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Casting away chains of poverty



MASERU – FOR decades, Basotho farmers were dependent on a South African wool and mohair brokers’ cooperative society, Boeremakelaars Koöperatief Beperk (BKB), to sell their wool and mohair. The BKB would make use of shearing houses built by the government of Lesotho throughout the country to collect wool and mohair for sale in London and other international markets.

BKB would in return pay the farmers after deducting its commission. In most cases, the Lesotho farmers would be left unhappy after accusing BKB of charging exorbitant commissions. But that is set to come to an end, thanks to a new Australian investor, Stone Shi, who has pumped in M37 million in the construction of a 10 000 square metre shearing centre in Thaba-Bosiu for the Lesotho National Wool and Mohair Growers Association.
The association raised M4 million for the project.

Shi has 25 percent shares in the shearing centre while the association holds the remaining 75 percent shares.
Shi is the CEO of the shearing centre. With the centre fully operational, brokers such as BKB will no longer be required. Lesotho’s farmers will, for a change, have direct access to the markets through their own company.

The shearing centre was officially opened last week. Before the association and Shi joined hands to establish the shearing centre, BKB used a network of shearing houses erected by the government throughout the country. The agents would then collect the wool and sell to international markets.
BKB would in return pay the farmers after deducting its commission.

Now the Lesotho Wool Centre, owned by the farmers themselves, will be the one directly selling to the international markets without the services of brokers. The association has always enjoyed the use of 114 shearing sheds provided and staffed by the government and the wool would be collected by BKB to auctions.

Lesotho’s wool and mohair is primarily handled by BKB which presents it to the auction floors in Port Elizabeth and Durban.
BKB works on commission and wool and mohair is exported in the raw, un-scoured state (as is most of South Africa’s wool and mohair).
Due to quality considerations, Lesotho’s wool and mohair needs to be blended with other wool types in order to produce a specific “top” of a particular type demanded by spinners.

This blending process can only be done at the time of scouring – tops cannot be blended after scouring.
Pure lots of Lesotho wool and mohair, on their own, are generally not suitable for making tops.
BKB, in some instances, also re-grades and repackages Lesotho wool and mohair before it is presented for auction.
BKB provides the association with a comprehensive analysis of wool quality, quantities, shearing shed of origin, number of producers, numbers of sheep and goats shorn, auctions held and prices received.

A recent study by the Wool and Mohair Production Project says individual producers are paid directly by the broker.
They receive the international price for their product “and there is complete transparency in the transaction”.
“This wool passes through the association but wool lots retain the original grower’s identity to the auction floor and brokerage margins and transport and handling charges are minimal and completely transparent,” the study says.

Shi was roped in following a September 2014 project proposal supported by the IFAD, titled Wool and Mohair Promotion Project.
The project included a value chain study which identified the following issues that needed to be addressed in order increase overall productivity, increase financial returns from wool and mohair and maximize the project’s impact on reducing poverty and increasing employment:
l) The increasing degradation and low productivity of the rangeland in the face of increasing climate variability;
l) The low productivity and poor quality of the sheep and goat flocks;

l) The poor standard of wool and mohair handling – shearing, classing and presentation for sale;
l) The need to further develop cottage industries to produce higher value items for the high end of the market; and
l) The need to address the overgrazing through improved rangeland management.

In its quest to come up with a solution, the association raised M4 million to set up the Lesotho Wool Centre.
Small Businesses Development Minister Chalane Phori told thepost on Tuesday that this is meant to increase marketing value for farmers by exporting wool directly to international markets while cutting off middlemen.
This will see Basotho retaining better profits.

They can also take part in influencing the market price of farmers’ commodities, Phori said.
He said Lesotho was losing 20 percent before the new arrangement, which translated to about M50 million per year.
He said the conception of LWC was created by the association and Maseru Dawning in August 2014.

The agreement of LWC was signed in January 2016, the Joint Venture was set up in April and in July 2016 they got the trade licence with the registration number JY 2016 / 0014. In December 2016 they got the site lease and they started building LWC in April 2017.
“The wool store has 10 000 square metres which is the biggest woollen project in Africa,” Phori said.
“They have completed the construction of wool store and office,” he said.

Shi told thepost that he has been dealing with wool and mohair for the past 17 years in Australia “where Lesotho’s wool and mohair is highly valued due to its quality”. “Lesotho’s wool and mohair is combined with the long Australian’s mohair to make the best quality which is (popular) worldwide,” Shi said.

