MASERU - The tabulation of the agricultural marketing wool and mohair license amendment regulations of 2018 tabled by Minister of Small Businesses, Chalane Phori, has caused chaos in Parliament, while throwing wool and mohair growers in a quandary over who to trust. The tabulation came a day after the Minister of Agriculture, Mahala Molapo, had withdrawn an earlier summary introduced in May which some growers and operators had contested.
Chagrined growers took the ministry to court demanding revision of the tabulation claiming it was discriminatory and favoured foreign businesses over local producers and wool and mohair traders. The withdrawn regulations spelt out the new modus operandi of the marketing of wool and mohair, a sector which many felt had immense potential to boost the national economy, but has been left in the hands of foreign middlemen for decades.
Under that regulations, it is illegal for anyone to engage in the business of wool and mohair: shearing shed; brokering; testing; trading and auctioning; processing; and exporting “unless the person has obtained a license to do so from the Minister responsible”. The regulations cobbled by the Minister of Agriculture which came into effect on May 4, 2018 also note the license is not transferable.
“The minister may amend, suspend or cancel the license in the event that an operation closes its business, or the license is not used appropriately or is used in fraudulent activities, or the holder allows another party to use the license,” the regulation reads. Since the regulations kicked in, the decades old practice of auctioning local wool and mohair in South Africa ceased, causing a commotion, especially amongst those directly involved in the trade.
Locals felt their businesses were being sent into bankruptcy, especially as issuing of export permits had been suspended. They also felt the law was creating a new monopoly where the Chinese owner of the Lesotho Wool Centre was now the government’s anointed sole buyer of local wool and mohair. According to Motlalentoa Letsosa, an opposition member of parliament from Qalabane constituency, on 12 July, the high court decided that the regulation should not be implemented and wool and mohair be released to owners so they can enjoy the fruits of their labour.
He, however, said Phori took parliamentarians by surprise by tabling a set of regulations identical to the one Molapo had withdrawn, with minor changes to names while growers’ grievances ignored. “The regulation is the same as the last one, the only different thing is the names of people tabling it,” Letsosa said. Letsosa, added, the minister skirted the disallowance made against the regulation by introducing an identical tabulation as a fall-back on option in case the high court rules against the contentious first one.
“Wool and mohair marketing falls under small business but has not been lawfully transferred from the ministry of agriculture since the new ministry was formed thus causing confusion as to who has the right to table the agricultural marketing of wool and mohair licence regulation. “According to agricultural marketing law of 1957, the minister of agriculture is the one with the right to table the regulation not the minister of small business, until the transfer has been made, which is an important move that needs to be taken,” Letsosa added.
Phori agrees that the regulation he tabled is almost the same as the first one, but adds it has new clauses that were absent from the first one. He notes that for instance, the present regulations specify the amount of commission a broker will get for selling wool and mohair – four percent. “It also notes that the person who has a safe place for storing wool and mohair should apply for a licence for the place to be reviewed before use,” he said.
According to Phori, the regulations also stipulate that licences for scouring, processing, trading and auctioning of wool and mohair are reserved for Basotho, adding that farmers are given the right to decide how much brokers should deduct from their earnings. These clear but tight measures, come hard on the heels of a number of concerns by the authorities, said Phori, calling on all stakeholders to depoliticise the wool and mohair sector, if the country is to meet some of its targets in wealth creation, job creation and sustainable economic growth and development.
“I am not an expert but those who have conducted studies have found out that a lot of benefits can be drawn from this neglected sector,” Phori said, while warning a lot of chicanery goes on during wool and mohair deals.He said studies have shown that at full operation and capacity Lesotho’s wool and mohair sector can create up to 2000 sustainable jobs with more jobs from subsidiary operations as well as the supply chain.
Phori disclosed a few weeks before the tabulation of the first regulation that the government was geared towards growing and harnessing this lucrative but largely neglected sector. “Right now we have gazetted the regulation of mandatory wool and mohair processing in Lesotho and I can almost certainly say there are 50 jobs assured once operations resume at the Lesotho Wool Centre,” he said.
According to Phori, for the more than 44 years that Basotho wool and mohair farmers have been represented by middleman, the country has lost millions of Maloti to unscrupulous traders. “We are here talking of huge sums of money. I have learnt that of the M800 million that Lesotho producers make, only M300 to M400 is actually accounted for in Lesotho and the rest is lost to South Africa,” he said.
He added that over the years, Basotho farmers have been charged taxes on their trade returns but the agents in the trade have not remitted a single penny to the country. Phori says these discrepancies have to be followed up to bring justice to Basotho. “What the government of Lesotho wants is to see the sector open and trade deals transparent. We are aware there are people who have been benefiting personally from these deals and we need to get rid of that and make sure that each and every participating farmer gets their fair benefits.
“There has also been a lot of resistance in the introduction and implementation of the new regulations, but we will get to the bottom of this matter,” Phori said. He added his ministry was adamant of ensuring indigenous Basotho businesses process local wool and mohair to suit market demands, instead of just sending raw products to the market.
Lesotho, still smarting from the depletion of SACU revenues, is stepping up efforts to plug leakages in the economy. Earlier this year, Finance Minister Dr Moeketsi Majoro, while presenting the budget estimates for the current fiscal year, bemoaned dwindling national revenues, urging Basotho to tighten their belts.
Nako Tšoanamatsie, a concerned wool and mohair grower, while raising market concerns, lauds the idea of setting up a wool and mohair scouring plant in the country where the produce will be processed before export. But, he warns, this does not warrant a feasible scouring venture given the sheer size of the country, the communal grazing space, sheep and goat numbers, and the wool and mohair they produce, both quantitatively and qualitatively.Default Basic Success warning Info Danger Primary