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The problem with bagasse

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belize sugarcane

Posted: Tuesday, December 21, 2021. 4:59 pm CST.

By Aaron Humes: Bagasse, what remains of the cane stalk after it is processed, is quite literally good for nothing – except, it seems, fueling the nation.

Since 2008, a co-generation electric project based at Tower Hill has provided up to 15 percent of national electricity, ranking behind that imported from Mexico and hydro-electric dams in the West.

But for something so nominally worthless, it has produced its share of contention leading to the breakdown of relations between the Belize Sugar Cane Farmers Association and BSI/ASR. Many times between 2014 and 2017 there has been a late start to crop leading to a loss of revenue of up to 20 million.

And once again, bagasse is contributing to the current delay in the start of the season.

Put simply, according to Oscar Alonzo, CEO of the Belize Sugar Cane Farmers Association, BSI/ASR is collecting the lion’s share of the money generated from bagasse used at BELCOGEN which comes from the cane delivered by farmers.

BSI has been paid, he said, up to $143 million from 2009 to 2020, and since 2014, it and BEL are not required to disclose details of the deal for co-generation – how much BEL charges, and what profits BSI makes.

What they do know, said Alonzo, is that since 2014 they have been paid just 18 cents per ton of bagasse when they felt they should be paid a far higher percentage. They have suggested a price of five dollars, just under one-sixth of the projected value.

Their argument is that bagasse is a by-product of their cane and therefore they should be paid for it similarly to what they are paid for sugar and molasses.

But the argument is a non-starter for BSI/ASR and Mac Maclachlan, who delved into the history of the issue in a Monday press briefing.

As he reminded, at the start of the project that would become BELCOGEN, BSCFA were not interested in getting involved in eliminating the dangerously flammable waste product.

When the matter was first discussed in 2014, the 18-cent value was intended to be the end of that discussion – BSI/ASR is the only producer in the region to put even that much value on the product.

But he appeared to hold the door open on a reconsideration: “We’ve said repeatedly – if BEL are happy to increase the tariff giving bagasse a value, we’d certainly be prepared to discuss with farmers how that’s distributed – but until that happens, there’s no discussion to have on that issue.” He noted that there is precedent, for example, in Mauritius where the value is set by the government.

Director of Finance Shawn Chavarria added that BSI/ASR has shared its financials for the BSCFA to see the full picture, including the mostly unpaid $120 million debt saddling BELCOGEN alone.

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