China to overhaul battered dairy industry

The overhaul will cover all aspects of the dairy supply chain, including production, purchase, processing and sales within the next year, the official Xinhua News Agency reported.

"The crisis has put China's dairy industry in peril and exposed major problems existing in the quality control and supervision of the industry," an official with the National Development and Reform Commission, China's top economic planning body, was quoted as saying by Xinhua.

Details posted on the Web site of the State Council, China's Cabinet, said the Health Ministry would revise the quality and safety standards of dairy products, while the Agriculture Ministry would draft examination standards to check for melamine and other toxins in animal feed. A tracking system would also be established to record the flow and delivery of dairy products.

Milk and milk products tainted with the industrial chemical melamine have been blamed in the deaths of at least three infants and have sickened more than 50,000 others. The government has detained an unknown number of people in the scandal, and there have so far been no court cases.

The breadth and speed of the proposed changes echo actions taken last year, when consumer confidence around the world was shaken after a slew of Chinese exports - from toothpaste to toys - were found to contain high levels of potentially deadly chemicals and drugs.

After an initial unwillingness to acknowledge problems, authorities threw themselves into a campaign to protect export industries and bolster the country's reputation as a reliable link in the global economic supply chain.

The Chinese government formed a Cabinet-level panel to oversee product quality and food safety, implemented a national food recall system and announced sweeping measures that included increased random inspections, widespread closures of unlicensed manufacturers and restaurants and large-scale seizures of substandard goods.

In December, Chinese officials also signed an agreement with the U.S. Food and Drug Administration on improving cooperation in drug safety.

Results have been mixed, largely because it's extremely difficult to regulate the country's numerous producers and suppliers, many of which are small and illegally operated.

The dairy scandal highlighted widespread practices of adding the chemical melamine, typically used in manufacturing plastics, to watered-down milk to falsely mimic higher protein levels. Investigations have also uncovered the common practice of adding it to animal feed after melamine-spiked eggs were discovered.

Melamine poses little danger in smaller amounts but larger doses can cause kidney stones and ultimately renal failure.

The government plans to step up regulation of milk collection stations, where dairy farmers sell their raw milk, and "firmly crack down on and outlaw illegal milk vendors, firmly crack down on any illegal acts involving adulteration," according to a statement from the National Development and Reform Commission.

By the end of 2009, milk stations nationwide would be required to meet standards on hygiene, testing methods, operational procedures and personnel, it said.

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