REPORT ON THE AGRICULTURAL MARKETING (WOOL AND MOHAIR LICENSING) REGULATIONS, 2018
THE PORTFOLIO COMMITTEE ON THE ECONOMIC AND DEVELOPMENT CLUSTER
National Assembly Phone: +266 22323035 P. O. Box 190 Fax: + 266 22310434
On Friday 18th May, 2018, the Hon. Minister of Agriculture and Food Security tabled the Agricultural Marketing (Wool and Mohair Licensing) Regulations, 2018 in the House. The Regulations were referred to the Portfolio Committee on the Economic and Development Cluster for consideration in terms of Standing Order No. 100 (3). The committee invited the Ministry of Agriculture and Food Security to a briefing session in accordance with Standing Order No. 101 (2).
The Committee, therefore, presents this report to the House for consideration.
- MINISTERIAL BRIEF
The Regulations are made pursuant to Section 4 of the Agricultural Marketing Act of 1967 as amended. The Agricultural Marketing (Wool and Mohair licensing) Regulations, 2018 introduces new licenses which will serve as a source of revenue for the Government of Lesotho. It is anticipated that Income Tax will also enhance the revenue collection. Farmers will also benefit due to reduction in transport costs since trading will be done locally.
The Agricultural Marketing (Wool and Mohair Licensing) Regulations, 2018 are divided into three categories which are: licenses, prohibition of wool and mohair export at early marketing stages and penalties for offences. The licensing introduces the following categories brokerage: wool and mohair shearing shed, brokering, testing, trading and auctioning, processing and exporting. Secondly, the prohibition prevents early stages of export of wool and mohair before it has been brokered or prepared for sale, and directly exported to buyers who bought the wool. The third section introduces penalties intended to prohibit illegal operations in the wool and mohair industry.
2.1 STAKEHOLDERS’S INPUTS
The Lesotho National Wool and Mohair Growers Association (LNWMGA) appeared before the Committee on the 28th May 2018. The purpose of the meeting was to get the views of LNWMGA on the Agricultural Marketing (Wool and Mohair Licensing) Regulations, 2018.
2.1.1 LNWMGA stated their views as follows: (a) The Principal Secretary in the Ministry of Small Business Development, Cooperatives and Marketing wrote to the Association on 14th May 2018 informing them that there would be a consultative meeting on Wool and Mohair Marketing to be held on the 30th May, 2018.To their surprise the Regulations addressing the same matter were tabled on 18th May 2018 prior to the already mentioned date. (b) LNWMGA heard through the media that wool and mohair will be sold at Lesotho Wool Centre in Thaba-Bosiu and they have no idea how that decision was arrived at and yet they are the major shareholders. (c) The LNWMGA pleaded with the Committee to not allow the Agricultural Marketing (Wool and Mohair Licensing) Regulations 2018 stating that allowing the Regulations would have a negative impact on the well- being of many Basotho who survive on wool and mohair. (1) LNWMGA would like wool and mohair to be sold in the country in the future but they feel the country does not yet have the capacity to do so. (2) There was concern that Schedule 1 of the Regulations gives licenses to individual citizens and companies while Cooperatives and associations are excluded and therefore creates a monopoly. (d) It was also stated that the Association has a good working relationship with BKB and they have shareholding under BKB‟s Empowerment Trust. LNWMGA want to continue working with BKB.
(e) The Testing laboratory should be independent which means exclusive of all other licensing categories.
2.1.2 CABINET SUBCOMMITTEE
The Committee also invited a Cabinet Sub-Committee comprising of the following Ministries;
(a) Minister of Small Business Development (b) Minister of Trade, Cooperatives and Marketing (c) Minister of Agriculture and Food Security (d) Minister of Development Planning (e) Deputy Minister of Home Affairs
The Committee held a meeting on 30th May, 2018 with the Sub-Committee stated above and in that meeting; the Sub-Committee indicated that only 40% of wool and mohair farmers are members of LNWMGA and the rest are private farmers.
2.1.3 PRIVATE FARMERS
The Committee did not have the opportunity to meet the private farmers to receive their views and opinion on the Regulations.
- COMMITTEE’S OBSERVATIONS
The Committee noted, and made the following observations:
- The Regulations were submitted by the wrong Minister as per Wool and Mohair Marketing (Amendment) Act, 2001.The Minister responsible for administration of Agricultural Marketing should not be Minister of Agriculture and Food Security but the Minister of Small Business Development, Cooperatives and Marketing.
- The Regulations have excluded cooperatives and associations under Schedule 1 and this schedule should also include two additional categories in the form of; (1) Associations locally registered 4 (2) Cooperatives locally registered
- The Regulations appear to be promoting a monopoly on the wool and mohair brokering where only Lesotho Wool Centre would qualify immediately as they are currently the only operators who have 10,000 square metres of floor space. The minimum of 1,000 square metres is proposed.
- The Committee observed that there is a need for regulations on the hides and skins processing and exporting.
- Establish „Wool and Mohair Licensing Board‟ to avoid centralizing this responsibility solely on the Minister.
- The committee proposed “Import of wool and Mohair” category to be incorporated in Schedule 1. 4. MINORITY VIEW (Standing Order 92 )
There was a Minority view which was expressed by some Members of the Committee concerning clause 4: Prohibition of export, which reads thus “a holder of an export license shall not export wool and mohair unless it is prepared, brokered, traded and auctioned in Lesotho.” The minority view was to disallow this clause. However, the Committee decided as indicated in section 5 below.
- COMMITTEE’S DECISION The Committee has decided to disallow Schedule 1 in the Regulations. All other clauses are allowed by the Committee.
The Committee recommends the adoption of this report and approval of the Regulations except for the Schedule 1 which is recommended to be disallowed by the House.
Members of the Committee
- Hon. S. T. Rapapa (Chairperson) 2. Hon. L. S. Litsoane 3. Hon. L. R. Mahase 4. Hon. S. D. Mangobe 5. Hon. T. J. Sophonea 6. Hon. M. J. Maime 7. Hon. T. L. Kibane 8. Hon. M. P. Maqelepo 9. Hon. L.C. Hlomelang 10. Hon. L. K. Mokoma 11. Hon. L. R. Moramotse 12. Hon. M. Malefane 13. Hon. M. C. Hlao 14. Hon. T. T. Mosena 15. Hon. M. R. Khati 16. Hon. M. Hlalele 17. Hon. P.D. Mafereka 18. Hon. T. P. Mokeretla 19. Hon. N. Motsamai 20. Hon. S. H. Sekatle 21. Hon. T. L. Mokhosi 22. Hon. M. Tlali