SOUTH African wool and mohair broker, BKB has begged the Senate to repeal the Agricultural Marketing (Wool and Mohair Licensing) Regulations 2018 to allow producers to sell their fabric to a broker of their choice.
BKB’s wool and mohair general manager Isak Staats this week told the Senate’s legislation committee that Lesotho needs to allow farmers to export their fabric to ensure that their families do not become desperate due to delayed payments.
The Senate had invited BKB to comment on the new Agricultural Marketing (Wool and Mohair) Regulations of 2018 gazetted by the minister of Agriculture and food security, Mahala Molapo.
Agricultural Marketing (Wool and Mohair Licensing) Regulations 2018 were gazetted by the Minister of Agriculture and Food Security, Mr Molapo, last September. The regulations state that no one will be allowed to trade in wool and mohair without a licence from the Ministry of Small Business, Cooperatives and Marketing. They also stipulate that all the transactions should be done from Lesotho.
For the past 44 years, Basotho farmers had been selling their fabric in South Africa through brokers BKB until the promulgation of the Wool and Mohair Regulations of 2018.
The controversial regulations have been bitterly opposed by many local farmers who feel that they not only deprive them of higher earnings in South Africa but also that they were enacted to benefit Chinese businessman, Stone Shi.
The fabric is now auctioned locally by the Lesotho Wool Centre (LWC), a joint venture between the Lesotho National Wool and Mohair Growers Association (LNWMGA) and Mr Shi’s Maseru Dawning Trading Company.
The LNWMGA holds 75 percent shares while Maseru Dawning holds the remaining 25 percent in the LWC.
The LWC recently told the Lesotho Times that the centre has paid less than 2 000 farmers out of about 13 000 who have sold their fabric through its facilities. However, the farmers have lamented that the delays have cause them untold suffering as they are failing to provide for their families due to lack of resources.
And Mr Staats told the Senate committee this week that given the dire hunger situation that many farmers are facing as they wait for their money, any broker, other than BKB, can even be engaged to quickly sell the remaining wool just to give farmers relief.
He said payment delays have forced some farmers to slaughter their livestock for food and the production of the wool and mohair sector will eventually take a significant knock.
“You have got to get the wool out of the country as soon as possible, and I do not care if it is done through BKB or anybody else,” Mr Staats said.
“This is because you have got a real problem that is called hunger in this country. I cannot emphasise this point enough but you have a situation where farmers are sitting at home with no food and being forced to feed on their livestock due to hunger.”
Mr Staats further said that the delay in selling the Lesotho wool and mohair could dent the country’s reputation in the global market, which could be lost forever.
Mr Staats’ sentiments were echoed by LNWMGA representatives who were also present at the meeting.
LNWMGA president Mokuenihi Thinyane said it is important for farmers to be allowed to choose a broker of their choice. He said by so doing, they would be able to maximise the returns on the sale of their fabric.
“We would advise that farmers be allowed to sell their wool in the open international market as opposed to the black market in which the fabric is currently being sold,” Mr Thinyane said.
Mr Staats also accused the government of being hostile towards BKB and said this has blocked the company from setting up facilities locally.
“The government wants us to first set up infrastructure before it can give us a licence to operate here. So, it will not be possible to come under these circumstances.”
He also refuted allegations that BKB owes the government in excess of M1.4 billion as claimed by the Minister of Small Business, Cooperatives and Marketing, Chalane Phori, last June.
Mr Phori said this during public gatherings for wool and mohair farmers in Thaba-Tseka. The gatherings were part of countrywide tours that Mr Phori held along with his ministerial colleagues, Tefo Mapesela (Trade and Industry), Mahala Molapo (Agriculture and Food Security), Tlohelang Aumane (Development Planning) and Machesetsa Mofomobe (Deputy Minister of Home Affairs).
The ministers were on a mission to explain to farmers the rationale behind the new Agricultural Marketing (Wool and Mohair Licensing) Regulations of 2018 which were recently tabled before parliament.
“As far as we are concerned, we have been operating within the tax laws of both Lesotho and South Africa. We have attached reports from three independent consultants confirming as on the submitted documents to the Committee,” Mr Staats said.