El Salvador: The Neverending Fight Over Sugar Profits

A study planned by the Ministry of Economy on the costs of production and marketing of sugar, could help resolve the conflict between sugarcane cultivators and agro industrialists.

Wednesday, June 21, 2017

Sugarcane farmers continue to demand that they receive an additional payment as part of the revenues generated by the mills from the sale of surplus energy produced. A study that the Ministry of Economy announced that it will carry out, will allow an analysis to be made of the costs of production, consumption and marketing of sugar and honey, and the generation of energy through bagasse. With this study, it will be possible to determine if a reform is necessary to the Law on Production, Industrialization and Commercialization of the Sugar Agroindustry, as proposed by sugarcane farmers. 

See also "Sugar in Central America: Export Volume Down 21%"

"... The law, which regulates all of the sugar agro industry, establishes that every year a technical study is carried out, from which inputs are generated for the Regulation of the Sugar Cane Payment System. However, since 2001, when it came into effect, no such analysis has ever been carried out with these characteristics."

"... This regulation would define the economic value of sugar and honey, which has been maintained for the last 16 years at 54.5% for producers, and 44.5% for mills. The head of the Minec, Tharsis Salomón López, explained to Elmundo.sv that "... "The law does not say that the study will determine the percentage, but that the study will help producers and refiners to agree on what the percentage will be. Now there will be a technical basis for discussing and deciding how to negotiate all of the variables."

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More on this topic

Conflict Over Sugar Profits in El Salvador

August 2017

Farmers insist on a reform to the law so that they receive an additional payment from part of the revenues generated by the mills from the sale of surplus energy.

The eternal conflict between cane growers and industrialists over the use of cane bagasse in power generation remains unresolved. The Association of Producers of Sugar Cane (Asprocaña) is proposing reforming "... Articles 2 and 39 of the law in which there is talk of the distribution of income between mills and producers, so that the latter receive a share that corresponds to them for the raw material."

El Salvador: How to Distribute Sugar Profits

October 2016

A study requested by the union will determine how sugar profits should be divided between producers and industrialists, providing information for a law reform.

The information derived from the study, which according to the Salvadoran Sugar Industry Council, is being undertaken by the FAO, could solve part of the conflict over the distribution of profits between manufacturers and producers.

Sugarcane Growers Want Part of Energy Revenues

August 2015

Producers of sugarcane in El Salvador have proposed amending the regulations so that they can receive part of the revenue generated by the mills from the sale of surplus energy produced.

The union of producers stated that the practice of producers receiving revenues generated by the mills from energy production using sugarcane is very common in other countries.

Guatemala: Prices of Energy from Bagasse

February 2014

A request by sugar mills to equate the prices of energy produced from bagasse with that generated by coal has been rejected.  

Guatemala's sugar mills asked that within their cost methodology from May 1st 2014 to April 30th 2015 for biomass generation to be indexed to the price of Puerto Bolivar coal (Colombia). However, the National Energy Commission (CNEE) rejected the request.

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