To develop the dairy industry, we must hold the milk bottle in our own hands
A cup of milk strengthens a nation, and the development of the dairy industry is closely tied to every citizen. However, the 2008 melamine incident dealt a major blow to China's dairy industry. Learning from the painful lesson, the industry was reborn from the ashes. After 8 years of arduous effort, China's dairy industry has achieved leapfrog development, the quality and safety of dairy products is at its best level in history, and the integrated development of the dairy industry has begun to show results. Facing enormous market potential, the national dairy industry has great prospects——
China's dairy industry is an industry that affects all levels and links urban and rural areas. Upstream are more than 1.5 million dairy farming households, midstream are 638 large-scale dairy enterprises, and downstream involves almost every family, especially infant formula, which carries the love of every parent. After 2008, China's dairy industry gradually began to make efforts in top-level policy design, milk source quality assurance, and industrial transformation and upgrading, embarking on the road to revitalization.
"After 8 years of effort, China's dairy industry has achieved leapfrog development. At present, the quality and safety level is at its best in history. We are confident that within 5 to 10 years, we will strive to bring dairy product quality to the internationally advanced level by 2020, and to enter the ranks of the world's dairy powers as a whole by 2025, achieving the goal of dairy industry revitalization and development, and holding the 'milk bottle' firmly in our own hands." said Han Changfu, Minister of Agriculture.
Policy and funding make efforts simultaneously
In October 2008, China's first dairy industry regulation——the "Regulations on the Supervision and Administration of Dairy Product Quality and Safety"——was officially issued, marking the beginning of strengthening top-level design and comprehensively rectifying the dairy industry. Over several years, normative documents for China's dairy industry appeared in the public eye with extremely high frequency. Among them, infant formula milk powder was always the top priority in dairy industry management. The state twice re-examined the production licenses of dairy product and infant formula milk powder enterprises, eliminated a batch of enterprises with no guaranteed milk source and backward production technology, and tightened systems such as factory raw material testing, production process testing, and batch-by-batch finished product testing for dairy enterprises.
At the same time, a series of substantial financial subsidies entered the dairy industry sector one after another. From 2008 to 2015, China's dairy industry support funds mainly focused on dairy cattle improved breed subsidies, large-scale dairy cattle farming, high-yield and high-quality alfalfa demonstration creation, and dairy cattle performance testing, covering the entire production chain, with a total investment of 8.66 billion yuan in support funds.
Policy and funding gradually showed their driving force. In 2015, the proportion of large-scale dairy cattle farming nationwide approached 50%, increasing by about 4 percentage points per year on average; more than 70% of dairy farms adopted total mixed rations, and a production system with large-scale dairy farms and medium- and high-yield dairy herds as the main body was initially formed; mechanized milking and cold-chain storage and transportation were fully realized, driving revolutionary changes in the quality and safety of China's dairy industry.
"Affected by the infant formula incident, the market share of imported milk powder in China once reached 75%; but the latest data show that the market share of domestic milk powder has gradually recovered to more than 50%." said Wei Lihua, President of Hebei Shijiazhuang Junlebao Dairy Co., Ltd.
Report card after report card of international recognition writes the story of China's dairy brands rising again. Yili and Mengniu entered the world's top 20 dairy companies; Junlebao infant formula passed the Global Food Safety Standard A+ top certification and has entered the Hong Kong, China market; Modern Farming and Feihe Dairy won gold awards at the World Food Quality Evaluation Conference. "We can clearly feel that consumer confidence is recovering." said Gao Lina, Chairwoman of Modern Farming.
Strict supervision requires even stronger self-discipline
The recently released "China Dairy Quality Report" shows that the pass rate for random inspections of prohibited additives in raw milk in China has remained at 100% for 7 consecutive years. In 2015, the average values of milk protein rate and milk fat rate, which mark dairy product quality, reached 3.14% and 3.69% respectively, higher than China's "Raw Milk" national standard by 0.34 and 0.59 percentage points respectively. The total bacterial count was far below the national standard, and the main quality and hygiene indicators reached the level of developed countries.
