Cane farmers facing huge drop in sugar sales to Tate and Lyle

A letter from Tate & Lyle delivered to the B.S.C.F.A. on Tuesday has sent shockwaves through that Association, which governs eighteen branches in Orange Walk and Corozal. Citing the fluctuating EU market, the company proceeded to inform the B.S.C.F.A. that it would be purchasing fifty-five thousand tons less of sugar from them under the Fairtrade agreement. What’s more, Tate & Lyle has changed the payment schedule, delaying the delivery of monies for Fairtrade sugar. It’s bad news all around, and prompted an emergency meeting of all branch representatives at B.S.C.F.A. headquarters. Mike Rudon was there and has the story.

Alfredo Ortega, Vice Chairman, Committee of Management, B.S.C.F.A.

“It came as a bombshell because we did not know anything about that. So it is not something that we went to a negotiation and know that this will be happening and to let us know that this will be happening in a certain period of time so that we can prepare ourselves. It only came like that and according to the letter, it will be implemented as of the 2014/2015 crop.”

Mike Rudon, Reporting

The crisis facing the BSCFA and sugar cane farmers is simple but significant. Last year Tate & Lyle purchased sixty-five thousand tons of Fairtrade sugar at sixty dollars U.S. per ton. This year the company says it will purchase only ten thousand tons of sugar to start with. That scenario sent cane-farmer representatives into emergency session at two-thirty this afternoon.

Alfredo Ortega

“It’s a huge loss. Last year we got six point nine million Belize dollars and it was only sixty thousand tons that was sold. This year, what they had proposed to buy from us was sixty-five thousand—sixty to the E.U. and five thousand to the US—so that is what we will be getting this year. But this coming crop, the 2014/2015 crop, they are saying that they will only be buying as a minimum ten thousand tons. So it is a very big reduction from six point nine to almost one point two million. It is a very huge, the difference and it will definitely create problem within the organization.”

Alfredo Ortega

The six point nine million dollars, and indeed the millions received ever year from the sale of Fairtrade sugar, are pumped back into maintaining certification standards, and also into projects to benefit cane-farmers with a view to increase production and develop the industry.

Alfredo Ortega

“That money is used to comply with the standards with the floor standards because you know they have some heavy standards that we need to comply with: the use of agrochemicals, the environment, child labor, administration and many things that we have to comply with. And many of these funds is being used in compliance of these different programs. And also these funds are used in granting help to the farmers in regards to agrochemicals and other programs that they put on board. And also we have social programs that we have been helping the education sector with infrastructure, healthcare, medicine and whatnot. So with this reduction, that means that many of those programs that we were contemplating before that we won’t be able to do so and many of our staff at this point will have to…we have to come to a cut in regards to staff because of this situation.”

The branch chairmen assembled today have come up with a tentative plan of action – tentative because they’re still trying to understand the move by Tate & Lyle, and they have to understand the causes and ramifications fully before any decisive step is taken.

Alfredo Ortega

“It’s something that harms us and we will be sending a letter to them. We’ll be analyzing very in depth this situation and we want to know if it is really the market out there that is causing this situation or if it is another thing. So we will be analyzing this situation and looking forward to sending a letter to Tate and Lyle again to see what is the market situation into this. Because the letter that they sent is not too clear, it says that the market situation is the problem, but it takes us into a bad situation right now because it just came in, in surprise. It was not something that was forecast before.”

And while analysis, information gathering and dialogue is the order of the day, the first, and perhaps hardest task will be convincing ASR to revisit the decision because of the severe impact anticipated.

Alfredo Ortega

“I think that the window of opportunity is very limited because they are the ones that pay it, they are the ones that make the decisions. So the best thing is for us to dialogue and negotiate how best and to let them know what negative impact it will have on our farmers and also to the industry of Belize.”

Where the change in payment schedule is concerned, the B.S.C.F.A. intends to consult with other Fairtrade certified countries to determine if all have received the same treatment from Tate & Lyle. Mike Rudon for News Five.

According to Ortega, the least amount of Fairtrade sugar ever purchased from Belize has been fifty thousand tons.