Citrus growers prepare for Saturday showdown
In a global economic environment that appears to be permanently rigged against producers of commodities like sugar and bananas, Belize’s citrus industry stands out as a model of potential prosperity. With prices climbing and world demand forecast to remain strong, long suffering orange and grapefruit growers are just now beginning to reap some well deserved rewards. But amidst all the optimism, the industry is in turmoil as farmers large and small remain at odds over the future of Belize’s most important agricultural export. News Five’s Janelle Chanona reports.
Janelle Chanona, Reporting
The continuing chaos in the citrus industry is expected to climax on Saturday when the committee of five presents its findings regarding the proposed investment in the Citrus Company of Belize by Eastern Caribbean interests. That presentation will be made to the Citrus Growers Association at a special general meeting. To get a better perspective on the issue, this week the committee invited Dr. Thomas Spreen, Professor and Chair of the Food and Resource Economics Department from the University of Florida to share his projections on the global citrus situation. Accepted as one of the world?s experts on the economics of citrus, Spreen believes that for the next five to ten years, prices should be the highest in two decades.
Dr. Thomas Spreen, Professor/Chair, Food and Resource Economics Dept. U.F.
?Citrus is a crop where even if we went out today and planted trees, it would be at least three years before we got any fruit off those trees. And a good five or six years before significant amount of fruit came, so I?m arguing that at least for the next five or six years we are going to be in a very good price environment.?
Brazil and Florida produce eighty percent of the world?s supply of orange juice. But the effects of disease, hurricanes and urbanization in the United States and Brazil means that countries like Belize will see increased market share and profits. Enter the investment agreement between Citrus Products of Belize Limited and Banks Holdings. Spreen says it may not exactly be a match made in heaven.
Dr. Thomas Spreen
?It may feel good to say that there?s a Belize brand being marketed in Costa Rica or Trinidad but it may not make a lot of business sense to do that. It may make a lot of sense to sell your juice to a world brand like Minute Maid or Tropicana, let them do all the marketing and promoting that product and be content to being a supplier to those brands. You know you are not playing with the little boys here when you get into the marketing of orange juice. So my argument would be, you are in a very strong pricing environment anyway, you are going to make good money both in the grove and at the plant. That might make more sense at least for the foreseeable future. I would never want to argue that you?d never want to sell an asset but you?d want to make sure if you are going to sell an asset or a share of that asset, that you get a very favourable price for that asset in the pricing environment that we are in today.?
But local officials have maintained that in addition to getting brand recognition, Belize needs the multi-million dollar Caribbean investment to make a dent in the company?s more than eighty million dollar debt.
Henry Canton, C.E.O., C.P.B.L.
?Whenever the price of citrus gets high the majority take goes to the growers and not necessarily to the processing, so there are some difficulties and we don?t want to change that. Because we feel that with money in the pockets of the growers we will get volumes and quality of fruit. However, it is a burden on the company so even with higher prices it has become much more difficult for the processor to be able to take itself out of that debt.?
Under the terms of the deal, the Caribbean partners would take control of forty six and a half percent of C.P.B.L., at a cost of twelve and a half million U.S. dollars.
Bridget Cullerton, C.E.O., Citrus Growers Association
?The whole money is going into debt reduction rather than make the factory bigger, greater. It is to reduce that debt.?
Janelle Chanona
?So what is dollar value of debt prior to the twenty-five million??
Bridget Cullerton
?Well it is about eight-two million Belize, with about sixty percent of that being the long term, and forty the short term.?
How the company has decided to take itself out of that debt has sparked numerous criticisms, particularly from industry stalwart Denzil Jenkins.
Voice of Denzil Jenkins,
?And having read the agreement, I would have to conclude that because those who have signed: the chairman, the vice chairman and the C.E.O. of C.P.B.L., because they are not fools, there has to be a deliberate attempt to deceive the growers. Let me say that it is widely rumoured around that certain individuals who are prominent in the industry are linked up with these Caribbean partners, so that benefits will be reaped off shore. We do not yet know what agreement is going to be effected with the Caribbean partners in connection with the sale of products to the Caribbean and elsewhere. There is room for all sorts of hanky panky.?
Saturday?s special general meeting will be held on the grounds of the Citrus Growers Association at mile nine on the Stann Creek Valley Road starting at nine thirty in the morning.
Reporting for News Five, I am Janelle Chanona.
Depending on the maintenance of current world market prices and local weather, next year’s citrus crop could bring in as much as sixty million U.S. dollars in export revenues.
