Research On Raw Milk Production And Diary Industrial Integration Of China

Raw milk supply is closely related to the interests of dairy farmers, and the quality and safetyof dairy products. The integration of dairy industry, especially the raw milk supply chain, is an efficientway to ensure an equitable distribution of benefits of dairy farmers, and a coordinated development ofthe process from production, processing to sales.This thesis firstly compares the differences in characteristics of the raw milk production, such asyield, technology, and policy, etc. among different countries, by reviewing the status of dairy industry inChina and rest of the world.Secondly, an income model for the dairy farmers is built to analyze their production behaviors byusing the dairy monitoring data from2008to2010in seven provinces of China, and a formula of theoptimal ratio of non-dairy cow(with ages of less than27months’ old) is derived from this model. Thesolution of this model also tells the dairy farmers how to adjust their production structure to maximizetheir income given some changes in market. The main findings from the model are:-Given the current productivity level and market prices, the rational breeding ratio of the non-dairycow (with ages of less than27months’ old) for dairy farmers is roughly among the10%to20%.-From an economic point of view, the current dairy breeding structure is irrational. The currentpercentage of the non-dairy cow (with ages of less than27months’ old) is too high.-Under the condition of the family labor and average size of living room,10to20heads per familyis an economic rational choice for backyard breeding.Thirdly, how the raw milk production processes are integrated into whole diary industry is discussed.5modes of China’s diary industry chain,3patterns of dairy integration are checked. The three patternsare: dairy farming cooperative organization, dairy farming under enterprises, and dairy farming linkingto enterprises. The findings are:-Dairy farmer cooperative organization is of the most advantage to achieve the balance between theaim of industrial integration and diary farmers’ benefit protection.-Some improvement has to be made in the patterns of dairy farming under enterprises and dairyfarming linking to enterprises in order to protect dairy farmer’s interest, such as to increase thedegree of dairy farming organization and to enforce the implementation the contact between dairyfarmer and enterprise.Finally, policy suggestions, based on the research conclusions, are given in terms of dairy farmer’sinterest protection, integration of dairy industry, and the roles of the government playing in theprotection of dairy farmer’s interest and integration of dairy industry. The main suggestions include:-Through integrated development of dairy industry to protect dairy farmer’s interest and to help themin production transformation.-Risk prevention for dairy farmers in individual production mode by: combination of agriculturalproduction and dairy production; encouraging development of dairy processing in family;adjustment of production structure to protect dairy farmers from market risk.-Enhancement of dairy production organization through the integrative development of dairy industry.-Subsidized loan to dairy farming, high priority to the examination and approval of land use for thedevelopment of dairy processing, and subsidy in purchasing equipment for dairy processing.-Enhancement of the role of the government in the integration of dairy industry by: financial supportto promote the integrating process; legal support to protect dairy farmer’s interest; policy support tohelp dairy farmer’s production transformation.