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Dairy farmers to sue firm over payment

by Lesotho Times
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MASERU — The Lesotho Dairy Products (LDP) is allegedly in financial doldrums which has seen it fail to pay dairy farmers over the past two years.
The LDP, a public company which sells Maluti Maid fresh and sour milk, is said to be so broke that local dairy farmers fear it might never be able to pay them.
The farmers have threatened to take the firm to court if it fails to pay their dues, the Lesotho Times has learnt.
The farmers’ legal representative, Tankiso Hlaoli, has written to the LDP informing them of his intention to file an application for sequestration in the High Court if the firm fails to pay his clients.
Efforts to get comment from LDP officials last night failed.
But in an interview with the Lesotho Times yesterday the farmers said they will meet in Maseru tomorrow to plan how they are going to claim their share in the milk industry, which they allege is dominated by foreign businesses.
The letter of demand comes barely two weeks after several dairy farmers’ associations marched to the Lesotho National Dairy Board (LNDB), LDP offices and the Ministry of Agriculture in protest over non-payment.
The LDP, which was established by the Lesotho government with the help of the Canadian International Development Agency (CIDA) in 1987, buys milk from farmers and processes it for distribution to local shops.
The LDP buys on credit and signs cheques for farmers after it has sold the milk and collected money from the shops.
The farmers however complain that the company has for the last two years failed to pay them.
Some of the farmers said they were now contemplating selling their dairy cows and quitting the industry altogether.
Lepolesa Chabeli, a Maseru dairy farmer with 55 cows, told the Lesotho Times yesterday that he had so far sold 15 of his milk cows because his business was suffering massive losses.
“I have no alternative but to sell my cows before it is too late or else I will end up giving them up almost for free,” Chabeli said.
“I bought one dairy cow for M16 500 but I sold most of my cows for less than M10 000,” he said.
“In this industry you do not need to spend even a brief time without money coming in, you will fall down flat.”
The chairman of the Matsibolo Dairy Farmers Association (MDFA), Thabang Buti, said he too was planning to sell his cows.
“I have wronged my family by spending my retirement package on dairy cows,” Buti said.
“I could have ventured into another business had I known that buying dairy cows is tantamount to throwing one’s money into a bottomless hole.”
“Our future in this industry is blurred,” Buti said.
The farmers said they were now supplying milk directly to the public bypassing the LDP, which according to the law is illegal.
The Dairy Farmers Forum secretary general, Tšeliso Tšenoli, said all farmers should take milk to a licenced processor before it can reach the market.
“The purpose is to make sure that the milk is safe before it can be consumed by the public,” Tšenoli said.
“We are running the risk of selling to the public milk that might be rejected at the processor,” he said.
Dairy farmers have since 2005 been fighting against the Lesotho National Dairy Board and the LDP over what they say is “corruption beyond belief”.
Earlier this year dairy farmers wrote to the cabinet asking it to intervene in the dispute against the LNDB.
The late agriculture minister, Rakoro Phororo, was also accused of turning a blind eye to the dairy farmers’ complaints against the LNDB.
The LNDB was established by the Ministry of Agriculture in 1991 to prescribe standards of production, storage, packaging, processing and distribution of dairy products.
The board is also vested with powers to issue permits to companies that produce, process and distribute dairy products.
For the past two decades dairy farmers and the LNDB have been at each other’s throat over what the farmers called “corruption beyond belief” between the LNDB members and the LDP.
The LNDB, in a clear case of conflict of interest, was found to be a shareholder in the LDP.
The LDP is a company which is supposed to get a permit from the LNDB to process milk.
The farmers complained that the LNDB was hindering some of them from entering the milk processing business because they would be potential competitors to the LDP.
Dairy farmers’ associations have on several times complained to the government that the LNDB and LDP were working together to open business opportunities to foreign companies to process milk while ignoring pleas from locals to have their share of the cake.
Farmers also complained that the LNDB was deliberately causing their businesses to fail so that more milk and other dairy products could be imported into Lesotho because it collects a five percent levy from the imports.
The LNDB is also accused of lowering the price of milk to below production costs to boost the quantity of milk that is imported into the country.
The farmers, led by the Matsibolo Dairy Farmers Association, had also petitioned former trade minister, Popane Lebesa, to intervene after a forensic audit firm, Gobodo Forensic, said the LNDB management was not cooperating in its investigations.
The Gobodo Forensic report, released in February last year, revealed that the LNDB and the LDP were mismanaged.
Investigators say they had been unable to access some crucial documents that would show how the two bodies were managed because their leaders barred them from accessing them.
For example, they say they were not privy to the accounting records of the LNDB because the management “refused to grant us access to such documentation”.
The investigators say they did not have accounting records “supporting any income and expenditure. We also did not obtain access to the LNDB’s bank statements”.

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