Opinions on Promoting the Revitalisation of the Dairy Industry and Ensuring Dairy Quality and Food Safety

Document No.: Guobanfa [2018] 43

Issuing Authority: General Office of the State Council

Date: 3 June 2018 / Published: 11 June 2018

To the people’s governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries, commissions, and directly affiliated agencies of the State Council:

The dairy industry is an indispensable sector for building a healthy China and strengthening the nation. It is a representative industry for food safety, a hallmark industry for agricultural modernisation, and a strategic industry for the coordinated development of the primary, secondary, and tertiary industries. In recent years, the scale, standardisation, mechanisation, and organisation of China’s dairy industry have improved significantly; leading enterprises have grown in strength; brand-building efforts have advanced steadily; quality supervision has been continuously strengthened; and the overall quality of the industry has risen progressively, making a positive contribution to ensuring dairy supply and increasing dairy farmers’ incomes. Nevertheless, outstanding problems persist, including an imbalance between product supply and demand structure, insufficient industrial competitiveness, and inadequate consumer cultivation. In order to promote the revitalisation of the dairy industry, ensure dairy quality and food safety, boost public confidence in domestically produced dairy products, and further enhance the competitiveness of the dairy industry—and with the approval of the State Council—the following opinions are hereby set forth.

I. General Requirements

(1) Guiding Principles. In accordance with the guiding principles of the 19th National Congress of the Communist Party of China and the Second and Third Plenary Sessions of the 19th CPC Central Committee, under the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and acting upon the decisions and plans of the CPC Central Committee and the State Council, we shall coordinate the advancement of the “Five-Sphere Integrated Plan” and the “Four-Pronged Comprehensive Strategy,” resolutely implement the new development philosophy, pursue high-quality development, take the implementation of the rural revitalisation strategy as our guide, set quality, safety, and green development as our objectives, take the advancement of supply-side structural reform as our main task, focus on reducing costs, optimising structure, improving quality, building brands, and enhancing vitality, and strengthen standards and regulations, technological innovation, policy support, law enforcement and supervision, and consumer cultivation. We shall accelerate the establishment of a modern dairy industrial system, production system, business system, and quality and safety system; continuously improve the quality, efficiency, and competitiveness of dairy industry development; vigorously advance dairy industry modernisation; build up and strengthen the domestic dairy industry; and provide strong support for securing a decisive victory in building a moderately prosperous society in all respects.

(2) Basic Principles.

Innovation-driven, green development. We shall strengthen technological innovation, promote reform of the management system, advance cost reduction and efficiency gains, and improve the comprehensive production capacity of the dairy industry. Suiting measures to local conditions, we shall pursue rational layout, integrate crop farming and animal husbandry, and match forage with livestock to promote the resource utilisation of livestock waste and drive the coordinated development of dairy production and the ecological environment.

Interest linkage, shared benefits and win-win outcomes. We shall adhere to the development orientation of industrial integration, extend the industrial chain, establish a stable interest linkage mechanism between dairy farmers and dairy enterprises, promote the formation of an industrial pattern in which risks are shared and benefits are shared, enhance the ability of dairy farmers to withstand market risks, and achieve the coordinated development of the primary, secondary, and tertiary industries.

Problem-oriented, targeted breakthroughs. Addressing the current problems of unbalanced and inadequate development in the dairy industry, we shall take key links and critical difficulties as our breakthrough points, focus on improving the quality and efficiency of the dairy supply system, raise the level of dairy quality and safety, and better adapt to changes in the overall scale and structure of consumer demand.

Market-led, government-supported. We shall properly manage the relationship between government and the market, give full play to the decisive role of the market in resource allocation, strengthen the role of dairy enterprises as market entities, optimise resource allocation, and enhance development vitality. We shall better leverage the government’s role in macro regulation, policy guidance, support and protection, and supervision and management, and safeguard a fair and orderly market environment.

(3) Main Objectives. By 2020, substantive progress shall be achieved in supply-side structural reform in the dairy industry, and noticeable advances shall be made in the modernisation of the dairy industry. The comprehensive production capacity of the dairy industry shall be substantially enhanced, the proportion of large-scale dairy farming with herds of 100 head or more shall exceed 65 per cent, and the self-sufficiency rate of raw milk supply shall be maintained at 70 per cent or above. The industrial structure and product structure shall be further optimised; the quality, competitiveness, and reputation of domestically produced infant formula milk powder shall be markedly improved; and dairy supply and consumer demand shall become more closely aligned. The level of dairy quality and safety shall be substantially raised, the qualified rate of product supervision and inspection sampling shall reach 99 per cent or above, and consumer confidence shall be significantly strengthened. Dairy production and ecological development shall advance in tandem, and the comprehensive utilisation rate of livestock waste shall reach 75 per cent or above. By 2025, the dairy industry shall achieve comprehensive revitalisation and basically realise modernisation, with the overall levels of raw milk base construction, product processing, dairy quality, and industrial competitiveness entering the ranks of the world’s advanced economies.

