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by Chiot’s Run

China's raw milk price formation and regulation of Mode

Raw milk price stability related to China’s dairy industry development plan, also related to the thousands of dairy processing enterprises in the survival and development, the livelihoods of millions of farmers and hundreds of millions of consumers, the cost of living and life. As of the end of 2007, the national dairy herds of about 14.7 million, raising approximately 2.1 million dairy farmers, dairy industry output value reached 67.3 billion yuan, formed a professional and complete, and reasonable system of supporting China’s dairy industry. Therefore, the establishment of effective prices of our raw milk mechanism of the formation and regulation is particularly urgent, it not only to businesses, farmers and consumers the benefits of doubling, but also help build better, more scientific system of China’s dairy industry.

Our need for raw milk price-control over fluctuations in raw milk prices. Since the second half of 2008, subject to Melamine Events, Mengniu Telun Su

OMP milk incident, the global financial crisis and the impact of cheap imports of raw milk, raw milk of domestic dairy enterprises weak demand, a direct result of China’s major milk producing areas in North 10 raw milk price decline. Department of Agriculture data show that in 2009 16 weeks to 19 weeks, 10 provinces average price of raw milk per kg 2.41 yuan, down 14.07%. At the same time, the Chinese dairy Feed Prices stable and active up, Cow deteriorating efficiency, accounting for more than half of the milk production of dairy farmers facing dispersed more and more severe situation.

Raw milk prices fluctuate too much cause great damage to the interests of the farmers. February 12, 2009, Xinjiang An’ningqu rural town of 40 dairy farmers had to be conscripted as the life of the cow slaughtered slaughterhouse in order to reduce the unsustainable financial losses. It is understood that the issue since 2008, milk powder incident, and the financial crisis, the increasing cost of dairy farming, while the milk purchase prices are getting low, the lowest it has fallen below 1.1 yuan per kilogram, and the amount of dairy companies buy milk less and less, for which more than 200 families in this region in order to sell milk and milk-dependent households are drained every day and nearly 20 tons of milk, dairy farmers are overburdened, under the helpless will have pain led to the slaughter their own cow slaughter, to reduce losses. Shijiazhuang, Hebei, for example, if the current feed prices and by raising the cost to measure, farmers pay the price of milk to more than 2.4 yuan per kilogram, there should be profit, at least should not lose money, if the milk price to 2.6 per kg Yuan, the profits that Dairy quite good. However, dairy farming in China more than a small scale backyard mainly due to extensive management, rational use of forage to concentrate feed can not be other reasons, resulting in low yields in dairy cows, high cost dairy farmers pay the price of milk higher than the professional Ranch Exchange milk prices to remain high number of returns.

Fluctuations in raw milk prices to consumers over the interests of the serious damage. In the current situation of China’s dairy industry development, raw milk prices are too high or too low on the negative effects caused by the interests of consumers. When the high price of raw milk and dairy prices will certainly rise, but because of interest due to increasing production output of raw milk tend to bring lower quality to consumers the cost and quality and safety impacts. When raw milk prices low, farmers are not profitable to sell cattle slaughter of cattle appears the phenomenon, in turn causing the shortage of milk, dairy prices. Since the second half of this year, Erie Adult milk powder prices have climbed 15%, Wanda milk prices rose 20% across the board, while Ashley milk prices across the board intends to increase 15% in the near future. Influencing the original key elements of milk price fluctuations

Lag the national policies and regulations, can only play the role of ex post regulation, and often are temporary measures of macroeconomic policy and there is no quantifiable specific implementation plan and an independent third party oversight body. Melamine incident in the year, the State Council have issued a “dairy quality and safety supervision and management regulations” and “Milk Program for reorganization and revitalization of the” two laws, the Ministry of Finance has issued a “central government subsidies for aquaculture insurance premiums Management Measures “,” key areas on a really good job especially difficult to inform the work of farmers temporary relief, “” raw milk acquisition of discount loans to the central financial management “and so on. These policies and regulations are generally more macro or temporary subsidies and relief measures, although many of the feasibility of measures, but there is no quantifiable standards and independent third party to oversee the policy is really more difficult to implement at the grassroots level the.

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