…farmers association blames government and Chinese national
Thousands of families that depend on wool and mohair revenue are now said to be in dire need of food aid as a result of a government policy to localise the sale of their precious products through a Chinese national, Stone Shi.
This unfortunate development was revealed by the Lesotho National Wool and Mohair Growers Association (LNWMGA) chairperson, Mokoinihi Thinyane on Tuesday in his interview with a parliamentary ad-hoc committee investigating the buying and selling of the country’s wool and mohair.
Parliament late last month decided to establish the committee following an outcry by the wool and mohair farmers who accused the government of ruining them through a law that prohibited them from independently selling their produce in South Africa which they had always done profitably over decades.
The new law, which came into effect in August 2018, ensured the farmers sold the produce in Lesotho through a company owned by Shi, whom they now accuse of not giving them the lucrative returns and Chinese markets he had promised them.
Thinyane told the ad-hoc committee how their 40 000 members had their produce forcefully handed over to Shi by the Small Business, Cooperatives and Marketing ministry through an overnight-drawn amendment to a 1974 subordinate-law governing their business.
Among those now hard-hit by hunger are wool and mohair farmers such as Letsoara Rampeo from Thaba-Tseka district, Khutlo-se-Metsi area, who told the MNN Centre for Investigative Journalism he believes the Lesotho Wool Centre located in Thaba-Bosiu had defrauded farmers. The Centre is now buying the wool and mohair from the farmers for export by Shi.
“We have still not received our money for the sale of our mohair. We sheared our goats for nothing. In June 2018, I gave my mohair to the Lesotho Wool Centre located in Thaba-Bosiu with the expectation that by December, I would have received my money.
“My family is now hard-hit by hunger. I depended on this money for the clothing of my wife and children and the other basic needs of my family and extended family members too,” Rampeo on Tuesday told the MNN Centre for Investigative Journalism.
Rampeo said he had 105 sheep which used to fetch him more than M15 000 a year before the new law came into force.
He also said he expected that his 30 goats would fetch him the much-needed money to make ends meet but this did not happen.
Another disgruntled farmer, Hlomelang Rahatla also from Thaba-Tseka but in Lesobeng Ha Mohau, said he had now resorted to selling his sheep on the side of the road in Maseru to make ends meet due to delayed payments by the Lesotho Wool Centre.
Rahatla further said he was being forced to sell his sheep at a lower price due to desperation.
“When we are not desperate and it’s peak-season, we normally sell the best sheep at about M1700.00 and the lowest would be M1200.00, but today, the best quality sheep goes for M850.00 and the lowest can go for as little as M650.00.
“I am a father to two girls who are in high school here in Maseru and I have to cough-up M2600 per child in fees per year. But I cannot raise that money due to the delayed payments from the sale of the wool,” said Rahatla.
Rahatla added he was now stranded as the new regulations had since driven independent wool buyers out of business. These traders, he added, would give him cash for his produce.
“When we brought our sheep here to be sold by the roadside in Ha Matala, we knew we could go to a nearby wool-trader’s shearing shed and sell our wool for instant cash, but the business has been closed down by government since the Chinese came into the wool industry,” said Rahatla.
It was after much outcry from farmers such as Rahatla and Rampeo, as well as fears that a new farming season had come, that parliament established the ad-hoc committee to investigate the new policy and the country’s wool-and-mohair industry as a whole.
The ad-hoc committee comprises MPs Likopo Mahase, Ntlhoi Motsamai, Selibe Mochoboroane, Teboho Sekata, Kimetso Mathaba, Thulo Mahlakeng, Limpho Tau, Moeketse Malebo, ‘Mapulumo Hlao, Thuso Litjobo and Thabang Kholumo, Motlohi Maliehe, Mohapi Mohapinyane, Tšeliso Kalake, Kose Makoa, Tlokotsi ‘Manyoko and ‘Marapelang Malefane.
The committee began its work this week, 2 July and is expected to complete the investigation on 11 July.
People like Rampeo and Rahatla—Thinyane told the Committee— were now in desperate need of food parcels after an orchestrated plan to swindle farmers of their wool and mohair proceeds was implemented by Shi with the help of Small Business minister Chalane Phori.
Phori has defended the new localisation policy, which has forced farmers to take their wool and mohair to the Lesotho Wool Centre in Thaba-Bosiu, to be a noble initiative that would reap the country much returns.
Phori and his ministry are yet to appear before the same parliamentary committee.
But in his testimony, Thinyane told the committee that before the amendment subordinate law—the Agricultural Marketing (Wool and Mohair Licensing) (Amendment) Regulations, 2018—came into effect to destroy their well-oiled wool and mohair business, they had 231600 people dependent on the proceeds of the industry.
Thinyane said the association’s 40 000 members, on average, each have three direct dependents: a spouse and two children.
He further said the industry directly employed 900 shearing men, 660 men and women for classing, 300 packaging machine operators and last but not least, 80 000 herdboys. He also said transport-owners whose trucks were hired frequently to ferry wool to storage facilities in Maseru, also benefitted from their produce.
But, Thinyane told the committee, all these beneficiaries, including himself, were left stranded after Shi delayed to pay the farmers while those who got paid received a pittance compared to what they used to receive when their produce was being sold by a broker based in South Africa called BKB.
Thinyane also gave an account of how Shiame to be handed the farmers’ wool and mohair. He said the association was desperate for new wool-storage sheds at a newly acquired site in Thaba-Bosiu after being told the old sheds along the railway were to be removed, and decided to enter into the Lesotho Wool Centre joint-venture with Shi’s company, Maseru Dawning Trading (PTY) LTD.