II. Strengthening the Construction of High-Quality Raw Milk Bases

(4) Optimising and Adjusting Raw Milk Source Layout. We shall highlight key areas, consolidate and develop the Northeast and Inner Mongolia production zone, the North China and Central Plains production zone, and the Northwest production zone, and build China’s “golden dairy belt.” We shall actively develop the southern production zone and stabilise production in the areas surrounding large cities. We shall focus on the production of high-yielding dairy cattle breeds such as Holstein cattle, while actively developing other dairy animal production including dual-purpose beef and dairy cattle, water buffalo, and dairy goats, so as to further diversify the raw milk source structure.

(5) Developing Standardised Large-Scale Dairy Farming. We shall carry out demonstration programmes for standardised dairy cattle farming, support the upgrading and expansion of dairy farms, the conversion of small dairy zones into ranch-style operations, and the development of family-run ranches, and guide appropriately scaled farming operations. We shall support major dairy-farming counties in advancing the integration of crop farming and animal husbandry on a county-wide basis and developing ecological farming. We shall promote the application of Internet of Things and intelligent equipment and facilities on dairy farms to raise the level of mechanisation, informatisation, and intelligent management of dairy farming. We shall strengthen prevention and control of foot-and-mouth disease in dairy cattle and the surveillance and eradication of brucellosis and tuberculosis, and improve the prevention and treatment of common diseases in dairy cattle.

(6) Strengthening Breed Improvement and Extension. We shall establish a national dairy cattle breeding database and genetic evaluation platform, improve the sire quality assessment system, and build a modern dairy cattle genetic improvement technical system and organisational management system. We shall expand the scope of dairy cattle performance testing and accelerate the application of genomic selection technology. We shall support the development of dairy cattle breeding alliances and jointly carry out progeny testing of young bulls. We shall vigorously introduce and breed high-quality dairy cattle, build high-yielding dairy cattle core breeding herds, and establish a number of national core breeding farms. We shall increase efforts to promote improved breeds, raise the level of breed improvement, and increase dairy cattle milk yield per head.

(7) Promoting the Production of High-Quality Feed and Forage. We shall advance the coordinated integration of feed and forage cultivation with dairy cattle farming, ensure the local and nearby supply of feed and forage, and realise the cyclic development of agriculture and animal husbandry. We shall build high-yield, high-quality alfalfa demonstration bases, improve the quality of alfalfa products, and strive to achieve a self-sufficiency rate of 80 per cent for high-quality alfalfa by 2020. We shall promote the conversion of grain crops to forage crops, develop the high-quality feed and forage industries such as silage corn and oat hay, advance the specialisation of feed and forage varieties, the scaling of production, and the marketisation of sales, and comprehensively raise planting returns, dairy cattle production efficiency, and farming profitability.

III. Improving the Dairy Product Processing and Distribution System

(8) Optimising the Structure of Dairy Products. We shall coordinate the development of liquid dairy products and dry dairy products. In line with local conditions, we shall develop liquid dairy products such as sterilised milk, pasteurised milk, and fermented milk; support the development of dry dairy products such as cheese, whey powder, and butter; and increase the production of functional milk powders and flavoured milk powders. We shall encourage the use of raw milk in the production of sterilised milk, fermented milk, modified milk, and other dairy products.

(9) Raising the Competitiveness of Dairy Enterprises. We shall guide dairy enterprises in matching their distribution with the layout of raw milk bases and in coordinating production. We shall encourage mergers and reorganisation among enterprises, raise industrial concentration, and foster dairy enterprises with international influence and competitiveness. We shall, in accordance with the law, phase out production capacity that fails to meet standards in technology, energy consumption, environmental protection, quality, and safety, so as to strengthen and upgrade the dairy processing industry. We shall support enterprises in product innovation and R&D, optimise processing techniques, improve quality and safety management systems, enhance operational management capabilities, reduce production costs, and improve product quality and profitability. We shall support the development of the whole dairy industry chain, promote the division of labour and organic linkage among all links of the chain, and effectively control risks.

