean that it doesn’t have the ability to pay at some point in time.”
The citrus industry is halfway through this year’s crop and Anderson says so far, some 2 million boxes of oranges have been delivered along with about 220,000 boxes of grapefruit. Typically, the large growers deliver about 1.9 million boxes, while the medium–sized growers account for another 1.7 million boxes. The smaller growers delivered about 455,000 boxes last year.
The delay in payment to growers can have an unpleasant fall-out, in that if they cannot pay their field workers who pick the fruit, the workers – many of whom are migrants – may move on. The fruit on the trees are mature and ready to be picked, but if the workers move on because they cannot be paid, the growers will have no one to pick the fruit which will then waste, resulting in a financial loss to the growers and the industry as a whole.
Anderson admitted it’s not an easy time for the industry, as growers are already having to absorb an 80-cent increase in the cost of diesel, which drives up the cost of delivering fruit to the factory.
He said the industry has already been suffering from last year’s drought followed by floods, which exacerbated the other challenges of Huanglongbing (HLB) disease (citrus greening), and climate change.
Anderson sees this latest hiccup as having a domino effect on the farming sector that is already suffering from the Fyffes pull-out, which impacted the banana industry in the south and more recently, the Fruta Bomba closure which also displaced hundreds of workers.
The sugar industry is also still reeling from the effects of last year’s drought, which hurt many small farmers, when the cane they planted failed to sprout, leaving them indebted to the banks. For the farm field workers who move around looking for work, it makes for a very uncertain future.