Local wool dodges global economic crisis

 IRENE SEME

MASERU – Local wool and mohair producers have not been impacted gravely by the current global economic fallout from the ongoing war between Ukraine and Russia – which has thrown the world in the grip of an economic crisis. Beyond the suffering and humanitarian crisis from Russia’s invasion of Ukraine, the entire global economy has started to report negative effects of slow economic growth and faster inflation.

At a time when the African continent was gradually recovering from the pandemic, the crisis poses a fresh threat to that progress. Many countries in the region are particularly vulnerable to the war’s effects, specifically because of higher energy and food prices, reduced tourism, and potential difficulties to access international capital markets.

The conflict comes when most countries have minimal policy space to counter the shock. This is likely to intensify socio-economic pressures, public debt vulnerability, and scarring from the pandemic that was already confronting millions of households and businesses, according to International Monetary Fund.

The Lesotho National Wool and Mohair Growers Association (LNWGA) manager, ’Mamaria Mohale, told Public Eye this week that it can only be a calamity of the Covid-19 pandemic magnitude that has adverse impact on the economy – but that as of now the production of wool and mohair will not be impacted badly because selling prices will not likely be affected.

Speaking on the production of wool and mohair, Mohale highlighted that for the producers, the challenge has been the exportation of their produce due to Covid regulations during the pandemic.

Mohale noted that production in the financial year 2020/2021 was lower compared to 2021/2022 because of the Covid pandemic. However, she indicated that towards the end of the shearing season there was a better change as prices increased. She added that their market does well when the inflation rate of the dollar increases.

“We began to experience an increase in pricing in 2021/2022 as per kilogram of mohair cost M600 on average depending on the length and strength,” Mohale noted. These views follow a Wool and Mohair Promotion Project (WAMPP) organised event aimed at sharing current thinking and prospects for marketing cottage products and to provide a platform to showcase cottage industry products.

A cottage industry is a small-scale business that operates and produces from home and its production is enough to accommodate the needs of the family as the start-up capital doesn’t require much. WAMPP is designed to boost resilience to the adverse effects of climate change and economic shocks among poor rural people across the country.

It is active in all the 10 administrative districts of Lesotho, with a focus on rangelands that cover more than two thirds of the country’s surface. Their activities will target smallholder farmers and other poor rural dwellers, giving special attention to poor rural women and young people in the project area.

Speaking to Public Eye this week WAMPP director, Retšelisitsoe Khoalenyane, explained that the aim is to boost the ability of smallholder farmers to counter the effects of a change in climatic environment. He said the three outcomes of the project are: the need to ensure that the state of rangelands is improved; to ensure the quality of wool and mohair by directly improving the breeds themselves; and, to increase the income of farmers.

On capacity building, Khoalenyane said: “We are capacitating farmers and staff from respective government ministries and sister departments that we work with. Our efforts are geared towards ensuring that there is a sustained maintenance of project outcomes even beyond the WAMPP.”

He added: “WAMPP offers trainings to our farmers so that they improve their resilience against climate change and at the same time we aim at enhancing the quality of wool and mohair while making sure that we improve the state of the rangelands.”

Khoalenyane noted that the project has been extended by one year and the government of Lesotho has injected about M5.4 million set out to underpin activities to assist in the administration of the project.   International Fund for Agricultural Development (IFAD) programme manager, Ivonald Da Cruz, told Public Eye in a separate interview that despite the war disruption between Russia and Ukraine that has affected the world pricing, wool and mohair from Lesotho is not yet affected.

Cruz said the quality of mohair goes with the production, hence he noted: “What WAMPP is doing under the animal health breeding and livestock component is important in terms of producing the genetics of raw animal.

“But what is needed now is to move towards ensuring that the Lesotho wool and mohair is competitive and doesn’t become second class and that it is produced under responsible wool and mohair standards.”

He noted that what grades the quality standards of mohair are three pillars which are animal health, nutrition and breeding.

Cruz said: “A lot of buyers are looking for responsible and certified mohair production, so currently it’s doing very well and a lot of big brokers are happy but we need to ensure that Lesotho does not get left behind on this trend.”

“Mohair that falls under responsible mohair standards fetches higher prices so some farmers get 20 percent more from their mohair currently. Potentially, in the next five to 10 years what we will see if we don’t get to a stage where the mohair production is responsible and graded, labelled and certified, is Lesotho’s mohair fetching lower prices and potentially reaching a stage where brokers in the market do not value it as much,” Cruz asserted.

WAMPP was approved by IFAD in September 2014 and the financing agreement was signed with the Lesotho government in June 2015.

The project is financed by Lesotho for approximately US$4 million (about M60 million) and IFAD, with a loan and a debt sustainability framework grant with approximately US$11.6 million and a grant from the Adaptation for Smallholder Agriculture Programme, an IFAD programme with US$7 million, in-kind contribution from beneficiaries as well as co-financing in the following amounts US$1.5 from the Lesotho National Wool and Mohair Growers Association and US$12 million from OPEC Fund for International Development.

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