Sugar Industry gets multi-million dollar bailout
A bail-out for the ailing sugar industry was announced today. Following a meeting between Government and the Belize Sugar Industries, the Belize Cane farmers Association, and the Sugar Control Board, a memorandum was signed committing the government to provide a temporary solution to avert a major crisis in the sugar belt that would displace thousands of farmers. B.S.I. has been unable to pay its debts because it owes the ING Bank and the First Caribbean Bank, sixty million dollars and another sixty-four million is owed by its subsidiary BELCOGEN. The bailout will provide some relief in time for the Christmas and the new crop, but will it prevent the collapse of the industry? News Five’s Jose Sanchez has a report on today’s developments.
Jose Sanchez, Reporting
The government today unveiled its plan to bail out the Sugar Industry which could not pay the scheduled third payment to cane farmers. According to Belize Sugar Industries Chairman, the death knell for caneros rung in September.
joey montalvo
Joey Montalvo, Chairman, B.S.I.
“We knew that ING were in some ways denying us the final drawdown on our thirty U.S. million dollar facility. We knew that the withdrawal of the financing facility was imminent. That occurred on the twenty-fourth of September when ING gave us a cancellation notice saying that they were withdrawing their facilities and that they were giving us six months to find another financier.”
When another financier could not be found, the industry faced an imminent collapse. But why would the government bailout an industry failing due to its own inefficiency? The PM explained.
Dean Barrow
“I don’t think any red blooded Belizean would say that the government therefore wasted ten million dollars of taxpayers’ money. The government, the people, the caneros and their family, the north of the country would know that government did everything within its power to preserve their livelihoods.”
Six thousand farmers and by extension their families mounting to 18 thousand Belizeans will be secured by more borrowing.
dean barrow
Dean Barrow
“Domestic borrowing. We will issue a treasury note which will be bought by the Central Bank. I think S.S.B. might be interested as well. We will issue a treasury note which will be bought certainly as of now by the Central Bank. It will be a five years note. We’re giving the exact same terms B.S.I.—five years, seven and a half percent.”
There was hope that funds from the Social Security Board could be used to bail out the industry. However, the collateral and previous arrangements would not have made the deal a secure one for S.S.B.
Dean Barrow
“This is where things got hairy with S.S.B. B.S.I. is given an irrevocable payment instruction to the purchasers so that from the sale of the sugar the servicing of the loan should occur. The problem is that if ING really pulls the plug, and there is no replacement financing. They would have first dibs on those proceeds. So it is without a leap of faith, Mr. Montalvo put it somewhat colorfully to me, he said government, the cane farmers and B.S.I. must all hold hands and take the plunge into darkness. Well perhaps that’s a little bit of an overstatement, but the point is Patrick that while we are securing ourselves as best we can, there is no question but that in normal commercial transaction, the security would not be enough. That is why B.S.I. could not proceed with S.S.B.”
Government is putting another director on the board of BSI that is Sir Manuel Esquivel. Audited financials will be made available to the government and farmers.
alfredo ortega
Alfredo Ortega, Chairman, BSCFA
“It’s not only the life of six farmers but it is the whole north that depends on the sugar industry. We as farmers, we in the B.S.C.F.A. as leaders, we are committed to work very closely with the S.A.P.C. and the S.I.C.B. and B.S.I. to reform within the industry. It is time for us in a no turn back point. We are committed to work closely and to delivery for the livelihood of our farmers.”
Joey Montalvo
“Give me good quality cane and I’m gonna put that cane in the mill.”
And with that hope for a good cane season, the MOU was signed. Reporting for News Five, Jose Sanchez.
Part of the agreement reached today is that the B.S.C.F.A. will implement a cane quality control program and it will work along with the Sugar Control Board to deliver a minimum of six thousand tons of sugar cane daily. At today’s press conference, it was also revealed that a possible financier is Banco Antlantida of Honduras to replace the ING and First Caribbean Banks.
As a nation, we are broke. Where is the commonsense or morality of forcing Belizean taxpayers to guarantee replacement of millions of dollars that appear to have been stolen or otherwise purloined?
Just tie the thieves up in a public place and let the sugar farmers punish them.
The only way to get better quality cane is to cut the cane and burn it!!! These trucks sitting at the factory for days before being processed is total waste of time MONEY and sugar. There has to be communication between the factory and farmers to make this work. BURNING cane before cutting caramelizes the sugar and quality is lost. Take a look at another country like Jamaica or Brazil.
