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January 12, 2015

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Ministry steps in to help beleaguered dairy farmers

CHINA’S Ministry of Agriculture says it is to help dairy farmers in northern areas who have resorted to throwing out milk and killing their cows through a lack of sales avenues.

The ministry is encouraging dairy firms to increase purchasing and will start monitoring production on a weekly basis while strengthening policy support, it said in a statement.

It had talked to major dairy firms and urged them to purchase more milk, stabilize prices and safeguard dairy farmers’ interests.

The ministry will work with other government departments, including the Ministry of Finance, to map out more supportive policies to help dairy farmers overcome their plight, it said.

“A ton of milk has to be discarded each day,” Pei Shuke, a farmer in east China’s Shandong Province, said. “This desperate thing rarely happened before.”

Similar cases have been noted in other major milk-producing areas in China, including Hebei and Inner Mongolia. A decline in milk prices since the second half of 2014 have pushed many dairy farmers to desperation.

Milk prices fell for 10 consecutive months from February last year. In the first three quarters of last year, they fell to 3.84 yuan (61 US cents) per kilogram from 4.26 yuan, and the trend showed no signs of stopping in the last quarter.

The dairy downturn has come as a surprise to many. In late 2013, China’s dairy products saw prices rise following a production decrease caused by disease and farmers leaving the industry. Milk prices jumped to more than 5 yuan per kilogram in December 2013 from 3.4 yuan a year earlier.

The dairy boom sent ripples of excitement through the sector, with farmers purchasing large numbers of dairy cows at high prices to boost production.

But the boom proved temporary. In March last year, foreign milk prices began to fall due to overproduction and many dairy companies bought overseas.




 

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