China's Heilongjiang dairy farmers to get US$36.6 million in subsidies

China's Heilongjiang Province announced Thursday (Apr 23) it would provide RMB250 million (US$36.6 million) in subsidies to support dairy farmers whose businesses were hurt by last year's contaminated milk scandal.

Dairy farmers can receive RMB500 (US$73.2) for each dairy cow they raise that can be bred, said Jin Jibin, deputy Secretary-general of Heilongjiang's government.

The priority is to stabilise dairy cow breeding, protect the interests of farmers and boost farmers' confidence in cow-raising, said Jin.

With 2.2 million dairy cows, Heilongjiang  produces one-sixth of China's milk, but 75 percent of the farmers are losing money because consumer confidence are still low from last year's scandal, in which the industrial chemical melamine was added to milk to falsely increase the protein content of milk. The scandal saw the deaths of about six children and hundreds of thousands children also fell ill from consuming the tainted milk.

The entire dairy market is in depression although milk from Heilongjiang is melamine-free, and the situation is worsened with falling milk prices and rising feed costs, according to a local dairy farmer Zhao Hongxing.

The government will also provide funding to allow students to buy milk at half-price as a measure to boost dairy consumption, Jin said.

Jin did not say when the subsidies would be given.