The Turkish flour dump

Armed with an 85-percent trust rating, in his State of the Nation Address, President Aquino confirmed what many fear. By virtually debunking dubious drumbeating and claims of competence, rose-colored statistics and an economic renaissance conjured up by Gloria Arroyo’s economic managers, Mr. Aquino enumerated how the country had been systematically plundered.

From the President’s list, we’ve singled out the issue of financial governance, specifically, the initiative on antismuggling. And upon it we’ve placed a face, albeit one painfully etched with deep lines and a frown.

It is not difficult to sympathize with the local flour industry. For too long the government has been unsympathetic, favoring, instead, smuggled and dumped importations.

We’ve written about this before. Former Senate Minority Leader Aquilino Pimentel Jr. sounded the alarm and even called for a congressional inquiry.

In studies by the Haceteppe University in Ankara, Turkey, the Department of Food Hygiene and Technology of the Istanbul University and the Department of Food Technology of the Balikesir University in Turkey, ochratoxins were found in 81 percent of analyzed samples and on those exported to Asia, 21.7 percent were contaminated with aflatoxins.

Aflatoxins and ochratoxins are mycotoxins. Mycotoxins are toxic products that enter the food chain from fungi that colonize crops. Both are deadly carcinogens. Once ingested, both resist decomposition and digestion. Both cannot be destroyed by cooking or freezing.

Unfortunately, cash registers peal louder than alarm bells. Trade officials have declared Turkish flour safe.

When commissions are earned for importations, nobody cares about toxicity. The rotting rice piled in National Food Authority (NFA) warehouses from recent overimportations is just one example.

Warped as it is, government indifference is typical. Inferior Turkish flour is used on lower-end products by the lower-end market. Add to that Arroyo’s hunger index and the increasing number subsisting on pagpag—the nouvelle cuisine that characterizes Arroyo economics. If the destitute can eat pre-eaten garbage, who cares about toxins?

More than the issue of public health, issues of smuggling—whether outright or technical—were accorded even lesser importance. Note that less than two years ago under the noses of Customs officials at the Port of Manila, five containers filled with Turkish wheat flour were allowed entry, despite protests from local millers who said the shipments were either misdeclared or smuggled.

Never mind that, previously, 10 containers, whose contents were misdeclared as starch but were later discovered to be smuggled flour, were off-loaded in Ozamiz City.

Faced with government dereliction, at wits end, in May local flour millers asked the government to investigate the dumping and technical smuggling of cheap Turkish flour. Submitting to Malacañang’s Review Committee on Smuggling and Tax Evasion Cases, documents detailing Turkish-flour smuggling, the businessmen virtually lined up the ducks.

Aside from inferior-grade Turkish wheat, local millers revealed that of 86,000 metric tons imported from Turkey last year, as much as 19,000 were undervalued—the equivalent of P16.9 million in tariff-revenue losses.

For the first quarter of 2010, they also reported that 80 containers brought in through the Port of Batangas were declared at 88.4 percent lower than statutory values under the Value Reference Information System (VRIS) set by the Office of the Commissioner of Customs.

Given an 88.4-percent undervaluation, all established by a single importer, over P4.6 million in tariff revenues was lost in one quarter. By the May elections, five months into 2010, at least P51 million had been lost through the Turkish importations of at least eight companies.

The report filed with Malacañang shows two of the eight used the Manila International Container Port (MICP), while a third used both the MICP and the Port of Manila.

One imported 8,592 MT, but underdeclared by as much as 37.30 percent. Another imported 7,086 MT, but underdeclared 30 percent. A third imported 10,488 MT, but underdeclared 23.3 percent. In each instance, over P13.8 million, P6.9-million and another P6.9 million, respectively, might have been cheated from the government.

For the accumulated losses, simply do the math. Turkish flour is assessed with a 7- percent duty and a 12-percent value-added tax upon entry. Given volumes imported between 2008 and 2009, undervaluations would have resulted in over P50 million in lost revenues. Add the 2010’s P51 million and one sees the importance of Mr. Aquino’s antismuggling initiative.

Newly appointed Customs Commissioner Angelito Alvarez and Bureau of Internal Revenue Commissioner Kim Jacinto-Henares have their work cut out for them. Fortunately, both are eminently qualified, competent and driven. To both, Godspeed and good hunting.

-Dean de la Paz

Source: http://businessmirror.com.ph/index.php?option=com_content&view=article&id=28229:the-turkish-flour-dump&catid=28:opinion&Itemid=64