Small Farms vs Large Farms: Which Milk is Safer and More Nutritious?

Claim 1: Small farms were to blame for the melamine scandal.

Rebuttal: They were not.

Official investigations concluded that it was milk brokers, not farmers, who adulterated the raw milk with melamine. But why add it in the first place? At the time, surging domestic demand for dairy products attracted heavy investment in processing, which quickly outstripped raw milk supply and sent prices soaring. Raw milk is sold by weight. How could sellers boost volume? Simply adding water wouldn’t work: it dilutes protein levels, and dairies measure protein content by testing for nitrogen. Enter melamine (C3H6N6): rich in nitrogen, white, water-soluble, and odourless. On paper, it seemed like the perfect additive.

But who would have known these chemical properties? The brokers buying from farmers were largely farmers themselves. In our research area, farmers widely agreed that these brokers lacked any knowledge of melamine’s traits, let alone the farmers themselves. The notion that small-scale farmers orchestrated the melamine crisis contradicts both the official verdict and the facts on the ground.

Claim 2: Large ranches produce raw milk more safely.

Rebuttal: Not necessarily.

Let’s start with feed safety (roughage such as straw, and concentrates). Feed safety simply means the feed is free from harm. If cattle consume mouldy feed, their milk may contain harmful substances. Feed safety is distinct from its nutritional value.

Small-scale dairy farmers source a small portion of their feed from homegrown straw and maize, purchasing the remainder on the open market. Large-scale farms rely almost entirely on commercial purchases. Once bought, the straw must be fermented to produce silage and haylage.

Because smallholders use the feed themselves, they personally oversee both purchasing and preparation. Given their modest requirements, they typically buy locally from trusted suppliers whose reputation they know, ensuring quality. The smaller scale also allows for careful inspection upon purchase and meticulous preparation.

Large farms depend on hired labour to buy and prepare feed. Unlike smallholders, hired workers are paid wages, which can reduce their attentiveness and commitment. Due to larger demands, they must source feed from further afield, making the transaction purely commercial and stripping away the quality assurance that local, community ties provide. The sheer scale also hinders meticulous oversight during purchasing and preparation. Should the feed mould, aflatoxin levels in raw milk can easily exceed legal limits. Aflatoxin is a known carcinogen, and it is not uncommon for major dairy companies to face scandals over exceeding these limits.

Next, veterinary medicines. Treating sick cattle requires medication, but their health status is heavily influenced by their environment. Smallholders practice small-scale, scattered rearing, whereas large farms concentrate thousands or tens of thousands of dairy cows in single locations. A veterinarian in the surveyed area, who has worked with both large farms and smallholders, noted: disease incidence correlates with stocking density. Overcrowding causes stress and increases illness. On small farms, one person closely monitors ten or twenty cows, enabling attentive care. Large operations simply cannot maintain this level of oversight, leading to higher rates of metritis, mastitis, and foot inflammation. Large farms are also more inclined to use concentrates, which can cause acidosis and trigger hoof problems. While large farms do maintain robust disease prevention programmes, smallholders are often reluctant to bear the cost.

However, because smallholders rear cattle in smaller, dispersed groups, their need for intensive disease prevention is inherently lower. So, is milk from the healthier cows of smallholders safer? Or is milk from the more frequently ill, more heavily medicated cows of large farms safer?

Some may argue that smallholders, driven by cost-cutting, might use cheap, unapproved veterinary drugs or sell milk before the withdrawal period has elapsed. First, large farms face equally strong incentives to cut costs, particularly since many are now publicly listed companies. Second, even smallholders must retain samples when selling milk, and they will be held accountable if illegal drug use is detected. Third, the most crucial requirement here is effective action from regulatory authorities to prevent unapproved drugs from entering the market.

Argument Three: Large dairy farms combined with major dairy processors can guarantee safety during the distribution and processing of raw milk.

Rebuttal: They cannot.

The condition of milking equipment and how well it is managed directly influences the levels of somatic cells and bacterial colony counts in the milk. Once collected, the safety of the raw milk depends on the quality and management of cold storage facilities, as well as whether any unauthorised additives are introduced.

Given the strong push to relocate smallholders into centralised farming districts, the safety of their supply chain hinges on the collection centres. Introducing this additional intermediary step does not inherently compromise safety. During the melamine scandal, for instance, no such contamination occurred while Sanlu operated its own collection facilities. Issues only emerged after the company handed over centre management to external operators.

Prior to 2008, regulatory oversight of collection centres and mobile milk traders in China was minimal. Following the 2008 scandal, authorities significantly tightened controls on these intermediaries. Dairy farmers are now required to leave samples when selling their milk. Should a batch fail inspection, the centre can test the retained sample to trace the source and apply penalties accordingly.

When it comes to processing, consumers surveyed in the study areas generally express scepticism about factory-branded milk on supermarket shelves, commonly remarking that they have no idea what additives might be inside.

For the average consumer, the processing stages of dairy products remain opaque. Whether shoppers obtain safe products depends entirely on corporate brand reputation and state oversight. Given the current strict regulatory framework for dairy in China, does that automatically mean big-brand products are safe? Far from it.

