Farm managers Egbert DaCosta (right) and Willard Tavares (centre) along with a worker gathering boxes of orange at the Trade Winds citrus farm at Bog Walk in St Catherine. (Photo: Lionel Rookwood)

A stalemate over funding between the Ministry of Agriculture and the Citrus Growers Association (CGA) could result in millions of dollars of oranges going to waste and the closure of the CGA's 60-odd year-old Bog Walk orange juice processing plant, the Business Observer has learnt.

With bare coffers, the CGA plant that sells orange juice under the Juiciful brand is unable to find the $50 million it needs to purchase fresh fruit being reaped this season by farmers across the island.

But Agriculture Minister Christopher Tufton has refused to lend the money to the association, saying that it has been grossly mismanaged and already owes over $120 million to the Government. Instead, the McConnell-owned Tru-Juice has been asked to assist in purchasing this year's orange crop from small farmers.

"I am not prepared to give additional funds when you already owe millions," an adamant Tufton said. "Once I saw a solution it was easy to take that decision".

Fresh oranges being sorted for processing at the Tru-Juice factory owned by Trade Winds. (Photo: Lionel Rookwood)

The CGA is an independent co-operative, formed over 60 years ago and administered by local citrus growers.
The minister holds the position that the CGA would have to be restructured to allow greater transparency and accountability before receiving any further government assistance.

He charged that while the association had little funds on hand, stock levels of orange concentrate were also low.
Against that background, an audit would have to be done before any additional funds can be given to the association, he said.

"The challenge is to pull back the organisation from the brink of bankruptcy," he said.

Insisting that the CGA is no burden on taxpayers, recently-appointed CGA chairman John Thompson said that since taking office in March he has sought to have meetings with Tufton without success.

"We will honour our debt to the Government," Thompson emphasised, claiming that the association was far from being insolvent.

"Our liabilities have not exceeded our assets. We are not insolvent," said Thompson.

"The crux of the problem is that we have not had any dialogue," he argued, adding that the agriculture minister was misinformed about the quantity of concentrate that the factory had in storage.

The Business Observer was unable to contact Paul Miller, who headed the CGA until February this year, and under whose watch the debts would have been incurred.

Also in February, Tufton ordered a management audit of the CGA. However, that audit is yet to be complete. "I am hoping that within another month or two we will have a report and we will proceed from there," Tufton said, adding that in the interest of citrus farmers, alternative plans were made.

He told the Business Observer that instead of pumping more funds into the CGA, an agreement has been brokered with Trade Winds Limited for the purchase of oranges from farmers. Trade Winds processes and markets juices under the brand Tru-Juice.

"We have worked out an arrangement to ensure that citrus farmers do not lose their stock," said Tufton. "The most important thing to me is that there are options for the farmers."

However, while Tufton has placed his confidence in a Trade Winds bail-out of citrus farmers, uncertainty is rife among farmers about the number of oranges that will be purchased by the McConnell outfit.

Some argue that the company is unable to take the complete orange crop, as would the CGA.

"The minister told us that an arrangement has been made with Trade Winds to take off the entire citrus crop, but when we spoke to Mr McConnell he said he knew nothing of that arrangement," farmer Charles Gilpin Hudson told the Business Observer.

"They are buying to supply their factory. They buy more than they grow, that is always the case," he added.
Citrus grower Ken Newman also warned that the CGA processing plant would face closure if an adequate number of oranges was not delivered to the factory this season.

"There is no guarantee that Trade Winds will take all the fruit, but even so, the fact is that we (Juiciful factory) would not have any raw material to produce orange juice throughout the year," he said.

And according to Thompson, if an arrangement exists with Trade Winds it has excluded the majority of small citrus farmers.

"Trade Winds is not equipped to purchase fruit from the numerous small citrus farmers spread across the island," he argued. "They will take a large load from one supplier, but do not deal in multiples of smaller amounts."

Peter McConnell, head of Trade Winds, has, however, strongly refuted arguments put forward by the CGA chairman.
"I challenge any farmer to say that they have not been able to dispose of their crop," McConnell told the Business Observer.
"Tell them to call me and I will buy their fruit," he declared, adding that he only rejected fruit if the quality was poor. "I do not restrict anybody on volume," said McConnell. "I buy from everybody."

He explained that this year's orange crop was smaller than the previous year when his company bought 150,000 boxes from small farmers to supplement their juice production. "This year the yield is far less and we are prepared to take more fruit," said McConnell. "Based on the size of the crop and the needs of the local market I see no difficulty in purchasing."

He added that his plant would cease processing oranges by May 9 as the factory was not getting fruit consistently enough to continue.

In the meantime, the CGA factory has collected a mere 74,000 boxes with none of those farmers making deliveries being paid.

"This season the factory has so far collected 74,000 boxes," Thompson said. "Normally by this time (of year) we would have collected more than 100,000 boxes.

According to Gilpin-Hudson, the CGA factory, which has the capacity to process two million boxes of fruit per year, last year processed only 250,000 boxes.

"The plant needs at least 250,000 boxes to be viable," he said.

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