(10) Establishing a Modern Dairy Product Distribution System. We shall develop smart logistics and distribution, encourage the construction of information-based dairy product distribution platforms, support the consolidation of last-mile distribution outlets, and reduce distribution costs. We shall promote the integration of dairy enterprises, distribution enterprises, and e-commerce enterprises, advance interactive online-offline development, and facilitate the distribution of dairy products. We shall encourage the exploration of new dairy product marketing models such as “Internet Plus” and experiential consumption, reduce distribution costs, and improve enterprise profitability. We shall support the construction of cold-chain storage and transportation facilities for low-temperature dairy products, formulate and implement storage and transportation specifications for low-temperature dairy products, and ensure product safety and quality.

(11) Tightening the Interest Linkage between Dairy Farming and Processing. We shall foster and strengthen specialised dairy farmer cooperatives, advance the consolidation of existing dairy farming operations, support qualified farms (households) in establishing processing plants, and improve their ability to withstand market risks. We shall support dairy enterprises in building and acquiring farms, raise the proportion of self-owned raw milk supply, and promote the integrated development of farming and processing. We shall establish a raw milk price negotiation mechanism guided by local people’s governments at or above the county level, with the participation of dairy enterprises, dairy farmers, and industry associations; dairy enterprises and dairy farmers shall sign long-term, stable purchase and sales contracts to form secure trading relationships. We shall carry out pilot programmes for third-party testing of raw milk quality and establish a fair and equitable order for raw milk purchase and sales. We shall regulate raw milk trading practices and, in accordance with the law, investigate, punish, and publicly disclose conduct such as failure to honour raw milk purchase and sales contracts, and the use of trading relationships to force the sale of veterinary drugs, feed, and farming equipment.

IV. Strengthening Dairy Quality and Safety Supervision

(12) Improving the Regulatory and Standards System. We shall study and improve laws and regulations on dairy quality and safety, and refine the management systems governing raw milk production, collection, and transportation, as well as dairy product processing and sales. We shall revise and raise national standards for raw milk, sterilised milk, pasteurised milk, and other dairy products; impose strict safety and hygiene requirements; establish a quality grading system for raw milk; and guide premium pricing for premium quality. We shall formulate processing technology standards for liquid milk and regulate processing practices. We shall develop and issue national food safety standards, including testing methods for reconstituted milk. We shall supervise and guide enterprises in organising production in accordance with standards and regulations.

(13) Strengthening Full-Process Control of Dairy Production. We shall ensure that dairy enterprises fulfil their primary responsibility for quality and safety, and establish and improve a traceability system for dairy quality and safety covering the entire process of farming, processing, and distribution. We shall strengthen source management and strictly control the use and supervision of inputs such as feed and veterinary drugs in dairy cattle farming. We shall guide individual dairy farmers to sell their raw milk to lawful raw milk collection stations. No entity or individual may process raw milk for external sale without authorisation. We shall implement dairy quality and safety monitoring programmes and crack down hard on the illegal collection of raw milk and all forms of illegal addition of substances. We shall exercise precise, round-the-clock management of raw milk collection stations, transport vehicles, and dairy enterprises, and shut down unqualified producers and operators in accordance with the law. We shall improve the dairy quality and safety risk assessment system to identify and eliminate risks and hazards in a timely manner.

(14) Intensifying Supervision of Infant Formula Milk Powder. We shall strictly enforce the laws, regulations, and standards governing infant formula milk powder and strengthen the registration management of infant formula product formulations. Infant formula milk powder manufacturers shall implement food safety and quality management systems such as Good Manufacturing Practice (GMP) and Hazard Analysis and Critical Control Points (HACCP), and establish food safety self-inspection and problem-reporting systems. In accordance with the “double random, one open” requirement (the random selection of both inspectors and inspection targets, with inspection results made public), we shall carry out continuous inspections of food safety production compliance systems and impose strict penalties for problems identified. We shall crack down hard on illegal acts, including the illegal addition of non-edible substances, the use of food additives beyond the permitted scope or limits, the alteration of labels, and the inclusion of false or exaggerated content on labels. The import of large-packaged infant formula milk powder for repackaging within China is strictly prohibited. We shall vigorously advocate and encourage the use of raw milk in the production of infant formula milk powder, support dairy enterprises in building self-owned and self-controlled raw milk bases for infant formula milk powder, and further improve the quality of infant formula milk powder.

