This study examines the causes the melamine problem that occurred in Inner Mongolia in 2008. It analyzes the introduction of a new policy as a decisive point for restraining this problematic outbreak from the point of view of economics and industrial organization theory. The reasons the melamine problem occurred are that the dairy companies were giving a commission to milking stations on the basis of the milk collection volume, there was a low possibility of dairy companies buying milk with protein content levels below the established limit and the dairy companies and the milking stations shared asymmetrical information. The newly launched policies for avoiding recurrences of such melamine incidents are rigid monitoring of the milking stations by the dairy companies, increasing the possibilities of buying milk with protein content levels below the established limit and meliorating the dairy industry distribution channel system. Two directionalities are followed in order to assure the question of fresh milk food security. First is the supervision of the milking station agents regarding the melamine mixtures. The second is marketing integration, thereby internalizing the milk collection function within the dairy industry.
|Translated title of the contribution||Inner Mongolian Melamine Problem and Changes in the Milk Procurement System|
|Number of pages||7|
|Publication status||Published - Mar 31 2012|