Friday, November 26, 2010

Government agrees to subsidize the sugar industry at the expense of development of the rest of the country needs in Belize.

BOTH POLITICAL PARTIES, THE UDP AND PUP APPROVE THE $10 MILLION LOAN TO BSI SUGAR FACTORY in Belize this past week in a House Sitting.
There was little else the politicians could do. There are about 20,000 votes in the SUGAR NORTH controlling a number of seats in the House of Representatives. In their own interest in winning elections, both political parties had to vote to grant a $10 million dollar loan to bankrupt BSI SUGAR FACTORY, who in turn are financially overextended with bank loans to a couple of foreign banks, for monies and loans used to pay for the addition of a BAGASSE waste electrical generating subsidiary system added recently to the factory. The BSI Factory had spent the money held in ESCROW for sugar cane farmers payments, with their expansion project in co-generation in electricity building problems, apparently underestimated. This is believed to be now coming on line with some additional revenues from sugar cane waste in sold electricity to the National Grid. The farmers want the money they are owed NOW. The Factory have spent it. So they must borrow it somewhere.
The gamble by the two political parties is that the other industries and voters in Belize, from whom the money is being stolen from their projects, will not rebel and vote them out of office come the next election. It is likely that the bridge over the Belize River to be built for the heavy 18 wheeler freight traffic going to Guatemala, will be postponed a few years. Certainly the extension of the highway system in Toledo South, to extend the Belize highway network to join with the Central American improved paved highway network, will have to be postponed, and of course there are bridges, and schools that now, will also not be built for about another five years. Certainly we cannot get a grader to grade the streets in my community of Hillview, which are full of gullies, ravines and deep holes making it almost impossible to negotiate with a vehicle. The government claims ‘ no money is there to do so ‘. Belize is a cash strapped country and some civil servant told me just last week, that we now owe about $3 billion dollars in foreign debt and local debt. For a population of 350,000 people that is a lot of debt.
The UDP in power has been hiding the National DEBT since they came in office over the last two years. We cannot find published anywhere accurate figures on the economy, and the Debt to GDP ratio. The Prime Minister who also is the Finance Minister, hides the Debt to GDP ratio figure like it was the plague. Which for him and his party in power, I guess it is? He is afraid the knowledge of the Belize Debt would lose his party the next election and indeed it could if improperly handled. I fully expect the PUP in the OPPOSITION to jump on this as a campaign issue.
From what has been published, it is not clear to me, who owns the BSI Sugar processing Factory? Certainly it is not the cane farmers. Otherwise they would not be insisting on bankrupting the BSI sugar factory even more than it is. The Factory from things the Prime Minister has said, has a $30 million debt to two foreign banks and this additional 10 million to be paid after the banks get theirs, will make the total Factory debt $40 million. The farmers have complained that their sugar cane is also going to make the factory more money from electrical generation from the waste bagasse, but they are not going to see the electrical revenues added to their sugar cane payments. Those profits will stay in whoever controls, or owns the BSI Sugar Factory. The farmers argue that in the end they are having to pay for the profits that the FACTORY will eventually enjoy, whenever they finish paying off the debts. If they ever do?
The arguments go back and forth. The sugar crop is declining. Indeed, you could say it is in a fatal spiraling plunge like a jetliner at 40,000 feet that has lost it’s engines. The sugar cane farmer associations and the BSI Factory are two separate profit earning entities. One blames the other. The factory insists that the farmers produce more sugar cane with a higher sugar content. The problems with this as I an outsider understand it, is that the quality of the sugar in cane is lost in a number of hours after being cut, delivered and processed. The sugar content goes down as the moisture in waiting delivery trucks evaporates. There are long lines of trucks for miles waiting to be delivered with sugar cane. They sometimes wait two days and during that time, the sugar quality is lost. The farmers blame the factory. The Factory say they want a better cane farmer delivery system at the rate of 6000 tons a day. Farmers are in turn competitive among themselves and the ability to cut cane and deliver it, is dictated by weather conditions and availably of labor. The job hunting troublesome criminal population of the port of Belize City who cry to their politicians for jobs, will not go North and cut sugar cane. It is too hard work they say.
At any rate, it has proved impossible to organize truck deliveries of sugar cane in an orderly manner, to keep the truck delivery system from over 3600 farmers in a timely manner to get the best quality sugar content. If the trucks have to wait in line for days, the crop quality goes down automatically. The factory and the farmers thus lose money and this is the end result for the dropping sugar production.

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