As shown in Figures 1 and 2, cases of maggot-infested and mouldy milk have all involved prominent major brands. Because these companies process milk on an industrial scale, any safety breach during production can affect a significantly large volume of products.

This highlights that reliance on top-down state regulation alone cannot guarantee safety during processing. In a landscape where food safety incidents remain all too common, even when there are no glaring defects and the ingredients list looks spotless, many consumers are left uncertain as to whether the product is truly safe.

First, whether they run small holdings or large pastures, any producer who neglects their cattle and yields poor-quality milk should be shut down. This raises a key question: under what circumstances would dairy farmers cut corners on animal husbandry? Put another way, when do regulatory failures emerge?

Consider this: if high-quality milk commanded premium prices, would farmers neglect their herds? Hardly. But suppose you invest in top-grade feed, veterinary care, and meticulous management to produce the finest milk, only to find you have no say over the price—and it’s even deliberately driven down. Under such conditions, who would bother? The incentive to cut corners inevitably follows.

This accurately describes the plight of dairy farmers in China, particularly smallholders. Because raw milk is highly perishable, producers are inherently at a disadvantage compared to processors. The power disparity between farmers and dairy corporations is stark, and most acute for small-scale operations. This imbalance grants dairy firms considerable leverage to drive down procurement prices.

At the same time, domestic raw milk faces stiff competition from imports. China’s predominantly barn-based rearing system carries a structural cost disadvantage compared to pasture-based grazing. Yet China remains one of the most open dairy markets in the world, with average import tariffs on dairy products standing at just one-fifth of the global norm. New Zealand, the world’s largest dairy exporter, benefits from a free trade agreement with China, allowing its dairy goods to enter duty-free. This influx of cheap imported dairy has further empowered domestic processors to keep farmgate prices down.

When quality offers no guarantee of a fair price and heavy investment risks total loss, farmers naturally hesitate to commit resources, and regulatory lapses follow. This is not a failure of small-scale farming as an organisational model; rather, it stems from structural flaws in the dairy supply chain and China’s market-opening policies for the sector.

Second, China’s prevailing dairy regulatory framework relies on large-scale pastures, corporate dairy giants, and top-down state oversight. This model emerged in the wake of the melamine scandal. The ensuing unprecedented focus on dairy safety, coupled with a governmental belief that food security is inextricably linked to industrial-scale production, prompted authorities to aggressively pursue the consolidation of both farming and processing operations.

Yet, as Figures 1 and 2 illustrate, this regulatory approach has not delivered genuine food safety. On the contrary, it has bolstered the market dominance of major dairy corporations. As key contributors to local tax revenues, these powerful firms can unduly influence government conduct, ultimately undermining effective food safety oversight.

The industry’s strategy of favouring large suppliers while marginalising smaller ones has exacerbated this power asymmetry. With fewer procurement partners to turn to, smallholders are left vulnerable to unfair pricing practices and exploitation by processing firms.

Furthermore, this system widens the gap between production and consumption, obscures processing methods, and diminishes consumers’ ability to monitor how food is made. Consequently, this top-down, consolidation-driven regulatory model does not automatically ensure food safety.

By contrast, small-scale farming and on-farm processing represent an alternative approach to food safety oversight. In addition to supplying processors through intermediaries, smallholders can sell raw milk and yoghurt directly to consumers. This model prioritises localised production and consumption, empowering buyers to monitor producers directly—a genuinely bottom-up system of accountability.

As depicted in Figures 3 and 4, this direct-to-consumer arrangement allows visitors to step onto the farm and witness firsthand whether the cattle are healthy, what they are fed, how clean the barns are, and how the milking, filtration, and packaging processes are carried out.

The production and processing of supermarket milk typically occur behind closed doors, whereas on-farm operations are inherently transparent. That transparency alone constitutes a form of oversight. Moreover, localised supply chains bridge the divide between producers and consumers, fostering familiar relationships that serve as an additional safeguard for food safety.

Under this framework, the relationship between producers and consumers is far more balanced, which inherently supports food safety. Beyond that, localised supply chains reduce logistical costs and generate tangible economic benefits for regional communities.

II. Nutritional Value of Raw Milk: Small Farms vs Large Dairies

First, regarding nutritional composition, milk from small dairy farmers is generally less nutritious than that from large-scale dairies.

The nutritional value of raw milk is primarily assessed through indicators such as protein and milk fat content. Overall, although milk from small farms does have lower protein and milk fat levels than that from large dairies, it still meets national standards (see table below).

For instance, among 30,351 raw milk samples collected by the National Centre for Food Safety Risk Assessment from 18 dairy companies across 17 provinces between January 2014 and February 2015, protein content stood at (3.18±0.14)% for large-scale farms, (3.07±0.12)% for cluster farms, and (3.00±0.14)% for independent producers.

Second, do we really need milk from large-scale farms with higher nutritional value?

Milk is widely regarded across China as a highly nutritious food, particularly for its protein content. According to the Chinese Nutrition Society’s 2013 Dietary Reference Intakes for Chinese Residents, the recommended daily protein intake is 65g for adult men and 55g for adult women.

