Belize Sugar Cane Farmers Association (BSCFA)
Sugar Cane Producer, Belize
Sugar cane farmer, BSCFA © Fairtrade Foundation
Alfredo Ortega, Chairman of the Management Committee, Belize Sugar Cane Farmers Association, January 2011
Introduction
Sugar is produced in 121 countries around the world and global production now amounts to some 170 million tonnes a year. Most sugar is produced and consumed in the same country – only about 50 million tonnes is traded internationally. In addition to providing direct employment for growers on estates and smallholdings, the sugar industry gives indirect employment to hundreds of thousands of others and, by extension, supports the livelihoods of millions of family dependents.
Formerly the British colony of British Honduras, Belize gained its independence in 1981. It is the only country in the region with a majority English-speaking population, with smaller groups speaking Creole, Spanish and indigenous dialects.
With a population of just 321,000, Belize is the smallest country in Central America. Population density is low with almost 57% of the land remaining as pristine tropical forest. Tourism is the number one foreign exchange earner followed by crude oil, marine products, citrus, sugar, bananas and garments. Papayas and hot peppers are also grown for export while rice, beans, and corn are grown for local consumption.
Agriculture accounts for about 29% of GDP and employs 10.2% of the total workforce of 120,500 people. Unemployment stands at 13.1% and 43% of the population live below the poverty line.
Belize Sugar Cane Farmers Association
Sugar cane has been grown by many generations of farmers in the north of Belize, where the prevailing conditions make it the most suitable high-production crop.
The Belize Sugar Cane Farmers Association (BSCFA) was established in 1960 to represent all the sugar cane growers in the country. Its main functions include the provision of agrochemicals to members on credit or at discounted prices and implementing practices to improve the production, harvest and delivery of sugar cane. The vision of BSCFA is 'To be a dynamic farmers’ organization that contributes to a sugar industry that is efficient, competitive and sustainable and which enhances the economic and social development of Belize.'
BSCFA has a membership of more than 5,000 registered farmers who are actively engaged in growing sugar cane. The Association is divided into Corozal and Orange Walk Divisional Associations. These two districts in the north of Belize are known as the ‘sugar belt’ and are made up of two main towns and 40 villages. Each division is further divided into nine district branches and at every level the official representatives are democratically elected by registered cane farmers.
The sugar industry is an important socio-economic factor in Belize, providing significant employment, foreign exchange earnings, and rural stability. Poverty levels of around 30% of the population in the sugar belt are relatively low due to the incomes and employment generated by the sugar industry, which also finances housing, education, health and recreational activities through a welfare fund.
The average farm size is 3.1 hectares (7.5 acres). Most farmers supplement their income by working in construction or the informal sector, or by selling vegetables and other agricultural produce grown on their farms. In recent years, sugar cane farmers and their communities have been hit by rising costs for agricultural inputs such as fertilizer and fuel, as well as by natural disasters such as hurricanes.
Unemployment levels have risen to around 9% in the sugar belt and, at 65%, fewer students are completing secondary education because their families are finding it increasingly difficult to afford school fees, transport and meals.
The industry is facing an uncertain future as a result of changes to the international trade in sugar. The EU is making fundamental reforms to its trading partnerships and slashing the reference price paid for sugar from African, Caribbean and Pacific (ACP) countries, with small-scale farmers having to compete for markets with large-scale, low-cost producers around the world. In response, the industry is implementing reforms to improve efficiency, while the partnership with Fairtrade will mean a more secure future for the members of BSCFA and their families.
Background to the Belize Sugar Industry
Sugar cane is grown on almost 27,000 hectares (65,000 acres) of land. Around 120,000 tonnes of raw sugar are produced each year although the volume fell to less than 90,000 tonnes for the 2008/09 crop as a result of damage to the cane supply caused by Hurricane Dean in late 2007 and Hurricane Richard in October 2010 similarly hit the 2010/11 crop. The sugar sector accounts for 9.5% of the value of agricultural output and around 4.5% of GDP. In addition to the cane growers, 4,800 people are directly employed in the sugar industry and an estimated 40,000 people, representing 85% of the northern population, are dependent on the industry. The total revenue generated by the sugar sector is approximately $50m a year.
The sugar cane industry in Belize comprises three major stakeholder groups: BSCFA; the Belize Sugar Industries Ltd (BSI), which is the sole sugar mill and processor in the country; and the Government of Belize. BSI is the contractual partner of Tate & Lyle and has also been certified by Fairtrade. BSI’s employees own an 81.32% share of the company through a perpetual trust whose beneficiaries include 321 current employees and 98 retired employees, with a further 25 employees awaiting completion of the two-year qualifying period. Booker Tate, an agri-business subsidiary of TSB Sugar of South Africa, owns 10% of shares and the remaining 8.68% are owned by the Government of Belize.
Although the sugar industry is privately owned, it is subject to a high level of government regulation. All sugar cane farmers are required by law to register with the Sugar Cane Production Committee, the body responsible for coordinating cane production and related data and forecasting milling capacity, and which is made up of representatives from government, BSI, and BSCFA.
Problems facing the sugar sector
The sugar sector in Belize suffers from lack of investment and the need for modernisation at farm, processing and transport levels. The costs of producing sugar cane are increased because of poor or non-existent farm drainage systems, lack of modern plant types and harvesting machinery, and badly-maintained roads that prevent collection trucks reaching farms. After harvest, sugar cane is transported to the BSI mill by trucks owned or hired by the farmers. A lack of coordination used to mean large numbers of trucks converge on the mill creating lengthy queues which had a detrimental effect on the quality of the cane and thereby the ability of the mill to produce high quality sugar. This has been successfully addressed for the 2010/11 crop through the introduction of a Quality Improvement Programme funded by the Fairtrade Premium.
