History of the Lesotho Dairy Industry
By Theko Tlebere
From the research Gobodo deduced that CIDA made significant contributions towards the improvement of dairy farming in Lesotho. In some respects the CIDA project initiatives that had already been started by donors such as the UNICEF and the FAO. The contributions that CIDA made were inter alia, the upgrading of the milk processing plant that had been donated by Unicef and FAO for its initial 1500 litres capacity to 10 000 litres, the introduction of MCCs in six(6) districts, the improvement of the dairy extension programme, and a proposal to establish Dairy Farmers' Associations (DFA) at district and national level, as well as the establishment of the Lesotho National Dairy Board.
According to the Gobodo report section 5.1.14 of it LNDB was established in 1991. And Mr. Montsi was appointed the first chief Executive Officer of the LNDB and currently still holds the position. The CEO is referred to in the regulations as the Executive Director. In April 1992 , in a report for the LNDB funded by the Lesotho Canada Dairy Development Project and titled ' The needs of Dairy Farmers - The farmer's perspective. A report on a survey of dairy farmers in seven lowland districts in Lesotho', by Sechaba Consultants(Gay & Green), it was found that of the 32 recorded dairy farmers associations, only a few were registered. Of the 293 respondents, 87% said they would be interested in a national dairy association. It is interesting to note that 91% of the respondents did not know what the LNDB did and were not sure how the LNDB would improve diary in Lesotho. the main role of the LNDB from the farmers' point of view, was that of a mediator between the farmers, the associations and the dairy plant.
According to a report by Dr. Phororo styled, 'Policy Framework and strategy for Dairy Industry', published in May 1993, other agencies including the German Deutsche Gesellschaft Fur Technische Zusammernarbiet (GTZ) and the international fund for Agricultural Development (IFAD) also made contributions to Lesotho's dairy industry, albeit that they were focusing more on area based projects. The GOL is also reported to have started initiatives of its own in seven lowland districts of the country. These included, but were not limited to, the dispatching of livestock assistants to Livestock Improvement Centres, that were established in each district. It is the understanding of the Gobodo report that Mr. Montsi oversaw the supervision of those livestock centres.
It is further unveiled by the Gobodo report that it was one of the objectives of CIDA to donate the moveable and immovable assets in the dairy project, in consultation with GOL, to dairy farmers in Lesotho. we also understood that CIDA had expressly wished that the donated assets be transferred and owned by dairy farmers. Gobodo has unfortunately not been able to secure the Deed of Donation of CIDA, which would have stipulated the terms of its donation, nor have they been able to make contact with the then CIDA manage Mr. Ross Lister.
Against this background, in line with CIDA's wish to donate the project assets to farmers , CIDA apparently agreed with gol to establish a legal entity to which the donation would be made on behalf of the farmers. It was also noted that an extract of a Cabinet memorandum dated 19March 1987 , titled 'Establishment of the Lesotho Dairy Products Co-Operative'. The memorandum, inter alia, referred to the establishment of a commercially operated company under the name of 'Lesotho Dairy Products'. It also stated that the said company will in due course be transformed from a private to a public company. It further stated that the civil servant staff component of the Dairy project will be transferred to a new company. In terms of the said document, the Gol undertook to "make available the assets of the CIDA supported Dairy Project to the Company on terms to be agreed to with the company on the understanding that government will approve disposal of the assets".
On or about 8 May 1987, a legal entity known as the Lesotho Dairy Products (Pty)Ltd was incorporated as a company with limited liability and with a share capital of 4 000 shares , as appears from its memorandum and articles of incorporation. According to a report prepared by Cole, Thelejane & Wakiro for the LNDB in January 1994 and titled 'The distribution system for fresh milk and mafi in Lesotho', producer and wholesale prices for milk are set by the LNDB with the approval of the marketing Division of the Ministry of Agriculture and Food Security(MAFS). Denmar took over all distributions and marketing of the LDP products from June 1992 on a commission basis. After 15 months of operation of this contract, distribution problems still persisted. The Denmar contract makes provision that Denmar is paid a fixed margin of 20% of the wholesale price of the LDP products, for the distribution of the products. This margin is expected to cover all Denmar operational costs and profits. LDP is provided with documentation to justify the sales figures. Denmar deducts its margin of 20% from the whole sale price of Maluti Maid product sold in Lesotho, but not from exported milk.
The Lesotho Dairy Products (LDP) is currently the only milk processing plant in Lesotho an is as such a crucial (critical component) of the dairy industry in Lesotho.