Wool Centre owes wool farmers M160m
MASERU – Thaba-Bosiu Wool Centre owes wool and mohair farmers over M160 million but the ministry of small business development yesterday allayed growing fears the agent was broke, saying the situation was under control.
“All taken care of,” Lerata Pekane, Principal Secretary (PS) in the ministry of small business development told Public Eye yesterday amid mounting pressure by the farmers for the government to take decisive action against the centre.
Pekane said he was happy with how the wool centre was conducting business at the moment, despite the controversy surrounding it.
He suggested that the controversy was manufactured against the ongoing project by government detractors to want to instil fear and distrust.
“This is an economic warfare and I am no longer bothered by critics’ malicious, unfounded comments. I am, however, very willing to engage with people who genuinely need to talk about this issue, not people who just want to cause a stir on social media,” he said.
In a statement on Wednesday, the ministry said the estimated number of wool and mohair farmers in the country is about 40,000 but only 13,000 took their wool and mohair to the Lesotho Wool Centre (LWC) at Thaba-Bosiu which held its first auction in November last year ending the decades-long practice of selling the commodities outside the country.
LWC is a joint venture between the Lesotho National Wool and Mohair Growers Association (LNWMGA) and Maseru Dawning established as part of the International Fund for Agricultural Development (IFAD) – supported Wool and Mohair Promotion Project.
The joint venture was established to increase farmers’ financial returns from the sales as they bypass the middleman.
Ministry of small business development also indicated on Wednesday that an average production is about 45,000 bales per year but only 18,554 bales were received by LWC, suggesting that other farmers decided to withhold theirs or probably sent it somewhere illegally.
Of the 18,554 bales received by LWC, “7,900 bales have already been sold for M183 million, average of M23,164.56 per bale,” the ministry further indicated.
It said M16 million has already been paid to some 1,740 farmers.
This means 11,260 farmers are still awaiting their payments.
But the ministry said M80 million “or so will be paid in the next week to two”.
“This money will be paid to some 10,000 or so farmers,” it added.
It said out of the 22 normal classes of wool received by the LWC, only 13 of those have been auctioned.
The ministry also claimed that “there were attempts to sabotage the new government policy by the forces that are against it but they failed”.
The statement read: “Did you know that it was reported that the size of the wool and mohair industry (direct sales, not including indirect spin offs) was about M450 million annually, but based on our numbers we can safely tell you it is M1.042 billion based on 45,000 bales at M23,164.56 per bale?
“Did you know that they call wool and mohair industry subsistence farming? What is subsistence about a M1 billion industry in a small country like Lesotho?”
Wool and mohair industry, and the LWC came under the spotlight last year when government unilaterally introduced new regulations designed to boost the local industry.
Under the new regulations, which came into effect in September, farmers are obliged to sell their produce at LWC only. Sales were previously conducted at Port Elizabeth in South Africa via wool brokerage BKB.
Local wool and mohair growers under the banner of the Lesotho National Wool and Mohair Growers Association (LNWMGA) opposed implementation of the regulations which they said were meant to favour an Australian-Chinese private businessman Stone Shi who manages the centre.
The farmers said the centre amounts to a monopoly.
Matters came to a head this month when furious farmers who had sent their produce to the centre last year blasted it for failing to pay them before end of 2018, as promised.
The farmers also accused the centre of not stipulating the total amount of money they were supposed to get for their produce.
Rumours started floating around on the internet that the cabinet subcommittee on wool and mohair, Stone Shi and the Chief Executive Officer of Standard Lesotho Bank Mpho Vumbukani had a meeting this week at which Stone Shi confessed that he did not have money to pay the farmers.
These allegations were denied by Pekane yesterday.
Standard Lesotho Bank did not respond to an email this paper sent while minister of small business development Chalane Phori’s phone rang unanswered.
The centre this week apologised to farmers for delaying their payments and pleaded for patience while it works to address teething challenges that have resulted in payment delays.
The Court of Appeal this month also dismissed a case in which the farmers were attempting to have the 2018 wool and mohair regulations nullified.
The matter was filed by Mohlalefi Moteane, Farmers Rock Wool and Mohair, Mahloenyeng Trading and Highland Wool and Mohair on January 18, after the High Court had dismissed their case last year.