1. For over 80 years, wool and mohair sales have provided Lesotho with its largest exports and with its largest domestically-generated sources of income. Presently, fleeces are marketed through any of three outlets: private traders, a government-sponsored marketing service, or, illegally, through smugglers. With the exception of some of the smugglers' purchases, all of the wool and mohair is sold on world markets through a South African farmers' marketing co-operative under the auspices of the South African Wool and Mohair Boards. The proportion of the clip which is marketed through each outlet varies from year to year depending on the level of world prices and on the relative effectiveness of the outlets in responding to stockowners' marketing needs.
2. This marketing system has evolved in response to real or perceived problems with preexisting systems. In addition to private sector marketing, Lesotho has experimented with co-operative societies, parastatal corporations, and government marketing/regulating departments. Some of these institutions have been more successful than others. Since all but a tiny portion of Lesotho's clip is marketed in South Africa, this evolution has had to respond to initiatives from this source as well as from domestic concerns.
3. Evaluations of the efficiency and effectiveness of the present system suggest that there is room for additional adjustment and change. In addition, market structure analysis indicates that the private trading sector has been incorrectly characterized and, consequently, that past reforms have inadequately addressed problems in this area. This paper outlines these evaluations and analyses and seeks to draw implications from them for continued institutional and policy reform. It is hoped that the paper would also provide relevant lessons for the analysis of similar agricultural output marketing problems in other parts of Africa.
