Farmers’ debt costs wool broker licence
THE Ministry of Small Business Development, Cooperatives and Marketing this week suspended Maseru Dawning’s operating licence for the broker’s failure to pay wool farmers for auctioned fabric as far back as the 2018/19 shearing season.
The suspension will facilitate an investigation into why the company has failed to pay farmers.
Principal secretary in the ministry, Tankiso Phapano, told the media this week that the broker had failed to address the payment delays despite getting ample time to do so. Some farmers remain unpaid for fabric delivered in the 2018/19 and 2019/20 seasons.
He however, said the ministry did not have records to determine how many farmers are still owed by Maseru Dawning.
The ministry decided to suspend the operating licence to ensure that such delays are avoided in the future.
Maseru Dawning operates Lesotho Wool Centre and has been at loggerheads with farmers complaining that they were getting less than what they used to get when they sold their fabric outside the country until 2018.
The broker began operating on the back of the government’s decision to localise wool and mohair trading in 2018. The move was meant to improve the farmers’ earnings while generating taxes for the government.
However, the farmers have bitterly contested the decision saying they were never consulted prior to its implementation.
Through the farmers’ protests and lobbying, parliament late last year passed the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulation 2019 No 68 in the national assembly.
The amended regulations allow farmers to export their produce- a right they had been deprived of when the 2018 regulations were enacted.
And Mr Phapano this week said they decided to suspend the company’s licence after several unfruitful meetings with the broker and the farmers’ representative.
“We have suspended the license of Maseru Dawning Trading with immediate effect,” Mr Phapano said.
“The broker is expected to stop operations until the matter has been resolved. This decision was made following unsuccessful talks by the ministry with Maseru Dawning, their banker and farmers representatives.”
Contacted for comment Maseru Dawning general manager Stone Shi acknowledged owing the farmers but said he was surprised by the government’s move.
“This is a big shock to me because I did not see it coming. I expect a decision of this magnitude to be preceded by a hearing,” Mr Shi said.
He accused some unnamed farmers of falsely claiming to be owed money just so that his image can be tarnished.
Instead, he believes some farmers have been paid more than what they deserved.
Mr Stone also questioned the government’s decision to suspend Maseru Dawning’s licence only leaving other brokers who are owing farmers.
Meanwhile, the Ministry of Small Business Development, Cooperatives and Marketing has introduced a new system of issuing wool and mohair export permits.
The new system was communicated to ministry officials through an internal memo dated 12 October 2020.
Mr Phapano said the export permit will no longer be issued at district level but would now be approved by the director of marketing department at the ministry’s headquarters in Maseru.
The process is not meant to frustrate farmers but to enable the ministry’s head office to improve its record of the statistics of wool and mohair, he said.
“To improve the monitoring of the wool and mohair subsector, and empower wool and mohair farmers’ participation in decision making on their wool/mohair marketing the following decisions were made;
- The ministry district marketing officers should work together with Ministry of Agriculture and Food Security officers to assist farmers marketing groups (MGs) to establish their own committee who will run the affairs of the MGs and also facilitate capacity building programs for MGs.
- The marketing officers should facilitate issuance of wool and mohair permits with the following attachments;
- MGs, cooperatives, sheds farmers associations and Association (LNWMGA or Skylight) committee members list and contacts details (cellphone, etc)
- MGs, cooperatives, sheds farmers associations and Association (LNWMGA or Skylight) bank details in which deductions, contributions, etc will be deposited.
- Confirmation from the MGs, cooperatives, sheds farmers associations and the association (LNWMGA or Skylight) on decision where they want to take their wool or mohair.
- Consignment(s) documentation on wool or mohair being exported.
- The wool or mohair export permit after preparation of all documents above shall be signed by the director of marketing or marketing managers,” part of the memo reads.