Lesotho's Agriculture, Food Security and Nutrition Minister, Selibe Mochoboroane, has assured the Senate that the government is working to resolve the crisis at the Lesotho National Dairy, including the non-payment of farmers and a long-running dispute over the plant's ownership. The dairy had failed to make payments to farmers since July, following the departure of South African operator, Denmar, from the plant.
Minister Mochoboroane was responding to questions from Senator Seabata Motsamai, who sought clarity on the ownership, construction, management and current operation of the Lesotho National Dairy plant in Ha Leqele. The senator also asked about the agreement between Lesotho and Canada under which the plant was established, including when it was signed, its duration and the respective obligations of the two governments.
According to Minister Mochoboroane, the plant was originally owned by three shareholders — the government of Lesotho, the Canadian government and the Lesotho National Dairy Board — each holding 500 shares. The original agreement that established Lesotho's dairy industry infrastructure was finalised in 1987. However, problems started in 2016 when it appeared that Lesotho Dairy Products is also a shareholder.
Minister Mochoboroane said the government is now investigating how Lesotho Dairy Products acquired its purported shareholding and will resolve the matter before the end of the year. The land that the plant is built on belongs to the government. The minister's undertaking comes amid uncertainty over the plant's ownership and operations, while farmers supplying milk continue to await payment.
The Lesotho National Dairy plant was established under an agreement between Lesotho and Canada. Senator Motsamai had asked for details of the agreement, including the legal basis for Lesotho's ownership if it belonged to the government, and the arrangements governing its management and use during and after the agreement.
Minister Mochoboroane did not disclose the amount owed to farmers but said resolving the operational problems at the dairy was among the government's priorities. The government is working hard to solve the payment problem that started in July after Denmar left the plant.
The Lesotho National Dairy dispute highlights the challenges faced by the country's dairy industry. The government's efforts to resolve the crisis are expected to bring relief to farmers who have not received payments. The issue is being closely watched by stakeholders in the agriculture sector.
Key points
- The Lesotho government is working to resolve the crisis at the Lesotho National Dairy.
- The dairy had failed to make payments to farmers since July.
- The government is investigating how Lesotho Dairy Products acquired its shareholding.
