September 26, 2008

China offers tax breaks to beleaguered dairy industry to tide over crisis 

China's local governments will issue fiscal incentives in terms of tax breaks and cheaper loans to help the dairy industry tide over its current crisis that has led to sales plummeting followed by chemical contamination found in milk and milk products.

In a statement published on its website late Thursday (September 25, 2008), the Ministry of Agriculture said several provinces like Inner Mongolia Autonomous Region and Tianjin city issued SOPS including value added tax rebates, favoUrable loans and government subsidies to help local dairy farmers and producers.

Governments of Shandong province, Inner Mongolia and Tianjin city also agreed to allocate funds to strengthen the safety tests of dairy products.

With melamine contamination found in a variety of milk products and not just baby formula where it was initially traced, the scandal has created widespread panic among Chinese dairy consumers.