To put on fertilizer and pesticide makes no sense if you RUIN your QUALITY BY BURNING!!!!!!!!!!
You really have to communicate a lot better to make this work.
What a way. The rich shall continue getting richer. And the poor shall remind the same or even worst. BSI bruk… That I didnt believe & still dont… Anyways this is the law in Belize unfortunately. Here is not what you know is who you know. We shall all pay triple the amount of this bailout shake of a multi-million dollar company’s bad decisions. The drama will continue…
I dont know who this bruce is but let me tell tou something it is not the burning of cane it is the mill that doesnt receive the cane on time. thats why the cane gets spoiled. are you a cane cutter? are you a cane farmer? do you know the cane process in the field… come on man dont speak what you dont know satatistics is some thing apart from the real job. and for what it is the fair trade thing if you open its page you will discover their true job is getting companies around the world to purchase from us in the lowest price possible… that is what the GOB should be dealing with…
Take from the poor and give the rich that is what the PM is doing. Reward the rich for their poor administration and greed by giving bail outs. I am sorry but the country is already in peril with its economy where will Mr. Dean get the money to replace the millions given BSI????? O let me think for a second that right raise taxes and take it out of the poor people who already cannot afford the basic needs. This is BELIZE NOT THE US. The US can afford bail outs not BELIZE
The underlying question is why is BSI in such a mess? Has there been fraud in terms of deviation from funds for them to need bail out? I mean, cane quality only goes so far, I don’t think that would be the only reason why the industry is in such a mess. As per normal, we wait til things go downhill to find solutions and try to fix a problem which is far beyond our control. Measures for cane quality should have been implemented a long time ago.
TELL DEM CANE FARMER SFI STOP ELECT SUGAR BOARD OFFICIALS WEH CORRUPT. DAT DA DI ANSA TO DEH PROBLEM….DONE!!!!!!
remember when a certain Belizean Prime Minister was talking so much about BELCOGEN dis Belcogen dat, Belcogen da wa good investment via DFC. Weh happen now. Where all di millions weh gaan to Belcogen end up? Cayman, Montevideo, Switzerland, British Virgin Islands, Bahamas, Luxemburg?
Maximum respect to PM Barrow. Thanks for realizing that when sugar was sweet we took care of Belize! I would have placed someone like Sir Manuel at BSCFA where I belive is the core of the problem due to corruption! This I beleive is a wake up call for farmers that if they don’t shape up the sugar industry will die! As a taxpayer I believe this $$$ is well invested and that reflects honest and transparent leadership!
It is time for new players to come into this market. I am a product of this Industry when it was really interactive – meaning there were men who negotiated with the Farmers & the sugar producer -BSI. Now, we must recognize that the Industry is one of interdependence and a Global Industry. My family has been a part of this Industry for over 50 years. I invested a lot of my time and inhertiance in improving this industry. The support was always luke warm. Maybe now is a better time to promote the change that was necessary then and now in our faces.
We NEED new technolgy and business saavy for this to remain an industry as well as an income earner for both farmers & manufacturers. The country will benefit as well.
Well…………………..IT’S BETTER THAN SPENDING MONEY ON BTL………
“All around the world it’s the same song.” This seems to be the year of the bail out and tax payers get stuck footing the bill. Mismanagement is what ‘s causing these companies to fail. Think about it. With better management, they wouldn’t be in this situation.
…………….The US supports its internal production of corn based ethanol with a 45 cent per gallon price support, while imposing a current 45 cent per gallon tariff on sugar cane ethanol. The solution to the crisis in sugar cane production lies in the US repealing these supports/ tariffs and allowing free trade of these commodities. All else is window dressing. The US Congress is held hostage by the US farm lobby, which supports these policies to promote domestic production of ethanol through corn. This keeps corn prices artificially high, (keeping US farmers happy) while keeping sugar prices artifically low. (The US is a minor player in cane production) It is a dirty secret few know about, but it is a fact. The CAFTA nations should appeal to the US in regards to economic and potentially political instability this causes. The US public knows very little about this policy as both parties are deathly afraid to suject themselves to the US farm lobby’s wrath.
i say that what the PM did was very good because if the sugar industry collapse we will have an economic depression and that depression will not only affect the farmers but also all of us the citizens of Belize.