Present marketing of wheat in Lesotho distort and imposes a heavy tax on the Lesotho economy. It puts upward pressure on producer and consumer prices, which results in welfare losses to consumers -including the majority of rural and agricultural households who are deficit producers of this commodity. The winners from these policies are the relatively small number of surplus producers and the three industrial mills enjoying some monopoly powers. It is recommended that the Government of Lesotho liberalize Lesotho's wheat market.