Thousands of Lesotho wool and mohair farmers protested in Maseru on Friday, June 28 against the government’s decision to force them to sell their produce to a Chinese broker.
An estimated 10 000 farmers met in the capital of Maseru and marched to the country’s parliament and handed over a petition demanding that the law be repealed.
Many rural Basotho rely solely on the wool and mohair industry which earns the country R800 million a year and has at least 37 000 small-scale farmers.
New government regulations banned wool and mohair exports and gave an exclusive deal to Maseru Dawning a company owned by Stone Shi a Chinese national.
Prices collapsed as Maseru Dawning took advantage of its monopoly in the wool and mohair market but payments to farmers have been delaying for months forcing many to sell or slaughter their animals for food.
The situation has become so bad that at least 20 farmers have committed suicide since the new regulations were put in place according to the Lesotho National Wool and Mohair Growers Association (LNWMGA).
The heart of the problem
Trouble started soon after the Lesotho Wool Centre was completed in September 2017, the 10 000 square-metre warehouse in Thaba Bosiu is owned 25 percent by Maseru Dawning while LNWMGA owns the rest.
LNWMGA refused to supply wool and mohair to the Lesotho Wool Center insisting on selling at higher prices to BKB a South African company that has been a broker for the local industry for decades.
Maseru Dawning owner Stone Chi put pressure of the Lesotho government to intervene in the dispute through the Chinese embassy.
Soon after the bank accounts of BKB were frozen after the government accused the company of not paying its taxes and violating the country’s banking regulations.
The allegations of tax evasion were never proven in court and BKB’s accounts were later reopened but by then the company was now excluded from buying wool and mohair in Lesotho.
Lesotho’s Small Businesses Minister Chalane Phori and Trade Minister Tefo Mapesela came up with the Agricultural Marketing (Wool and Mohair) Regulations No 37 of 2018 which gave Maseru Dawning a monopoly in the wool and mohair industry.
The regulations also prohibit Basotho farmers from trading wool and mohair without a licence from Lesotho’s Ministry of Small Business Development, Cooperatives and Marketing.
Two South African companies OVK and BKB who dominated the industry for the last four decades were denied licences to continue trading in Lesotho.
The farmers initially won a court case to have the regulations repealed in May but the government appealed the decision and it was overturned in June.
A day before Friday’s protest Lesotho’s government announced that farmers would be granted a grace period of three months to sell their wool elsewhere but farmers insist the law must be completely removed.
Lesotho wool and mohair farmers protest on Friday, 28 June 2019