An Empirical Study On The Effect Of Regulation Of China’s Dairy Industry

With the development of economy and the improvement of people’s living standards, consumer demand for dairy products showed rapid growth trend. In this context, the dairy industry develop rapidly,the dairy production increase rapidly at an average growth rate of two digit annual. In 2000, China’s dairy production is only 820000 tons,while in 2014 has reached 26510000 tons,2014’s dairy production is 30 times more than 2000’s. In the process of rapid development, quality and safety problems occur, such as the melamine incident in2008, Yili milk mercury exceed the standard event in 2012, tampering with the shelf life of Ozmilko milk in 2014. Security problems of dairy products reflects the contradictions and conflicts during the period of economic transformation between various stakeholders, so to strengthen the dairy products safety regulation, to improve the current situation of the safety of dairy products, to reduce the occurrence of safety accidents of dairy products has become the people’s urgent demand and the focus of government supervision departments.Occurrence of the safety of dairy products is one problem of market failure, and the transaction information asymmetry lead to market failure, dairy producers and sellers have more information than consumers, consumers can not judge the quality of the goods from the surface. In addition, the dairy safety problem also reflects the absence of government supervision and management departments, there is no effective supervision and management system, the legal framework is not perfect, although the government did a lot of work in the aspects of dairy products supervision,, but there is still a certain gap with the demands of consumers.This paper uses 2000-2014’s data of dairy industry. First, I analysis the current situation of dairy industry and its regulation, finding out the existing problems and shortcomings, and then make output of dairy products, dairy products industry profit level, sampling qualified rate as effect indicators in regulation, then establish the model of regulation effect evaluation, from total, profit and quality three aspects exam the regulation effect of the government in the dairy industry, to explore the impact of government regulation on dairy industry. Empirical analysis shows that, in terms of profits of the government regulation, it enhance the industry profit level overall and play a positive role, but it did not play a significant role in improving the quality and production of dairy products. Finally, according to the empirical results, put forward policy recommendations to improve the effect of government regulation in the dairy industry, to provide a reference value for the future development of government regulation policy.