Obstacles to the profitable production and marketing of horticulture products in Lesotho: an offset-constrained probit modelling of farmers’ perception - Institutional Constraints to Small Farmer Development in Southern Africa - page 153

(Mphahama, 2010). Attention then shifted to water resource development culminating in
the huge construction programme under the Lesotho Highlands Water Project.

But neglecting agriculture in a country with virtually no non-agricultural sector of note has
turned out to be a huge mistake. Current rates of unemployment are put at 45% and they
have never seemed better (CIA, 2008). On top of this, the current food/humanitarian crisis
facing the country has been so devastating that it has sent the development community into
a panic. The Highlands Water Project has also failed to deliver the expected employment
and income relief and has rather created enormous social and political tensions, including
displacement of populations.

The production problems of Lesotho's agriculture, or the supply-side questions, are
complicated by the constraints in both internal and external marketing (Mphahama, 2010).
The country's negative terms of trade for most agricultural and industrial products are
well known. The internal road network and other infrastructure continue to pose serious
constraints to the easy movement of agricultural produce in the country, creating a situation
where consumers are motivated to purchase from South Africa. At the same time, internal
cost structures escalate domestic production costs with the result that export production of
produce with excellent production prospects in the country seems unattractive.

Expectedly, the average growth rate of the economy has slowed in the 1990s, from an average
per capita growth rate of 5.1% in the first half of the decade to an average per capita growth
rate of 4.7% in the second half, up to 1998. The 2003 Human Development Report of
the United Nations Development Programme (UNDP), ranked Lesotho 137 th out of 175
countries (UNDP, 2003). Since then, the country has fallen further to rank 156 th out of 182
countries (UNDP, 2009). Further, recent developments in the Republic of South Africa,
including technical changes in mining and the demands of democratic structures mean
that Lesotho must look internally for solutions to its economic problems. This realization
has recently created immense interest in the formulation of an internal marketing policy
targeting a range of agricultural commodities. Over the years, the government has been
promoting efforts to diversify away from foodgrains and invest in sub-sectors in which
the country has comparative advantage. Because of its climate, abundant water supply and
pest-free status, horticulture has been identified as a sub-sector with enormous comparative
advantage (Mphahama, 2010). There is also evidence that demand for horticulture products
is growing especially in the light of increasing awareness about the role of horticulture
products in boosting resistance against diseases.

On the basis of previous work in Lesotho the following four main factors should be
considered in programmes to boost horticulture production.
• the key physical production factors such as the infrastructural setting and land tenure

arrangements;