05.03.09 Govt poised to axe milk monopoly
Source: Bangkok Post
System riddled with graft, officials told
The government has agreed to a proposal to scrap the school milk supply
zoning system as part of a plan to revamp the scandal-plagued
distribution programme.
Deputy Prime Minister Korbsak Sabhavasu said the Industry Ministry
had been told to check 71 milk production plants, some of which had
been found to be below standard, while the Food and Drug Administration
would check the quality of milk.
The milk supply zoning and monopoly system has been blamed for
preventing free competition among milk producers. This, in turn,
resulted in the distribution of substandard milk to schools.
The government yesterday convened a crisis meeting attended by staff
from six ministries to solve the problem of substandard school milk.
The meeting included the Agriculture and Cooperatives, Interior, Education and Industry ministries.
Details of the meeting and the proposal were submitted to Prime Minister Abhisit Vejjajiva.
Earlier, Tharit Pengdit, secretary-general of the Public Sector
Anti-Corruption Commission, said a cabinet resolution on Nov 26, 2003,
had allowed milk suppliers to create monopolies in designated zones.
The monopolies paved the way for graft. Thaksin Shinawatra was prime minister when the decision was taken.
Mr Korbsak said the government would consider revoking the contracts
of those found to have produced substandard milk and would revise the
school milk distribution and production system.
He said some slight adjustments would be made to the milk programme
with more cartons of UHT milk to be produced and distributed to
students. The UHT milk project requires a budget of more than 2 billion
baht.
Seventy percent of school milk is pasteurised and the rest UHT, which has a longer shelf life, Mr Korbsak said.
He said packet milk tended to curdle easily, particularly during the storage and transport stages.
A major school milk supplier in the South yesterday told the House
Committee on Legal Affairs, Justice and Human Rights he had evaded tax.
Democrat list MP Suwaroj Phalang, the committee's adviser, said
Charoen Dejkerd admitted he had not paid tax for the past two years.
Mr Charoen testified during the house committee meeting on
substandard school milk, attended by representatives of agencies
including local administrative organisations, the Revenue Department
and the Department of Special Investigation.
Mr Suwaroj said Mr Charoen told the committee he had entered a
10-year joint venture arrangement with Chumphon College of Agriculture
and Technology.
He said he had invested in the construction of a milk processing
plant and other related facilities. Raw milk was supplied by the
Nongpho dairy cooperative in Ratchaburi.
The college was only responsible for processing and packaging milk.
When processed milk was delivered to schools, tambon administration
organisations, which were responsible for purchasing milk, made cheques
payable to the college.
Mr Charoen would then collect his share of the money from the college, Mr Suwaroj said.
He said Mr Charoen admitted he had not paid taxes and the college did not deduct withholding tax from his income.
The median price for school milk was 5-6 baht per packet.
Mr Charoen said the college received 12 satang per packet while he took the rest.
Mr Charoen told the committee he had made similar joint venture
arrangements with Rajamangala University of Technology Srivijaya in
Nakhon Si Thammarat and Songkhla College of Agriculture and Technology.
Mr Suwaroj said the amount of unpaid taxes over the past two years could top a billion baht.
Tax inspectors will handle the alleged tax evasion while the House
committee will continue to investigate corruption in the milk
programme, Mr Suwaroj said.
Wisawa Kongkaew, director of the Chumphon College of Agriculture and
Technology, said the milk plant at the college would close following
heavy criticism, even though he insisted there had never been any
complaints about the milk produced by the college.
Puea Thai MP for Samut Prakan Pracha Prasopdee, who heads the House
panel, said information from the Customs Department showed there had
been more imports of skimmed milk powder than necessary.
The imports had far exceeded the local demand for skimmed milk powder for use as animal feed.
Mr Pracha suspected the excessive imports could be used to make the substandard school milk.
DSI deputy director-general Suchart Wong-anantachai said those
involved in the school milk scandal could face charges of breaching the
anti-price collusion law.
The House panel has asked the DSI to trace the money trail of those
involved in bidding for the school milk project and to investigate the
transactions of the 68 milk suppliers.
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