China’s Dairy Farmers Say They Are Victims
SHIJIAZHUANG, China — At a dairy farming village on the outskirts of this northern city, a group of residents surrounded a village official last week, and started berating him.
“We’ve lost everything, but look at the nice car you have,” one dairy farmer said, pointing at a government official they called Mr. Wang, who stood uncomfortably by a shiny Volkswagen in Nantongyi village.
“You know everything, but you won’t talk. You have no conscience!” another man shouted.
China’s dairy farmers stand accused of adulterating their milk for profit in China’s worst food safety crisis in decades. But farmers say they, too, are the victims of a widening scandal that has sickened 53,000 babies, caused at least four deaths and set off an international recall of dairy products.
“I’m desperate,” said Jie Cun’ai, 66, who with his son cares for 56 cows. “I’m one of the biggest losers in this village. The provincial television station says our government will take care of us, that they won’t let us kill our cows or dump our milk. But they are lying. For 10 days, we’ve been dumping our milk.”
Indeed, few in China or abroad will buy milk, infant formula or other dairy products since tests have found that more than 20 companies were selling products contaminated with an industrial chemical, melamine, which can cause kidney failure or kidney stones.
The dairy farming villages around Shijiazhuang came under sharp scrutiny last month after investigators arrested dozens of farmers and milk station operators for spiking milk with melamine, which if blended into food can artificially inflate protein readings, helping it pass quality tests.
But dairy farmers here insist that they never used melamine, and that the real culprits are dairy companies and the milking stations that they operate. They also complain that they have been squeezed by the price controls on food that went into effect last year, which may have created incentives among some farmers and big companies to dilute milk and use chemical substitutes.
Regulatory loopholes and corruption are believed to be part of the problem. Many dairy farmers in the region said bribery was common at milking stations. And dairy experts say local regulators are also known to take bribes or favor companies that are partly owned by a local government entity, which sometimes means that the regulator and the regulated are virtually one and the same.
The government acted last month to try to stem the crisis, raiding dairy farms and milking stations, dismissing regulators and high-ranking party officials and vowing to overhaul the country’s $18 billion dairy industry.
The Sanlu Group, based in Shijiazhuang, helped set off the milk scandal by announcing last month that some of its infant milk formula was contaminated with melamine. Sanlu’s decision to lower its prices this year was the first blow to local farmers, many of whom took out huge loans to purchase cows just two or three years ago and moved here to work as dairy farmers.
Sanlu and other major dairy companies were responding to government price controls that were supposed to help fight inflation and rising food costs around the nation. But here in Hebei Province, the policy hurt farmers who were already struggling to cope with soaring animal feed costs, driven up by a global surge in grain prices.
“Before the scandal, the milk station kept lowering the price, but feed costs had gone up a lot,” said Liu Jin Feng, who with her husband raises 16 cows in nearby Xinnancheng village. “The price of soy meal went up 60 percent over the past two years.”
“There was nothing we could do about price because Sanlu has a monopoly here,” said Guo Huanchen, a 35-year-old farmer who said he was now considering selling his cows to a slaughterhouse. “I think they kept offering a low price because they had no competitor. But now we are suffering.”
Sanlu, which is 43 percent owned by the New Zealand-based Fonterra Group, one of the world’s largest dairy companies, controls the only milk station in Nantongyi village, giving it monopoly pricing power in the area. Every day farmers guide their cows to the village milking station, pump milk directly into the station tanks and then return home, waiting to hear how much they will earn, if their milk passes quality inspections.
These days, though, they milk their cows at the station and then have the milk handed back to them. Because there is simply too much milk, they dump it into drainage ditches or into a cabbage garden near the milking station.
And farmers say that the milk dealers who aggregate milk supplies and sell them to big dairy producers had much more opportunity to add melamine. “We have no way to adulterate our milk,” said Shi, a 38-year-old dairy farmer in Nantongyi, noting that village cows went directly to the milking station, where they are milked by machine. “I think it’s Sanlu and the milking station that blend.”
Sanlu officials repeatedly declined to respond to questions for this article. They have blamed farmers and milking stations for tampering with supplies.
Adulterating milk, of course, is hardly unknown in China. For years, experts say rice porridge, starch and other chemicals have been used to doctor diluted milk to earn extra profits. In 2004, at least 14 children died in a poor area of Anhui Province after consuming what the government later determined was a fake baby formula. The case shocked the nation and led to government calls for sweeping reform.
Dairy experts, however, say regulations still have not caught up with industry con men.
Zhang Guonong, who teaches at Jiangnan University’s School of Food Science and Technology in Jiangsu Province, says the 1986 code regulating the quality of milk is outdated and that he and other experts have called for revisions to the code to help combat widespread fraud in the industry.
“In 2004, I was one of the drafters of the China Dairy Products Quality Inspection report,” he said in a telephone interview. “I found adulteration is extremely widespread: urea, soap powder, starch are very popular additives.” He added: “We suggested new inspection methods targeted on these additives should be written into the regulation. But on the other hand, we fear that once these were written into the regulation, more dairymakers would know these tricks, or even innovate by creating new tricks.”
Dairy experts say that the milk scandal may finally spur the government to heed their calls for change. “The problem was and still is that anyone can become a dairy supplier, and anyone can own or invest in third-party dairy stations,” said Xiang Zhikong, an agricultural economist at Renmin University in Beijing. “There are no licensing requirements or any other sort of quality regulatory standards.”
Nor is melamine the only problem facing farmers near Shijiazhuang. At milking stations in Nantongyi, recent government inspections have also found high levels of antibiotic residues.
Once again, farmers blamed the Sanlu Group, which helped establish the dairy village with the local government several years ago and now controls all injections in the village, according to farmers.
“Now, they say our milk is not qualified, that it has too much antibiotics,” said Mr. Shi, who has eight cows. “But before, Sanlu never rejected our milk. So I think clearly they knew, and in order to meet demand they boosted production.”
Many farmers now say they are facing bankruptcy, and their anger is spilling out into the open with farmers scolding village officials and complaining that the government is not doing enough to help them survive.
Worried about unrest in dairy farming villages, government officials have been brought in to restore calm. In Nantongyi, government officials interrupted several interviews, and then pressed villagers not to talk to reporters. At one point, a pair of women were even dispatched on bicycles to follow journalists around the village. They later apologized to a journalist for having to do so.
In one village, the government even managed to silence some dairy farmers who were complaining bitterly about their plight. Under pressure from government officials in the village, a dairy farmer tried to shush his angry wife and shouted out, “I believe the Communist Party, and under the excellent leadership of the Communist Party I have a right to refuse your interview.”
His wife, though, continued to complain.