Thinyane also said since Trade minister Leketekete Ketso was going to a Trade Expo in China in 2012, and because the LNWMGA had made a resolution at its annual general meeting to push for the localisation of wool and mohair auctions, they association decided to court Chinese companies into setting up a wool and mohair scouring plant in Lesotho.
Thinyane says in China, they found an attractive company that cleaned and processed wool.
“Shi was among the people we met in China, but we were not interested in his company but this other company that appeared to us to be the best to bring to Lesotho. At that time, Joshua Setipa was the LNDC Chief Executive Officer.
“To start, we were supposed to be shareholders with M5 million worth of seed capital to contribute to this company. Not ready to part ways with M5 million belonging to the farmers, we solicited a M5 million loan from government, but all our efforts were in vain,” said Thinyane.
Thinyane further told the committee that amid the financial challenges, the association was not happy when it discovered that in Lesotho, their preferred company would be represented and led by John Xie.
“The association decided it could not enter into an agreement with John as we held the perception that he did not want to empower Basotho businesses, but wanted to prosper alone.
“Looking at most businesses he owned like the National Abattoir, we remembered John was not doing any business with Basotho farmers and we did not find it fitting to enter into a business with him, so we refused the deal,” he says.
But in 2014, Thinyane said, “we were told by the transport minister our wool storage sheds at LPMS were built on land belonging to the railway company and they wanted to develop the railway. Then we had to move elsewhere”.
He said it was at this time that Shi came to the farmers’ association after it had secured land in Thaba-Bosiu.
“We entered into a joint-venture with Shi’s company called Maseru Dawning Trading. We did not bring him to Lesotho. We were told by one of the ministers that the same person we had met in China was in Lesotho and he could be able to help us and we met with him and that’s when we established the Lesotho Wool Centre.
“We took 75-percent shareholding in the joint-venture and Shi took just 25-percent.
“The plan was that we construct four stalls for wool-storage and after their completion, John was supposed to come to us with a business plan and then come to us with it.
“When the first stall was to be completed in 2017, our partner (Shi) demanded that we should bring wool to him to test whether he would be able to sell it to China,” Thinyane told the parliamentary committee.
He further said by this time, Shi was persistent that the farmers’ wool and mohair should be given to him to sell.
“Then we learned during a meeting with the Small Business minister that we were soon to receive a court order from the Chinese man (Shi) we had brought to Lesotho and only to disappoint.
“The minister also said he was going to make a law to stop wool from being taken to Port Elizabeth in South Africa and we would be forced to take wool to Thaba-Bosiu instead.
“Some time after meeting with the minister, the court order he warned us about came,” said Thinyane.
But after the resultant court battle, Thinyane told the committee that the High Court ruled in their favour and ordered that the farmers could sell their produce wherever they wished.
In anger, Thinyane further told the committee: “The Minister of Small Business told me he was going to close the bank accounts of our broker based in Port Elizabeth, BKB, and he’d see how we intended to pay farmers after the closure of the accounts.
“Indeed BKB’s bank account was closed and later opened after the court case was finalised in their favour.
“The persistent government came-up with a new plot against our defiance, using the Lesotho Revenue Authority and accusing us of not paying tax.
“They argued that we owed the government about M10 million in tax. But we protested against this and this also caused a lot of noise.
“Then the minister told us that he was still going to draw a law that would force us to take our wool and mohair to the Thaba-Bosiu-located Lesotho wool centre,” said Thinyane.
Thisnyane further told the committee that after the Agricultural Marketing (Wool and Mohair Licensing) Amendment Regulations were drawn in 2018, the farmers went to court but the process took long to bring a final decision.
“Because the LPMS stalls for wool and mohair storage located in Hoohlo Industrial Area we were using were under the control of the minister, he threatened to take any wool we would store there to Thaba-Bosiu when we were refusing to take wool to Thaba-Bosiu.
“But afraid to be slapped with the hefty penalties associated with a refusal to abide by the new subordinate law, we took the wool to Thaba-Bosiu.
“After agreeing under protest to take the wool to Thaba-Bosiu, when we met the Minister, he said we must go work with Shi to sell the wool.
“But we protested and refused this as we suspected that Shi’s manoeuvres that ended with government enacting a special legislation for him were intended to defraud the farmers,” Thinyane told the committee.
He also said the association told Minister Phori that after having forced farmers to take their wool to Thaba-Bosiu, government should ensure the farmers received their money as “we feared Shi would not deliver as promised”.
Thinyane told the parliamentarians what followed was poverty to the farmers who had never begged for anything in their lives.
“This committee must go see the poverty in the households of the farmers.
“In June 2018, mohair was selling at about M600 per kilogramme, while we have learned that Shi, after failing to get a market for our mohair, has taken it to South Africa and sold it at black market prices for a paltry M120 per kilogram.
“With Shone Shi, we only have less than 20000 farmers who have since received their money after much delay.
“Again, the farmers do not know how much their wool has been sold for and they have received far less than what they used to receive.
“What is also appalling about Shi’s work is that it is shroud in secrecy. This past season, we know that the returns we got were much lower amid the fact that the prices in the international market had increased by 14 percent. But we failed to see that increase in our earnings as a result of this government-imposed opaque system run by Shi,” said Thinyane. The parliamentary committee’s investigation continues.