The 2016 edition of the Chinese Dietary Guidelines, developed by the same body, advises a daily intake of at least 300g of milk and dairy products per person; the 2022 edition refined this recommendation to between 300g and 500g daily.

Milk from small-scale farms contains roughly 0.2g less protein per 100g than milk from large-scale farms. Assuming a daily consumption of 500g of milk per person, the cumulative difference amounts to just over 1g of protein, which is negligible relative to the body’s daily requirements. The variations in other trace elements are even more marginal.

Furthermore, the Chinese population does not suffer from a protein deficiency. A 2015 survey spanning 15 provinces and municipalities found that among residents aged 18–64, the median daily protein intake was 68.5g for men and 57.9g for women, both already exceeding the Chinese Nutrition Society’s recommendations.

The Report on the Nutrition and Chronic Disease Status of Chinese Residents, released in 2020, tracked nutrition and chronic disease trends from 2015 to 2019. Covering all 31 provincial-level regions, nearly 600 million people, and involving over 600,000 in-person interviews, the report noted that current intakes of protein, fat, and carbohydrates among urban and rural residents are sufficient.

Therefore, given the current nutritional landscape in China, seeking out milk from large-scale farms for marginal nutritional benefits is entirely unnecessary.

 

Third, the nutritional quality of raw milk bears no relation to the scale of the producing farm.

Today, the average size of dairy farms in China far exceeds that of operations in New Zealand, Australia, and EU member states. In those regions, raw milk production is predominantly handled by small-scale farms. Yet, as the table above demonstrates, these countries enforce stricter nutritional standards for milk than China does. This alone proves that small-scale farms are fully capable of producing highly nutritious milk.

So why does milk from China’s small-scale dairy farmers often fall short in nutritional value? The root cause lies with the dairy processing industry. These companies pay a premium for raw milk from large farms compared to what they offer smallholders. They also implement a rating system for large operations, tying scores directly to feed quality and milk pricing. This incentivises large farms to invest in premium feed, such as imported alfalfa. Meanwhile, lower purchase prices constrain smallholders’ ability to invest in quality feed.

III. Summary

In summary, concerning raw milk safety, large-scale farms offer no advantage over small-scale operations. Specifically, small farms were not the primary culprits behind the melamine scandal. Nor can large operations guarantee the safety of raw milk across production, distribution, and processing stages. China’s challenges in regulating milk quality stem primarily from the exploitation of farmers by dairy processors, rather than from the decentralisation of the farming sector. The prevailing model of ‘large farms + large processors + top-down state oversight’ is insufficient to guarantee milk safety.

Regarding nutritional value, while large-scale farms in China currently outperform smallholders, milk from small farms largely complies with national standards. Given that Chinese residents are already well-nourished, there is no compelling reason to prioritise large-farm milk for marginal nutritional improvements. Ultimately, the nutritional quality of raw milk is independent of farm size; small operations can equally produce highly nutritious milk, provided that a system where better quality commands a higher price is properly implemented.

Author’s Note

Readers interested in how China’s small-scale dairy farmers were marginalised and how large-scale farms rose to dominance may refer to: Xiaojun Feng. 2025. Cost competition or power struggle? The exclusion of dairy farmers from raw milk production in China. The Journal of Peasant Studies. https://doi.org/10.1080/03066150.2025.2539842

References

[1] Melamine incident: a pivotal turning point for China’s dairy industry and food safety regulation, 2024, https://finance.sina.com.cn/roll/2024-11-15/doc-incwaxxq9762101.shtml

[2] *History of China’s Dairy Industry (Specialised Volume)*, 2013, China Agricultural Press, p. 336.

[3] National Dairy Industry Development Plan (2016–2020), 2017, http://www.moa.gov.cn/nybgb/2017/dyiq/201712/t20171227_6129544.htm

[4] Zhong Yuting, Wang Jun. 2016. Survey on the Current Status and Influencing Factors of Protein Content in Raw Cow’s Milk in China. *China Journal of Food Hygiene*.

[5] Comparative Analysis of Regulations and Key Testing Indicators for Dairy and Milk Products in China and Overseas. 2021. https://www.cabidigitallibrary.org/doi/pdf/10.5555/20210528103

[6] Chinese People Do Not Lack Protein. 2022. https://www.cdstm.cn/gallery/media/mkjx/xgbnysdw_6453/202205/t20220515_1069139.html

[7] Why Did the *Dietary Guidelines for Chinese Residents 2022* Increase the Recommended Intake for Milk and Dairy Products? https://www.news.cn/food/20220528/18cbfc0edd074ac2863e6b39f7e98af7/c.html

[8] Chinese People Do Not Lack Protein. 2022. https://www.cdstm.cn/gallery/media/mkjx/xgbnysdw_6453/202205/t20220515_1069139.html

Foodthink Author

Feng Xiaojun

Associate Professor in the Department of Sociology and Anthropology at China Agricultural University, with a PhD from the University of Oxford. Primary research areas include the sociology of labour and agricultural sociology.

 

 

 

 

Editor: Xiaodan