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

Viewpoint 1: Smallholder farms were the culprits behind the melamine scandal.

Rebuttal: No, they were not.

According to official findings, the melamine was added to the raw milk by milk collectors. But why add melamine to raw milk in the first place? At the time, consumption of dairy products was booming across the country, and massive capital was flowing into the raw milk processing sector, leading to shortages and skyrocketing prices. Raw milk was sold by weight. How could one sell more milk? Simply adding water would not work, as it would lower the protein content, and dairy plants detected protein by measuring nitrogen levels. It was then that someone thought of melamine (C3H6N6), which has an extremely high nitrogen content, is white, soluble in water, and tasteless—on the surface, the perfect additive.

Who would know about these properties of melamine? The milk collectors who dealt with the farmers were mostly peasants themselves. In the research area, dairy farmers generally believe that the collectors did not possess knowledge of these chemical properties, and the farmers certainly did not. The impression that smallholder farmers caused the melamine scandal is inconsistent with the official findings and the facts.

Viewpoint 2: Large-scale farms are safer during the raw milk production process.

Rebuttal: Not necessarily.

First, regarding feed safety (roughage such as straw and concentrate feed). Feed safety refers to the absence of harmful substances. If cows eat mouldy feed, the milk they produce may contain harmful substances. Feed safety is distinct from the nutritional level of the feed.

Smallholders source a small portion of their feed from home-grown straw and maize, and the majority from the market. Large-scale farms rely almost entirely on market purchases. Once straw is purchased, it must be fermented to produce silage and haylage.

Smallholders produce for their own use, so they personally handle both the purchase of straw and the production process. Because their requirements are small, they generally buy from nearby sources; they know their suppliers personally, which guarantees quality. Their small scale also makes it easier to inspect purchases carefully and be meticulous during production.

Large-scale farms rely on hired labour to purchase and prepare feed. Compared to smallholders, hired workers are paid for their time, and their level of diligence and loyalty can be compromised. Due to the large scale of demand, they purchase from further away, meaning the relationship with the supplier is purely commercial, lacking the quality assurance provided by kinship and community ties. The sheer scale itself makes it difficult to maintain meticulousness during purchasing and production. Once feed becomes mouldy, aflatoxins in the raw milk easily exceed safety limits. Aflatoxins are carcinogenic, and it is not uncommon for dairy products from well-known companies to be exposed for exceeding aflatoxin limits.

Then there are veterinary drugs. When cows fall ill, medication is required. Whether cows get sick is closely related to their environment. Smallholders engage in small-scale, dispersed farming, whereas large-scale farms concentrate thousands or even tens of thousands of cows. In the research area, a veterinarian who has served both large farms and smallholders stated: the incidence of disease is related to stocking density; when density is too high, cows become stressed and fall ill more often. On small farms, one person manages ten to twenty cows and can monitor them closely; on large farms, it is impossible to keep track of everyone, leading to higher rates of endometritis, mastitis, and foot rot. Large farms are also more generous with concentrate feed, which can cause metabolic acidosis, also triggering hoof inflammation. However, large farms have better epidemic prevention, whereas smallholders are more reluctant to spend money on it.

Yet, because smallholders farm in a dispersed manner, the necessity for epidemic prevention is inherently lower than on large farms. So, is milk from the healthier cows of smallholders safer? Or is milk from the more diseased, more medicated cows of large-scale farms safer?

Some might argue that smallholders, seeking to save money, might use cheap, illegal veterinary drugs or sell milk before the safety withdrawal period has passed. Firstly, large-scale farms have an equally powerful incentive to reduce costs, especially since many are now listed companies. Secondly, even for smallholders, samples must be kept when selling milk, and they are held accountable if illegal drug residues are found. Thirdly, what is most needed in this regard is the action of relevant regulatory departments to prevent illegal veterinary drugs from entering the market.

Viewpoint 3: During raw milk distribution and processing, the combination of large farms and large dairy companies can guarantee safety.

Rebuttal: They cannot.

The quality of milking equipment and management is linked to the somatic cell count and bacterial colony counts in the milk. Once the milk is extracted, the quality and management of refrigeration equipment, as well as the presence of any human-added substances, affect raw milk safety.

Against the backdrop of smallholders being strongly encouraged to move into dedicated farming zones, the key to whether the distribution process is safe lies with the collection centres. The addition of a collection centre as a link does not inherently mean it is unsafe. During the melamine scandal, Sanlu did not experience such accidents during the stage when it built its own collection centres. Problems only arose after Sanlu handed over the management of these centres to external parties.

