Friday, February 6, 2009

CANE FARMERS STRIKE IN BELIZE

JOHN GILLETT, FACTORY MANAGER, BELIZE SUGAR INDUSTRIES

In 2001 the new sugar act was put in place which called for a reform in the Sugar Industry of Belize. This was put in place as a result of a study that was done in the sugar Industry of the Caribbean and the challenge to the World Trade Organization against the African, Caribbean and Pacific Countries brought about by Australia, Thailand and Brazil as a result of preferential treatment of sugar to these Countries. This was the case because Sugar from these Countries was given duty free access into the European Union, while other countries were disadvantaged by having to pay duty. The matter went to the WTO and the ruling was against the ACP (African Caribbean Pacific) countries.

The ACP countries asked for a period of reform so that they can put their industry in order and agreed to impose the proposed price cut gradually which would lessen the impact on these countries. The request was accepted and it was agreed that a 5% price cut would be made for 2006 and 2007, 12% July 2008 and 19% Sept 2009, making a total price cut of 36% of sugar into the European Union. The EU is Belize’s biggest export market.

The EU also granted all ACP countries a financial package to ensure that the reform is done so that the Sugar Industries remained sustainable. This financial package would continue up to 2012. A study was undertaken for the CARICOM region, and it was determined that the industries of Belize and Guyana would survive only if the reforms were undertaken. Both Field and Manufacturing sectors needed to reform and while BSIL has taken on and is moving swiftly ahead with reforms at the Factory, the Farmers on the other hand have been doing very little in the way of field reform.

Quality and yield improvement were two ways identified to improve the field sector immediately. Field rehabilitation was the way to improve yields and the payment by quality system, using a Core Sampler was the means to improve quality.

The new Sugar act was passed in 2001, but the necessary funding to purchase a Core Sampler was not obtained until 2005 when the Farmers paid for 65% of the cost and BSIL 35% of the cost, that ratio being the way net revenue is shared in the sugar industry. The Sugar Industry Control Board (SICB) being the overall body in the Sugar Industry appointed the Sugar Cane Quality Control Authority (SCQCA) to implement the payment by quality system. The SICB & SCQCA have representation from BSIL, the Farmers and Independent members. 

The SCQCA is an independent body with an appointed Manager. The SCQCA started to evaluate the payment by quality system in 2007 with the mandate from the SICB to implement in 2008. However the Farmers asked for one more year of trial so that they can get their house in order and the request was granted. Even with that concession, they asked for further concession for the 2009 crop and asked those who volunteered to sign up. 1,638 out of 5,800 Farmers volunteered to be paid by the quality system. However this number represented 52% of the total cane deliveries to the Factory. Those who did not volunteer would get the residual average cane payment.

In a process of payment by quality system there will be variances in quality depending on the raw material that is being supplied. This was proven to be the case as some Farmers made every effort to deliver cane with good harvesting practices, even paying incentives to their Cane Cutters to ensure that this was done. Others continued with the same bad practices and when the reports were generated for the first seven weeks there were differences in the price paid to Farmers. The average price for first Payment was $36.86, and the reports showed that some Farmers got as high as $49 while others received as low as $24. However the average price still remained at $38.86. It must be pointed out that all Farmers payment would still total 65% of the pie and BSIL 35%.

A meeting of all players was called by the Prime Minister, Hon. Dean Barrow on January 15, 2009 and it was agreed that the payment system would continue. On Jan 19, the Committee of management of the BSCFA met and decided to go against the agreement reached with the PM and threatened to go on strike if the Payment by quality system was not suspended.

They met with the SCQCA, the DPM and the SICB to resolve the issue. On Friday Jan 30, 2009 they reached an agreement with the SICB to suspend the Payment system for this crop, guarantee a first payment price not less than the first payment for the second and third year and then full implementation on year four. This was at the request of the BSCFA representatives in the meeting. When they emerged from the meeting they had a meeting outside the SICB office and rejected the proposals, stating that they wanted complete removal of the Core sampler.

On Monday Feb 2, 2009 at 3:00 a.m., the farmers blocked all entrances to Orange Walk Town, including the Tower Hill Toll Bridge preventing any vehicular movement into and out Orange Walk Town. The Prime Minister held a press conference and appealed to the farmers to unblock the various points and then dialogue would continue. The farmers wanted the Prime Minister to come up and talk to them at the Bridge, but the Prime Minister said he would not in a mob situation. If the farmers did not clear the road by 4:00 pm, then the Security forces of Belize would do so. The deadline came and went and in the ensuing chaos one of the farmers lost his life and ten were injured.

The alternative of an increasing quantity of poor quality cane will produce losses all around and could initiate a very rapid closure of the mill, leaving no place for the cane to be processed and devastation for Northern Belize. BSI maintains that they remain open to further negotiations with all parties involved, but the responsibility for implementing the necessary changes must be assumed by all stakeholders if it is to be effective in ensuring long term viability.

1 comment:

Elihue Bonner-email:letselec@yahoo.com said...

After reading this post, It clearly shows dialog with all parties involve, however to my mind, I believe that for something of such vital importance to all parties involve, I don’t really get the satisfying feeling of a job well done by any of them in conveying vital information, not only to their peers, but also to the "public". Remember if this industry should fail, it will not only affect the northern districts, it will also affected the entire nation. Folks, brethrens, investors, please let’s get it right this time.

Mr. Elihue Bonner