“Lesotho is a small country but has potential of producing more and high-quality wool and mohair hence i found it important to invest in Lesotho,” he said. “The agreement signed is going to be a long-term agreement as I am not willing to withdraw my agreement like other investors who did due to (Lesotho’s political) instability,” he said.

LWC will seek to minimise direct marketing costs such as transport handling costs and other selling costs.
“As a way of minimizing costs the company aims to eliminate the middleman and several handling points of the products,” Phori said.
“LWC guarantees the actual payment to farmers will be much more than before,” he said.
“In this way clients of LWC will realise high proceeds each season.”
Phori said he is proud that the LWC will guarantee employment to more than 100 locals when it is fully functional.
“Shi’s investment amount is huge, meaning he means nothing other than business but what is most pleasing is he has just 25 percent while Basotho have 75 percent in this agreement,” he said.

“The action says Lesotho’s economy is shifting upward a little bit,” he said. The Lesotho National Farmers Union (LENAFU)’s spokesman, Taoana Lephoto, said the venture is of great significance as oil that will be secreted while cleaning the wool will be collected and sold by Basotho.

“If Basotho would leave aside corruption, this deal is going to take Lesotho’s economy to another level,” Lephoto said.
“It is embarrassing for Basotho to call themselves ‘Ma-apara-kobo’ (those who wear the blanket) without even a single lesson of how to make that blanket yet they produce the wool and mohair that are used as materials for weaving blankets,” he said.

“It’s high time Basotho make the blanket with their wool and mohair produced in this country,” he said.
Masupha Nkopane, a farmer rearing 200 merino sheep from Matsieng, said he makes M50 000 per annum after shearing the sheep.
Nkopane said he is expecting the money to double after the establishment of the shearing centre in Thaba-Bosiu.

“The money we used to receive for our wool and mohair did not match the quality of our products,” Nkopane said.
“Because of Lesotho’s altitude, our wool is of high quality and clean, making us the most well recognised country worldwide in terms of wool and mohair production,” he said.

Prior to the establishment of the association the Basotho wool and mohair producers were confronted by low market returns and lack of market information, according to Nkopane. BKB was the only recognised trader who had the monopoly of buying their produce and marketing it to Europe.
Currently the main buyers of Lesotho wool are China, India, Czech Republic and other European countries.

There are about 37 500 sheep and goat farmers who rear a combined estimated four million sheep and goats.
The farmers employ about 75 000 herd boys.

Senate Sekotlo

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LEC to switch off households over debts



MASERU – The Lesotho Electricity Company (LEC) will from Tuesday next week begin switching off clients who owe it money.

The LEC issued a seven-day ultimatum to all customers who owe it on Tuesday last week. The deadline ends on Monday.

It is expected that the LEC will begin switching off households that have defaulted.

The state-owned power company, however, is not going to touch any government department or business entities that owe it on grounds that they are in payment negotiations.

The LEC move comes barely two weeks after it cut electricity supplies to the Water and Sewerage Company (WASCO) thus causing it to fail to pump water to communities countrywide for more than two days.

The LEC says it is owed close to M200 million by government departments, businesses and individuals.

The LEC spokesman, Tšepang Ledia, told thepost that the government and the businesses will not have their electricity cut because they are in negotiations.

“We are in negotiations with the government and businesses and hopefully they will pay,” Ledia said.

“We advise the ordinary people to pay their debts before the 20th of March 2023 or else we cut the services,” he said.

The LEC says it is running short of funds for its daily operations.

In December last year the company increased power tariffs by 7.9 percent on both energy and maximum demand charges across all customer categories for the Financial Year 2022/23.

Last week the LEC boss, Mohato Seleke, said postpaid consumers and sundry debtors owe the company M169.4 million.

He said unless the debtors pay he will be unable to buy electricity from ’Muela Hydropower Project, Eskom in South Africa and Mozambique’s EDM.

This, he said, could cause serious load shedding in the country and could be devastating for businesses.

Seleke said the LEC spends M630 million monthly to buy electricity.

“If postpaid consumers do not settle their debts this could prevent the LEC from being able to buy electricity which can lead the country to encounter load-shedding,” Seleke said.

Seleke said collecting debt from government department ministries was a challenge as there is an understanding that since LEC is a state-owned company, it will continue supplying government agencies with electricity and they will settle their bills when they have funds to do so.

Seleke said the LEC has lost M21 million to vandalism during this financial year.

Relebohile Tšepe

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Bumper payout for former mineworkers



MASERU – AT least 11 316 current as well as former mine workers are set for a bumper payout after Tshiamiso Trust began disbursing the first billion Maloti to workers who are suffering from silicosis and tuberculosis.

