The government has started paying wool and mohair farmers owed by the Lesotho Wool Centre (LWC) for their fibre auctioned by the company during the 2018/2019 season.
Addressing journalists this week, Deputy Minister of Agriculture, Food Security and Marketing, Likopo Mahase, said a total of 759 farmers have so far been paid.
He said the total number of farmers whose payments were outstanding was 2710 before the government’s intervention. These were owed M10 530 766, 10.
The arrears arose following a 2018 fibre trading policy change by the government which compelled all farmers to sell their fabric through the then only local broker, the LWC.
The promulgation of the Agricultural Marketing (Wool and Mohair) Regulations of 2018, sought to change the 44-year-old practice of local farmers selling their fibre through South African based brokers.
However, the farmers fiercely resisted the move claiming paltry pay compared to what they used to get from South African brokers.
The government eventually ended LWC’s monopoly by opening up the business to more local entrants in 2019. It has also allowed farmers the freedom to trade with either domestic or international brokers.
But by then, the LWC had already accrued arrears and has been failing to pay farmers. Since 2018/19, LWC has been struggling to pay farmers until recently when the government decided to intervene and pay farmers on his behalf.
This follows the 10 June 2019 the National Assembly’s recommendation that the government should pay all farmers whose payments were outstanding.
In an effort to implement the above recommendation, cabinet directed the Ministry of Small Business Development, Cooperatives and Marketing and the Ministry of Agriculture and Food Security to collect and verify lists of unpaid wool and mohair farmers.
On Monday, Mr Mahase said his ministry on 22 April 2021 submitted payment vouchers to treasury so that it could start processing for 759 farmers.
Those whose payments have been processed bank with Standard Lesotho Bank (SLB) which paid M3 078 639, 39 to 643 farmers, Lesotho Post Bank (LPB) which paid M557 755, 13 to 114 farmers and First National Bank (FNB) which has paid M7 631 58 to two farmers.
“The payment vouchers from treasury were submitted to the Central Bank of Lesotho (CBL) and there was confirmation of the receipt of funds into the accounts where these payments were made to,” Mr Mahase said.
He said the payments to the individual farmers’ accounts held with SLB and FNB will be facilitated by the Ministry of Finance while payments for those who bank with LPB would be facilitated by the bank itself because the farmers do not have active bank accounts.
“Seven hundred and forty-nine farmers have been confirmed to have active bank accounts whereas 1 951 farmers have either no bank account, dormant, inactive, incorrect accounts.”
He said SLB is processing payments for 633 farmers amounting to M3 078 639, 93 while FNB is processing payments for two farmers amounting to M7 631.
Mr Mahase further noted that the remaining 1951 farmers without bank accounts shall be paid a total of M6 886 740 04 over the counter at LPB.
“LPB has confirmed that payments will be made as soon as lists have been verified,” he said.
Mr Mahase said the ministry has requested an additional M2 106 153 22 as contingency for incidental cases of farmers that may have been excluded during the stock sheets compilation at shearing sheds.
He said this will be verified after all payments have been successfully made and the queries have been submitted to the ministry.