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Feeding scheme flawed

by Lesotho Times

THE lead story we carried two weeks ago exposed serious problems in the government’s school feeding programme.

The scheme, started with noble intentions of feeding primary school children and empowering Lesotho’s poor communities through catering contracts, is now riddled with problems of monumental proportions.

What was supposed to be a lucrative business opportunity for the poor has become an impoverishing venture.

The caterers hired by the government to supply food to primary schools are either sinking in debt or they have already drowned.

Some are probably poorer than they were before they got the contracts. It is possible that some of them might fail to meet their contractual obligation to feed the children.

But it’s not hard to trace the root of this problem.

The problem, as the story exposed, is that the programme has been hijacked by cunning business people and companies that are manipulating the system’s weak structures.

This has happened because the government tried to empower people with lucrative contracts without providing them with the required capital.

The caterers were given contracts to supply food but without the start-up capital.

It boggles the mind how such a crucial aspect of any business venture could have been overlooked in the first place.

It costs money to buy beans, peas, maize-meal and oil that the caterers use to feed the children.

To meet their contractual obligations they have had to get loans from banks or go into a credit arrangement with supermarkets.

It has not been easy. The banks will not lend to them because they are too risky.

The conventional banking logic is that the poor are risky because they have no collateral (surety in the form of property or assets that banks can attach if they fail to pay back).

Shunned by mainstream banks the caterers have become easy prey for money lenders.

The money lenders who masquerade as genuine banks are ripping-off the customers with punitive interest rates.

There are reports that some of the institutions are charging interest rates as high as 75 percent.

Interest rates from normal banks are around 14 percent.

Food retailers and wholesalers have jumped on the bandwagon pretending to offer favourable credit terms to the caterers but in reality milking them with huge mark-ups on foodstuffs.

In this confusion is the chance for some shrewd businesspeople to act as middlemen.

In reality the caterer has become the conduit through which big businesses can make a killing from the school feeding programme.

On paper the poor hold the contract but in reality they are not benefiting from it.

They have been reduced to portieres.

Most of them say they have nothing but mounting debts and lawsuits to show for the years that they have been in business.

We understand the business logic of it all but we just cannot condone the exploitation of the poor by big businesses under the guise of helping them because it is immoral.

It is sad and shocking that this programme has been around for more than a decade but nothing has been done about these blatant acts of exploitation.

The government must realise that giving such contracts to the poor without providing the necessary capital defeats the whole concept of trying to empower them.

It is absurd to expect poor villagers who are already struggling to feed their families to get enough capital to feed dozens of school children the whole year.

It is time to go back to the drawing board before the whole programme collapses.

The government must realise that this is a programme which involves unique stakeholders.

The caterers cannot be treated like other government suppliers who are paid three months from the date of delivery.

Because of their nature they are living from hand to mouth and therefore cannot withstand 90-day debt on their cash-flow.

Unlike normal government suppliers that are big companies, these are poor individuals who are very vulnerable.

A day’s delay in payment is enough to put them out of business for good. 

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