The payment comes two years after Tshiamiso Trust began processing claims for the historical M5 billion settlement agreement between mineworkers and six gold mines in South Africa.

Speaking at the payment announcement in Maseru last week, the Trust’s CEO, Lusanda Jiya, said it has been two years since they officially began accepting claims.

“Our people come to work every day with the mission of impacting lives for the better, and the first billion rand paid out to over 11 000 families is just the beginning,” Jiya said.

“We know that there is no compensation that will ever be enough to undo the suffering endured by mine workers and their families,” he said.

“However, we are committed to deliver our mandate and ensure that every family that is eligible for compensation receives it.”

Jiya said the Trust is limited both in terms of the time in which they can operate, and the extent to which they can assist those seeking compensation.

Broadly speaking, the eligibility criteria include among others that the mineworker must have worked at one of the qualifying gold mines between March 12, 1965 and December 10, 2019.

Secondly, living mineworkers must have permanent lung damage from silicosis or TB and deceased mine workers representatives must have evidence that proves that they (the deceased) died from TB or Silicosis.

Tshiamiso Trust has a lifespan of 12 years, ending in February 2031.

Over 111 000 claims have been received to date, through offices in South Africa, Lesotho, Botswana, eSwatini, and Mozambique.

The Trust is working with stakeholders in these countries and others to mobilise its efforts and expand operations.

The history of silicosis in South Africa goes back to the late 1880’s when the first gold mines began operations.

The gold was stored and locked in quartz, a special rock that contains large amounts of silica.

Crystallised silica particles can cause serious respiratory damage if inhaled.

In the earlier days of gold mining, dust control, health and safety standards and the use of PPE (personal protective equipment) were not as advanced as they are today.

Tshiamiso Trust was established in 2020 to give effect to the settlement agreement reached between six mining companies.

The companies are African Rainbow Minerals, Anglo American South Africa, AngloGold Ashanti, Harmony Gold, Sibanye Stillwater and Gold Fields.

The settlement agreement was reached and made after a ruling by the Johannesburg High Court as a result of a historic class action by former and current mineworkers against the six gold mines.

Justice for Miners is a coalition of interested parties in the mining sector launched at the Nelson Mandela Foundation in Johannesburg in 2020.

The Johannesburg High Court approved the setting up of the Tshiamiso Trust to facilitate payment by the companies to affected miners.

Keith Chapatarongo

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Farmers cry over cost of livestock feed



MASERU – Lehlohonolo Mokhethi is a farmer who has been running a successful poultry business, thanks to a small loan he got from a local bank.

He now has 300 chickens.

He says his vision is to rear 5 000 chickens by 2025 and employ 30 youths. But he is now grappling with a new challenge: the ever increasing cost of chicken feed.

That is threatening the viability of his business.

“The biggest challenge is that food prices increase every day, feeding is expensive,” Mokhethi said.

“It is quite difficult to make profit in business if each and every day food prices increase. Today I am buying a bag of food with a certain amount then the next day the price has increased,” he says.

“Our customers fail dismally to understand that food has increased and the Chinese are taking our market because they sell at a low price thus I run at a loss.”

Last week, a top attorney in Maseru who is also a prominent farmer, Tiisetso Sello-Mafatle, called a meeting for farmers to discuss these challenges.

She says the government must regulate the prices of livestock feed.

That is critical if the farming business is to succeed, she says.

Attorney Sello-Mafatle says farmers must come up with a structure for livestock feed prices which they would present to the government for gazetting.

“We should state our regulations and give them to the government to make everything easy for both parties because we cannot wait for the government to make regulations for us,” Sello-Mafatle says.

She adds that “farmers should be bullish about what they want and never have fear endorsing new things”.

“I will not be challenged or cry (because of) what life throws at me but I will cry when things are not happening the right way,” she says.

Mafatle says farmers need to know who they are and know the capabilities they have.

“This will help a farmer in becoming the best in any field they are in once they are confident about themselves,” she says.

Karabo Lijo, another participant, said they have to influence the cost of inputs in agriculture, especially livestock feed.

“We have to go back to cost-price analysis where as farmers we are able to derive the selling price and the break-even point in our production,” Lijo said.

“We can also derive the stable or constant mark-ups on our products,” he said.

“We need to do research to increase the ability to produce byproducts which are likely to have the longest shelve life,” he said.

The meeting urged farmers to diversify their products by introducing such things as mushroom farming. They said mushrooms can grow very well in Lesotho due to its favourable climate.

The farmers also demanded that there should be regulations on how land can be sold or borrowed in Lesotho.

Tholoana Lesenya and Alice Samuel

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