Before 2008, there was very little regulation of collection centres and mobile milk collectors in China. After 2008, state regulation of these intermediaries increased. When dairy farmers sell their milk, the collection centre retains a sample. If the milk is found to be substandard, the centre checks the sample to identify the source and subsequently issues a penalty.

As for the processing stage, dairy consumers interviewed in the research area generally believe that the milk from corporate brands on supermarket shelves contains “who knows what additives”.

For the average consumer, the processing stage of corporate dairy products is opaque. Whether consumers obtain safe dairy products depends entirely on corporate brand reputation and state regulation. Under current strict state regulation of dairy products, are big-brand products necessarily safe? No.

As shown in Figures 1 and 2, maggot-infested milk and mouldy milk have both been linked to household-name brands. Because dairy companies process milk on a massive scale, if a safety issue occurs during processing, the scale of the affected products is also quite large.

This situation reveals that relying on top-down state regulation cannot guarantee safety in the processing stage. Given the frequency of food safety issues in China, even when there are no obvious quality problems and the ingredient list looks clean, many consumers still feel uncertain about whether the product is actually safe.

Firstly, regardless of whether it is a small-scale dairy farmer or a large industrial farm, anyone who fails to raise their cows properly and produces poor-quality milk should be phased out. This raises a question: under what circumstances would the production side fail to raise cows properly? Or, put another way, where do regulatory failures originate?

Consider this: if high-quality milk fetched a high price, would producers fail to raise their cows properly? Of course not. However, if a farmer uses the best feed, the best veterinary medicine, and provides the most meticulous care to produce the finest milk, but has no control over the price—or finds it being deliberately suppressed—who would be willing to maintain those standards? Naturally, an incentive to cut corners emerges.

This is precisely the situation facing the dairy production sector in China, and it is even more pronounced for small-scale farmers. Raw milk is perishable, which leaves producers naturally vulnerable compared to processors. The power disparity between producers and dairy companies is vast, particularly for the small farmer. This imbalance gives dairy companies significant leverage to drive down prices.

Furthermore, Chinese raw milk faces competition from imported dairy products. Compared to pasture-grazing models, China’s predominantly stall-feeding approach has an inherent cost disadvantage. Yet, China is one of the most open dairy markets in the world, with average import tariffs being only a fifth of the international average. New Zealand is the world’s largest exporter of dairy products, and China has a free trade agreement with them; currently, New Zealand dairy products can enter China duty-free. The influx of cheap imported milk has enabled Chinese dairy companies to further depress prices at the production end.

Since high quality does not guarantee a fair price and investment risks total loss, farmers are naturally reluctant to invest, which inevitably leads to regulatory issues. This is not a problem with the small-scale farming model itself, but rather a consequence of the dairy industry’s structural chain and China’s dairy trade policies.

Secondly, the primary model for dairy regulation in China consists of large farms, large dairy companies, and top-down state regulation. This model emerged in the wake of the melamine scandal. The unprecedented emphasis on dairy safety following that event, combined with a government mindset that linked food safety to large-scale production, led the state to aggressively push for industrialisation at both the production and processing ends.

However, as shown in Figures 1 and 2, this regulatory model has not delivered genuine food safety. On the contrary, it has consolidated the power of large dairy corporations. As significant sources of local tax revenue, these powerful companies can distort government behaviour, which is detrimental to effective food safety regulation.

The strategy of ‘prioritising the large and phasing out the small’ has exacerbated the power imbalance between small farmers and dairy companies, leaving the latter free to exploit small producers who now have fewer companies to choose from.

At the same time, this model increases the distance between production and consumption, makes processing more opaque, and weakens the consumer’s ability to oversee the production process. Therefore, a top-down regulatory model that favours large-scale enterprises does not necessarily guarantee food safety.

Small-scale production and processing represent an alternative model of food safety regulation. In addition to selling to dairy companies via intermediaries, small farmers may sell raw milk and yoghurt directly to consumers. This model emphasises localised production and consumption, making it easier for consumers to oversee producers—a bottom-up form of regulation.

As illustrated in Figures 3 and 4, when small farmers produce and sell their own goods, consumers can visit the farm to see if the cows are healthy, what feed they are eating, whether the sheds are clean, how the milking is performed, and how the milk is filtered and packaged.

The production and processing of milk sold in supermarkets is opaque, whereas these processes are transparent for small-scale farmers. This transparency is, in itself, a form of regulation. Moreover, localised production and sales bring producers and consumers closer, turning them into acquaintances—a relationship that further serves as a guarantee of food safety.