(15) Advancing the Development of an Industry Integrity System. We shall build a dairy industry integrity platform, support dairy enterprises in conducting quality and safety commitment activities and fostering a culture of integrity, and establish enterprise integrity archives. Making full use of the national credit information sharing platform and the National Enterprise Credit Information Publicity System, we shall promote the sharing of credit information on dairy enterprises among taxation, industry and information technology, and market regulation authorities. We shall establish a “blacklist” system and a market exit mechanism for dairy enterprises, strengthen public opinion oversight, and create market-based, industry-wide, and societal constraints and sanctions.

V. Strengthening Consumer Guidance for Dairy Products

(16) Building a Positive Image of the Dairy Industry. We shall actively publicise achievements in dairy cattle farming, dairy product processing, and quality and safety supervision; regularly release information on quality and safety inspections and sampling of dairy products; showcase the sound quality of domestically produced dairy products; and enhance public recognition of China’s dairy industry. We shall promote leisure and sightseeing ranches and organise public open days at dairy enterprises, allowing consumers to experience first-hand the entire process of safe milk production and stimulating consumer vitality.

(17) Strengthening Brand Building. We shall implement a dairy industry brand strategy, stimulate enterprises’ initiative and creativity, cultivate high-quality brands, and lead the development of the dairy industry. Through third-party organisations such as industry associations, we shall promote brands with superior products and strong reputations to expand the consumer market. We shall give play to the leading role of backbone dairy enterprises, promote broad alliances and cooperation among enterprises, and enhance the brand influence of China’s dairy industry.

(18) Actively Guiding Dairy Consumption. We shall vigorously promote the national school milk programme, expand the range of products, ensure quality and safety, and broaden its coverage. We shall carry out public-interest publicity, increase the placement of public-service advertisements, and strengthen positive guidance for dairy consumption. We shall popularise nutritional knowledge about sterilised milk, pasteurised milk, cheese, and other dairy products; advocate scientifically informed milk consumption; and cultivate the habit of consuming dairy products among the public. We shall strengthen the monitoring of public opinion, respond promptly to public concerns, and foster a favourable public opinion environment.

VI. Improving Safeguard Measures

(19) Increasing Policy Support. In the farming segment, we shall focus support on the development of breed improvement systems, standardised large-scale farming, the alfalfa development action for dairy industry revitalisation, the integration of crop farming and animal husbandry, disease eradication on dairy farms, the resource utilisation of livestock waste, and the development of a supervision system for raw milk collection and transportation. In the processing segment, we shall focus support on the mergers and reorganisation of infant formula milk powder enterprises and the development of dairy quality and safety traceability systems. Local people’s governments shall make coordinated plans and rationally allocate land for dairy livestock farming. We shall encourage social capital to establish dairy industry funds in accordance with market principles, amplifying the effect of financial support. We shall strengthen financial and insurance support, encourage financial institutions to develop credit product innovations such as loans secured by live dairy livestock and loans secured by farms, advance the expansion of dairy insurance coverage and the raising of coverage standards, set insurance premium rates reasonably, and explore pilot programmes for target price insurance for raw milk.

(20) Strengthening Market Regulation of the Dairy Industry. We shall improve the information system for dairy production and markets, carry out dynamic monitoring of production and sales, release early warning information in a timely manner, and guide production and consumption. We shall give full play to the role of industry associations in guiding all types of market entities to consciously maintain and regulate the order of market competition. Following the trend of dairy industry internationalisation, we shall combine “bringing in” and “going global,” promote the complementarity of strengths in capital, resources, and technology, and enhance self-development capabilities.

(21) Strengthening Scientific and Technological Support and Services. We shall carry out scientific and technological action to enhance the competitiveness of the dairy industry, promote scientific and technological innovation in the dairy industry, and raise the level of application of advanced processes, advanced technologies, and intelligent equipment in dairy livestock farming, dairy product processing, and quality testing. We shall strengthen the R&D of new dairy products to meet diversified consumer demand. We shall improve the socialised service system for the dairy industry, intensify technology extension and personnel training, raise the calibre of practitioners, and improve production, operation, and management levels.

(22) Effectively Strengthening Organisational Leadership. All regions and relevant departments shall, in accordance with the spirit of these Opinions and their respective division of responsibilities, intensify their efforts, strengthen coordination and cooperation, formulate and improve specific policy measures, and ensure effective implementation. The Ministry of Agriculture and Rural Affairs shall, in conjunction with relevant departments, supervise and inspect the implementation of these Opinions and report to the State Council.