Feed millers on the island of Luzon in the Philippines are engaged in technical smuggling of imported wheat and soybeans through undervalued and wrongly declared goods, said government representative Faustino Dy III.
“Clamp down on feed millers engaged in technical smuggling,” Rep. Faustino Dy III, 3rd district of this province, urged.
A tightened noose over the feed millers will eventually earn the national government more revenue, he added.
According to information obtained by Dy certain feed millers feed millers import wheat and declare such as for human consumption instead of animal feeds use. This way they only pay the 3% import tax instead of 7% for feed wheat importation.
Dy said the executive department should closely watch some people at the Bureau of Customs and the Bureau of Internal Revenue who are allegedly in collaboration with the importers and traders.
Negative effects for corn farmers
The tax dodging has also its effect on the price of other commodities. Massive wheat importation has affected the buying price of yellow corn in the country as feed millers, who also buy corn, usually dictate the buying price.
Corn farmers have been harvesting an average of 800,000 tonnes of yellow corn in Isabela for several years now.
However when feed millers can import soybeans and feed wheat duty-free this will have a prejudicial impact on the interest of corn farmers.
“Crooked feed millers abuse the duty-free importation of some agricultural inputs. Because of lower tariff on said farm commodities, traders and importers would rather buy imported wheat and soy as substitutes to corn in the manufacturing of animal feeds. This is very detrimental to corn farmers,” Dy added.
He said there is a need for amendments to the Agriculture and Fisheries Modernization Act (AFMA) when it comes to duty-free importation, because it tends to adversely affect the lives of small farmers while favouring some importers and traders.