"These key indicators mark a significant improvement in the quality and safety level of dairy products. Since 2009, we have led 43 quality inspection institutions nationwide to implement the national raw milk quality and safety monitoring plan, with random inspections covering all milk stations nationwide, testing indicators covering all prohibited additives, and monitoring covering all raw milk purchasing stations and raw milk transport vehicles nationwide, monitoring 10 indicators including melamine and total bacterial count." said Wang Jiaqi, Director of the Quality Supervision, Inspection and Testing Center for Milk and Dairy Products of the Ministry of Agriculture. A rigorous regulatory system for the entire dairy industry chain has been completed.
Enterprise-based management and large-scale pastures have natural advantages for quality control. But China is in a critical period of modernizing its dairy industry, and there are many small and medium-sized farms and households. These farms and households have relatively weak management and a low degree of social organization. How can milk source quality be controlled?
Sun Guoqiang, President of Zhongding Dairy, introduced that the company adopts a "company + base + farmers" "stock integration, full-process trusteeship" model, using large enterprises to drive the integration of small and medium-sized pastures, cooperating with dairy farmers, and controlling the quality of small and medium-sized pastures. At present, through entrustment, contracting, and technology export, Zhongding Dairy has taken more than 140 pastures under trusteeship, spread across 15 provinces and cities nationwide, involving 100,000 dairy cows and radiating benefits to more than 3,000 farming households.
"We equip small and medium-sized pastures with dedicated nutritionists, feed formulators, and veterinarians to meet their needs in nutrition, feeding, breeding, and other aspects. Professional feeding methods have greatly improved milk quality. The somatic cell count of dairy cows in Zhongding trusteeship pastures is below 200,000 per milliliter, far below the EU and New Zealand indicator requirement of below 400,000." said Sun Guoqiang.
Transformation and upgrading revitalize the dairy industry
To revitalize the dairy industry, transformation and upgrading are necessary. Li Shengli, Chief Scientist of the National Dairy Cattle Industry Technology System, introduced that due to the strong implementation of strict management policies and the gradual standardization of the market, in 2015, the proportion of standardized large-scale farming of dairy cows with more than 100 head in China reached 48.3%, 28.8 percentage points higher than in 2008, and milk sources from large-scale pastures accounted for more than 60%. This farming pattern is conducive to the transformation and upgrading of the industry.
The past pains brought about the rapid advancement of dairy industry integration. Gu Jicheng, Vice President of the China Dairy Association, said that the construction of dairy industry integration must realize the integration of "planting, breeding, and processing" and the integration of "production, processing, and sales." Only through integration can a close interest linkage mechanism be truly established, thereby achieving more controllable quantity and quality. This can fundamentally resolve the contradictions of the traditional dairy industry being "small, scattered, low, and poor."
At present, China has begun to achieve results in promoting dairy industry integration. In 2015, the proportion of milk source bases built by dairy enterprises themselves or in which they held shares nationwide exceeded 20%, nearly tripling compared with 2008. For example, Huishan Dairy and Modern Farming each had around 200,000 dairy cows in stock, with alfalfa planting areas of more than 100,000 mu each, and all milk sources self-supplied, becoming models of farming giants and integration. At the same time, there were 15,100 specialized dairy farmer production cooperatives nationwide, 6.2 times more than in 2008, and the professional capabilities of dairy farmers improved significantly.
Gao Hongbin, President of the China Dairy Association, believes that under the new normal, the goal of dairy industry development is not an increase in quantity or expansion of scale, but improvement in quality. Modern science and technology, material equipment, development concepts, business methods, and industrial organization should be used to reform the traditional industry, reduce costs, improve efficiency, and enhance competitiveness.
"The revitalization of China's dairy industry is highly promising." Han Changfu said that China's dairy industry is ushering in good opportunities. At present, China's per capita dairy consumption is only one-third of the world average and one-half of that of developing countries. In the future, as income increases, population grows, and urbanization level rises, especially after the full opening of the two-child policy, consumer demand for dairy products will continue to increase. Enormous market potential means the national dairy industry has great prospects.