The factory has embarked on a programme to increase efficiency and to achieve best environmental standards as agreed with the government environment ministry. A large part of this has been achieved through the establishment of a major cogeneration facility to produce power using the residue of the cane. This project, which at $63m is the largest private sector project ever in Belize, was fully operational in 2010 and generates about 20% of the national supply of electricity from ‘bagasse’ which is a by-product of the milling process.
After milling, the raw sugar is transported by barge to an offshore deep water loading point where it is manually loaded on to ocean-going ships. This slow and cumbersome procedure considerably increases costs which could be substantially reduced with the establishment of a deep water harbour and bulk loading system.
Reform of the EU sugar market
The global sugar market has been heavily distorted by a complex combination of international trade agreements. Since 1968, as part of its Common Agricultural Policy (CAP), the European Union (EU) operated a system of high internal prices and export subsidies for its domestic sugar beet producers and import tariffs to limit competition – with the aim of protecting domestic producers and supplying the EU market from its own production. This policy, called Common Market Organisation (CMO) Sugar, led to overproduction, dumping of excess sugar onto world markets and depression of global sugar prices.
Alongside this, from 1975 the EU Sugar Protocol gave preferential market access to 18 ACP countries, including Belize, which included duty-free quotas and guaranteed higher prices similar to those paid to EU beet farmers.
Reform of the Sugar Protocol was initiated in 2006 to align it with the EU’s overall reform of the CAP and in response to the WTO ruling that illegal sugar export subsidies, quotas and tariffs must be phased out. While ACP suppliers continue to enjoy duty-free access for up to 3.5 million tonnes a year there has been a cut of 36% in the reference price over the four-year transition period to 2010. As well as former Sugar Protocol beneficiaries this also applies to the Least Developed Countries (LDCs) that are beneficiaries of Europe’s EBA arrangements – duty-free access for Everything But Arms. The current protocol will be revised when it expires in 2015, by which time quotas for ACP sugar may be removed and price guarantees phased out and replaced by market related prices.
Effect of EU reform on farmers in Belize
Belize consumes about 10% of the sugar it produces and has traditionally received quotas of 50,000 tonnes to the EU and 11,000 tonnes to the US. Until recently the balance was sold to the world market and to the regional Caribbean market (CARICOM) at prices slightly above the volatile world market price. Under the new EU arrangements Belize has enjoyed Duty Free Quota Free (DFQF) access to the EU since October 2009 but the 36% cut in prices has cost the Belize sugar industry $12m, including an $8m loss of revenue for the farmers
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In response to the EU reforms, the government and sugar industry have developed a strategy to meet the challenges of lower prices in its main export market and the need to be competitive in more open markets. The strategy includes reforms to improve the efficiency of both BSI and the sugar cane growers’ operations, and to address the needs of the farmers and their surrounding communities. Funding to implement this strategy has been secured from the EU compensation programme called ‘sugar protocol accompanying measures’.
How is Fairtrade helping?
Tate & Lyle has been purchasing sugar from Belize for over 35 years and in February 2008 launched its first Fairtrade sugar, sourced from Belize. The commitment to switch 100% of their retail cane sugar range to Fairtrade brought about a dramatic increase in UK Fairtrade sugar sales from £4m in 2007 to about £35m in 2010, and will help to provide a basis to improve the long-term livelihoods of thousands of farmers and enable them to plan for the future. For every tonne of sugar that Tate & Lyle purchases from BSI the members of BSCFA receive an additional Fairtrade Premium of $60 a tonne to invest in projects that will improve their long-term prospects.
Use of the Fairtrade Premium
The Fairtrade Premium is paid directly into a BSCFA bank account set up for this purpose. The receipt of the first premium payments in May 2008 saw the immediate implementation of an ongoing project to distribute subsidised fertilizers, essential to increase cane quality and quantity but which many farmers were unable to afford. A similar project for pesticides has now also been implemented. During 2010 an environmental programme was put in place and included:
- a pesticide programme to control froghoppers – a small insect and agricultural pest that regularly infests cane fields, so called because of its ability to jump great distances when threatened. More than one third of applications use biological insecticides, so reducing agrochemical use
- a herbicide programme to train the cane farmers in the effective use, handling, transport, storage and disposal of agrochemical containers
- a large-scale soil analysis project to analyse soil on all farms to map the nutritional needs of the different soils and more accurately target fertiliser use.
Farmers have also benefited from:
- repair of farm roads to transport cane
- provision of backpack sprayers and other farm equipment.
A social programme, approved by the General Assembly, has also been developed to support community projects in the sugar cane growing areas which have been identified through needs assessment evaluation with their local communities. Priority areas include support for secondary and college education and local health initiatives:
- student grants – to enable children to continue their education
- school grants – for repairs and improvements
- grants to churches, youth groups women’s groups and a community library
- welfare grants to poor families, the elderly and disabled for medical costs
- funeral grants
- water tank system installed in one community.
A sugar cane re-planting programme is planned for 2011/12. The overall technical support programme is a groundbreaking initiative for the BSCFA in its 50-year history and is helping to ensure the implementation of the adaptation strategy adopted by the Government of Belize for regeneration of the sector. All of these are contributing to improving farmer incomes ensuring that the cane farmers are in a better position to effectively respond to the changes in the EU regime.
Where to buy
Tate & Lyle’s range of Fairtrade sugar products sourced from BSCFA includes Granulated, Light Brown, Dark Brown, Caster, Icing, and Cubes.
Selected products are available from The Co-operative, Tesco and Waitrose as well as many independent stores.
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Belize Central Bank Report 2010, 29 April 2011, values converted from Belize Dollars
Fairtrade Foundation August 2011
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