MASERU – The government, through Ministry of Small Business Development, Cooperatives and Marketing along with the Ministry of Agriculture and Food Security, this week managed to pay 114 farmers out of the 2 710 that are owed payments for their wool and mohair dating back to 2018.
The 2 710 farmers are owed about M10 million of which only about M550 000 has been paid. This has been revealed by Deputy minister of agriculture and food security, Likopo Mahase, announced the payment to the media noting that commercial banks are currently processing payment for 749 farmers who have active bank accounts, while the remaining 1 951 farmers without bank accounts and those that submitted wrong account numbers will be paid in cash by the Lesotho Post Bank.
Mahase said Standard Lesotho Bank is currently processing payment for 633 farmers amounting to around M3 million while the First National Bank is processing payment for two farmers amounting to M7 631. He said Lesotho Post Bank has confirmed payments for the remaining 1 951 farmers that will be done over the counter will be made as soon as list of beneficiaries have been verified.
Mahase further noted that apart from the M10 million that Ministry of Small Business Development, Cooperatives and Marketing requested to pay farmers, the ministry requested an additional M2 million as contingency for incidental cases of farmers that may have been excluded during stock sheets compilation at the shearing sheds.
The payments had to be made after wool broker Maseru Dawning, owned by Chinese businessman Stone Shi failed to pay farmers for fabric surrendered as far back as 2018. In 2018, the government introduced the Agricultural Marketing (wool and mohair) (Licensing) Regulations 2018 prohibiting the sale of the fabric out of the country. According to the regulations, farmers were forced to sell their fabric in the country and Shi was then the only authorised broker and farmers took their fabric to him.
Shi failed to pay farmers due to alleged squabbles between him and Standard Lesotho Bank. Shi said reconciliation for Qacha’s Nek farmers was the biggest challenge he was faced with, explaining it as the most ‘complicated and messed up’ reconciliation he received from Standard Bank. He alleged he has been appealing to Standard Lesotho Bank to correct and make reconciliations clear but his pleas fell on deaf ears.
Last year he even considered taking legal action against Lesotho Standard Bank for unwarranted service charges and double payments it made to farmers. Shi cited these as the reasons for his failure to pay all farmers.
After Shi failed to pay farmers, his brokering license was suspended in October 2020 by the Ministry of Small Business Development, Cooperatives and Marketing, on condition the suspension would be lifted once he has fully paid all farmers.
In December 2020, Shi’s communications advisor, Keketso Lawrence, told Public Eye that Shi had sourced some money and before Christmas farmers from 2018/2019 would be paid, while the rest would be fully paid by the end of January 2021.
Lawrence, however, at that time said they were still waiting for Standard Lesotho Bank to resolve the reconciliation issues adding Shi had sourced over M2 million elsewhere to pay farmers for their 2018/2019 fabric.
That payment never materialised. Shi’s Maseru Dawning (PTY) LTD went into a joint venture with Basotho Wool and Mohair Farmers to establish the Thaba Bosiu-based Lesotho Wool Centre. In trying to resolve the issue between the banks and Shi, the National Assembly adopted the ad hoc committee’s recommendations on wool and mohair, in particular to pay farmers whose payments were outstanding.
The ad hoc committee was established to investigate marketing of wool and mohair inside and outside the country. Mahase at a press conference noted that Shi had signed a legal document acknowledging that he owes farmers and that he will pay the government back. He said Shi’s brokering license has expired and have not yet been renewed.