Under this model, the relationship between production and sales is more balanced, which is conducive to food safety. This is not to mention the cost savings brought by local production and sales, as well as the benefits to the local economy.

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

Firstly, in terms of nutritional content, milk from smallholder farmers is generally less nutritious than that from large-scale farms.

The nutritional value of raw milk is primarily determined by indicators such as protein and milk fat. Overall, the protein and milk fat levels of milk from small-scale farms are indeed lower than those from large-scale farms, though they still comply with national standards (see table below).

For example, in a sample of 30,351 raw milk specimens collected by the National Centre for Food Safety Risk Assessment from 18 dairy companies across 17 provinces between January 2014 and February 2015, the protein content was (3.18±0.14)% for industrial farms, (3.07±0.12)% for farming clusters, and (3.00±0.14)% for individual smallholders.

Secondly, do we actually need the higher nutritional levels provided by large-scale farms?

Milk is perceived by the Chinese public as a highly nutritious food, particularly regarding its protein content. According to the 2013 Dietary Reference Intakes for Chinese Residents published by the Chinese Nutrition Society, the recommended daily protein intake is 65g for adult men and 55g for adult women.

The 2016 edition of the “Dietary Guidelines for Chinese Residents”, also formulated by the Chinese Nutrition Society, suggests a daily intake of no less than 300g of milk and dairy products; the 2022 edition further clarifies this to 300–500g per person per day.

Small-scale farm milk has approximately 0.2g less protein per 100g than milk from large-scale farms. Based on a daily consumption of 500g of milk, the cumulative daily difference is only about 1g of protein—a negligible amount compared to the body’s total daily protein requirements. As for other micronutrients, the disparity is even smaller.

Furthermore, the Chinese population does not suffer from a protein deficiency. A 2015 survey covering 15 provinces and cities nationwide showed that among residents aged 18–64, the median protein intake was 68.5g/day for men and 57.9g/day for women, both of which already exceed the recommendations of the Chinese Nutrition Society.

The “Report on Nutrition and Chronic Disease Status of Chinese Residents” published in 2020 monitored the chronic disease and nutritional status of Chinese residents from 2015 to 2019, covering 31 provinces and cities and nearly 600 million people, with over 600,000 people surveyed on-site. The report indicated that protein, fat, and carbohydrate intake is currently sufficient for residents in both urban and rural areas of China.

Therefore, given the current nutritional status of the Chinese population, there is no necessity to pursue milk from large-scale farms for the sake of such marginal nutritional gains.

 

Thirdly, the nutritional value of raw milk is not inherently linked to the scale of the farm.

Currently, the average size of dairy farms in China is far larger than those in New Zealand, Australia, and EU countries, where smallholder farms remain the primary producers of raw milk. However, as shown in the table above, these countries implement higher nutritional standards for milk than China. This sufficiently demonstrates that small-scale farms are perfectly capable of producing highly nutritious milk.

Why, then, is the nutritional level of milk from Chinese smallholders lower? This is linked to the dairy companies. These companies pay higher prices for raw milk from large-scale farms than they do to smallholders. Furthermore, dairy companies grade large-scale farms, with these grades tied both to feed quality and the price paid for milk. This incentivises large farms to use high-quality feed, such as imported alfalfa, whereas the low milk prices paid to smallholders limit their investment in feed.

III. Summary

In summary, regarding the safety of raw milk, large-scale farms are not superior to small-scale farms. Specifically, small-scale farms were not the culprits behind the melamine scandal. Large-scale farming cannot guarantee the safety of raw milk throughout the processes of production, distribution, and processing. The primary challenge in regulating dairy quality in China stems from the exploitation of the production end by dairy companies, rather than the fragmented nature of the farms. The current model of “large farms + large dairy companies + top-down state regulation” cannot guarantee dairy safety.

In terms of nutritional value, China’s large-scale farms outperform small-scale ones, but milk from small-scale farms generally meets national standards. As Chinese residents currently have sufficient nutrition, there is no need to seek out large-farm milk for negligible nutritional improvements. The nutritional level of raw milk is not dependent on the scale of the farm; small farms can produce high-nutrition raw milk provided that the principle of fair pricing for high quality is upheld.

Author’s Note

For those interested in how small-scale dairy farmers in China have been marginalised and how large-scale farms have risen, please 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] The Melamine Scandal: A Major 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 (Special History Volume)”, 2013, China Agriculture 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 Milk in China. “Chinese Journal of Food Hygiene”.

[5] Comparative Analysis of Milk and Dairy Product Regulations and Key Testing Indicators in China and Abroad. 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 of 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

Xiaojun Feng

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

 

 

 

 

Editor: Xiaodan