Inspection Into The Fibre Industry

 

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Khotsang Moshoeshoe reading the petition to the Clark of Parliament Adv. Fine Maema (in black suit),
holding the microphone is Tjonane Matla, and on the far left Rantelali Shea. The trio were appointed to assist the
National Committee of LNWMGA on advisory note on the crisis caused by the new regulations, picture
was taken on the 28th June 2019.

 

‘Makarabo Matšumunyane

Following the Court of Appeal case that the Lesotho National Wool and Mohair Growers Association (LNWMGA) lost to the Government to abolish Legal Notice No. 65 of 2018 in June 2019, LNWMGA wrote a petition to the Speaker of the National Assembly Hon. Sephiri Motanyane following Motion 113, of Monday the 10th of June 2019, where Hon. Mothetjoa Metsing moved a motion to establish an ad hoc committee on the wool and mohair industry. In the letter LNWMGA also humbly requested the abolishing of the Regulation and also stated that they had gotten permission from the Lesotho Mounted Police Service for a protest to Parliament to make their grievances known.

The petition also outlined the problems that farmers are facing under the new Regulation, which included that most of the mohair growers never got a cent from their last year’s mohair clip. Moreover, it was stated in the petition that the situation on the ground is very disturbing where some of the farmers have died from heart attack, depression, stroke etc..

Furthermore, it was requested that the speedy establishment of the ad hoc committee should go concurrently with suspension of the Regulations so as to allow farmers to send their fibre to The Exchange in Port Elizabeth for the auction that was to be on the 13th of August 2019. Prime Minister Thabane announced few days before the march that the Government would suspend the Regulation for three months so that farmers could sell wherever they pleased while the Government comes up with solutions to the problems facing the industry and the ad hoc committee still investigates. Notwithstanding, the protest continued regardless of Thabane’s casual endeavor to mollify farmers by announcing a three months grace period to allow them to sell their produce through brokers of their choice.

As that was not enough, the social media through farmers’ forums revealed the truth about wool that was classified lox and reported to have been sold and Moremoholo Wool Growers paid. In that WhatsApp clip that circulated amongst wool growers, there was evidence that all fibre at Thaba-Bosiu Wool Centre had not been sold contrary to the Lesotho Government and Thaba-Bosiu Wool Centre reports. The Silo then followed the clip through reliable sources and it was confirmed that at that time, Moremoholo Wool Shed that was reported to have been sold was still stuck in the warehouse at Thaba-Bosiu Wool Centre.

 

The question then arose, in what criteria did Thaba-Bosiu Wool Centre take in processing of Moremoholo wool bales when they are still spotted in Thaba Bosiu, and clearly not sold? A small-stock farmer who opted to remain anonymous revealed his shock when he got to Thaba-Bosiu only to discover Moremoholo lox bales still packed in the Thaba-Bosiu warehouse. This anonymous farmer then took pictures of the bales and posted in the small-stock farmers WhatsApp group. It was at that juncture that some of Moremoholo wool growers could not identify their bales through the shed code and written shed name. In the past years, money earned from the sales of the lox was normally used to maintain and develop shearing sheds and to pay workers hired by (LNWMGA) to work at the shearing sheds.

 

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The presence of bales of wool that are unsold most probably means that there is no money at the current time that will be used to maintain and develop shearing sheds and to even pay workers there.  We stated in some of our past articles that many people working at shearing sheds have already lost their jobs. Over and above, reports show that not all farmers have been paid, some got little income whereas other farmers have got nothing at all, not even a cent. Another farmer from Butha-Buthe said according to a bank notification he received, he was supposed to get M5, 000.00 from Thaba-Bosiu Wool Centre, only to get to the bank and find that no money was deposited into his account. When the Chairman of Butha-Buthe followed it up at Thaba-Bosiu, the centre stood its ground that it paid the farmer. Another incidence was recorded in Semonkong Post Bank, where Salamane Hoko went with one of the local farmers who was paid only M 10,000.00 instead of M 50,000.00. The Silo was present at Lesotho Post Bank branch at Semonkong when the farmer made an inquiry.

 

It is a truth that cannot be ignored that some people are literally dying of heart attacks while on the other hand, our leaders in Government still defend this new and chaotic system which has proven to be utterly defective and not prospering as vividly revealed in the impoverished lives of our hard-working people since the Regulation was effective.

It is now clear that the three months grace period that was proclaimed just before the protest was only to calm down farmers because it has been over a month now without opening borders for the people to export their produce. Farmers had already discredited this act saying they believed it was not for their benefit due to the fact that there was currently no wool to dispose of as the shearing season will only begin this month (August) and end in December when the period would have expired. They further said this was a pretension only to allow Lesotho Wool Centre to get rid of the mohair which was not wanted by the Wool Centre.

However, the Government had announced issuance of licenses to five more broking companies including BKB and CMW as to strengthen the competition and do away with the Chinese monopoly. Will this bring growth to the industry or not? There still seems to be a hanging unattended dilemma of how unpaid farmers will get their remaining income. Furthermore according to the buyers down in Port Elizabeth it is impractical to sell Lesotho fibre in Lesotho, regardless of giving multiple licenses to the brokers.

As for BKB and CMW, they had clearly told the Parliamentary Ad-hoc Committee during their investigation visit in Port Elizabeth that the cost of handling one bale in Lesotho would be higher than handling one bale in Port Elizabeth due to the economies of scale. BKB Wool and Mohair Manager Seelan Pillay said that Lesotho wool occupies 10% of their floor space therefore its handling costs are absorbed together with the South African wool.

On the other hand the South African Wool and Mohair Buyers Association (SAWAMBA) told the ad-hoc committee that since the regulations were introduced and no fibre went into the BKB stores and that resulted into BKB increasing the cost of handling the South African wool per bale by 15% as when absorbing the costs of handling the South African bale, without the Lesotho clip made it more expensive to handle such a bale.

This is a simple economies of scale cost accounting exercise where variable cost are spread over the fixed costs to determine cost per unit. 

 

 

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Different international media reports pronounced the

fifteen thousand small-stock protestors having filed a record

of mother of all protest marches in Lesotho’s history

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