Wool and mohair farmers reject government’s payment offer

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Staff Writer

WOOL and mohair farmers have rejected the government’s offer to pay off the debt that the Lesotho Wool Centre (LWC) owes to about 1 000 farmers.

The farmers say the gesture is proof that the government was working in cahoots with the beleaguered Maseru Dawning, a company owned by Chinese businessman Stone Shi and also runs the LWC.

Presenting the national budget in parliament yesterday, Finance minister Moeketsi Majoro said the government would start paying the farmers for their unpaid for wool starting today.

“Mr, Speaker, I am pleased to announce that the government on 18 February 2020 decided to take responsibility to pay about 1 000 farmers that Maseru Dawning had failed to pay on time,” Dr Majoro said.

“Payment of farmers will begin tomorrow, (today),” the minister added.

However, the Lesotho National Wool and Mohair Growers Association (LNWMGA) has hit back, saying the announcement came a little too late when the industry was in total paralysis as a result of the government and LWC’s meddling.

Prominent Mokhotlong farmer, Khotsang Moshoeshoe, who is also the LNWMGA spokesperson, described the offer as “absurd”. He told the Lesotho Times yesterday that the farmers’ association had rejected the offer outrightly as the money was now coming from the taxpayers instead of the LWC. He also predicted that the payouts would eventually be lower than market rates if the funds are paid by the government.

“Thanks, but no thanks,” Mr Moshoeshoe said.

“We have been telling the government from the beginning that this arrangement of forcing our farmers to sell their wool through LWC would not work… The farmers are unhappy with the offer because the money that the government is going to pay us is not coming from the open market where wool and mohair is traded but from government coffers.

“Remember that the farmers who delivered their wool to LWC got below market prices for their goods and some got nothing at all.  Now the government wants to pay what the farmers are owed by a private company without trying to find out what the current market for wool and mohair is; I find this very disturbing. The LNWMGA and all farmers who had delivered their wool and mohair to Mr Shi reject the government’s offer outrightly,” he added.

He said the association would convene a meeting with its members soon to chat the way forward.

Adding to the farmers’ sentiments, economist Arthur Majara said the government was acting in bad faith by bailing out LWC. He said the government’s move was “unbelievable and mind-boggling”.

“Instead of taking the so-called Chinese investor to the cleaners for bankruptcy, they bail him out with public money. This is a smokescreen to hide the government’s and Small Business Development and Cooperatives minister’s (Chalane Phori) incompetence in undermining such a sensitive industry with political games. This is because the rural farmers, who are the industry’s core investors, represent the Democratic Congress (DC) voter stronghold which did not support the ruling All Basotho Congress (ABC) in the June 2017 polls, costing the party an outright win,” Mr Majara said.

Dr Majoro’s announcement comes amid pressure from wool and mohair farmers for payments having started delivering their wool and mohair fabric to LWC in 2018. However, some are yet to be paid.

The government introduced new wool and mohair regulations in 2018 regulations effectively banning farmers from selling their produce from outside the country but only through LWC. The farmers however, revolted against the regulations and an adhoc committee was eventually established to probe the issue.

The regulations were eventually amended resulting in the licensing of five wool and mohair brokers, among them the LWC and South African company, BKB.

However, many players in the industry have said Lesotho does not have the capacity to process and grade the product before it is sent for auction.

Dr Majoro on the other hand insists that localisation of the sale of wool and mohair in Lesotho to international markets had some positive outcomes.

“The first historic cycle, the 2018/19 season of wool and mohair localisation, has been completed. This noble action has not gone without challenges. It has been received with mixed reactions from the stakeholders, some of which called for some amendments to be made in the wool and mohair regulations to enable a smooth business environment in this sub-sector.

“About 49 000 wool and mohair farmers’ fibre was handled and auctioned, yielding M410 million, which represented half of the national clip. It is worth mentioning that the localisation of the sale of wool and mohair has resulted in generation of 110 permanent jobs,” Dr Majoro said.

 

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