China’s Low Capital Dairy Farmers

I got into a discussion the other night about China’s milk scandal. I was arguing that China’s dairy farmers were unlikely to be responsible for the contamination of the milk. As best as I understand it, China’s Dairy farm’s are all small low budget affairs. In my view, the types of people who run those farms are unlikely to have the accesses to melamine or have the kind of knowledge that it takes to understand how to use melamine to fool milk testing equipment.

This article from the New York Times strengthens my view. Especially this part….

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.

In the first place this shows how poor China’s dairy farmers are. They don’t even own their own milking equipment. In the second place, it makes hard to understand how the farmers could have contaminated their own milk when they sold the milk straight from the cow to the company.

If the article is to be believed, third parity milking stations are quite common in China.

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