The New York Times
By DAVID BARBOZA
April 8, 2003, Tuesday,
In a dusty
little village that sits along the windswept plains of Inner
a 43-year-old farmer named Wang Ergo has built a small dairy
farm in the courtyard that leads into his modest home.
He has a set of tattered, makeshift barns on his muddied
20-by-20-foot property, four Holstein cows (including one he
chains to a green jeep) and a metal bin stocked with aging
And with milk demand in China soaring this year, he is
"My income is very good," Mr. Wang says, standing in the mud,
stroking the back of one of his cows. "I can afford a
television and a sound education for my son. And it's not very
Like thousands of other dairy farmers in this north border
region, Mr. Wang is benefiting from China's growing appetite
for milk and other dairy products.
Though dairy consumption in China still ranks far below that
of Western nations and even below that of other developing
countries like India and Thailand, the sale of dairy products
has been soaring since 1998, when the national government
began encouraging schoolchildren to drink a glass of milk a
Now, with China's growing middle class in places like Shanghai
having milk delivered right to the doorstep, expectations of
an even bigger national boom are growing. And China has
already declared the dairy industry one of its top agriculture
priorities over the next decade.
As a result, the government and corporations are now pushing
to develop this region -- a vast grasslands that stretches
from Xinjiang Province in the northwest across Inner Mongolia
and east to Heilongjiang Province -- into China's new Milk
Belt, this country's answer to Wisconsin, America's dairy
"The north is already China's Dairy Belt," says Marshall Sun,
a dairy expert working at the Shanghai office of Rabobank.
"And there's a lot of room to grow."
Hohhot, which is about 415 miles northwest of Beijing, close
to the border of Mongolia, is the epicenter of the new milk
boom. This is where China gets much of its raw milk.
Two of the country's biggest dairies, the Yili Corporation and
Mengnui Dairy, are based here. And new dairy plants and ice
cream factories are sprouting throughout the region.
Indeed, Hohhot (pronounced who-ha-HOT-ta) has already been
dubbed Milk City by people here, largely because its outlying
villages are dotted with thousands of small dairy farms.
Of course, these are hardly modern dairy farms by Western
standards. In a village called Gertu, about 20 miles southeast
of Hohhot, families typically have just four or five cows,
which they keep much like a pig housed in a courtyard, chained
to a post or latched to a truck. Any visitor to the village's
narrow, manure-piled streets can see cows lined up against
walls or peeking out from small courtyards.
The Holstein cows that now dominate the region are still kept
in rather primitive conditions. They are often fed food scraps
or grain harvested from local fields. Much of the feed is
unsuitable for higher milk production standards.
There are a host of other problems that could complicate
China's diary strategy. Officials at China's Ministry of
Agriculture, for instance, admit that the dairy industry here
has poor-quality cows. And the United States Department of
Agriculture, in its own recent study of China's dairy
industry, has said that "China seriously lacks good breeding
Western agriculture has bolstered production in every arena
from hogs to chickens to dairy cows by breeding animals for
higher production and differing qualities. China, experts say,
is far behind.
But there has also been some progress in villages that are
just emerging from the nation's old-style agriculture systems.
Twice a day, morning and late afternoon, farmers in Gertu, a
village of 4,000 people, march their cows through the unpaved
streets to the nearby Babai Village Station No. 2, a new
automated milking post that one of the big dairy companies
installed here last June.
"We get three tons of milk a day," says Li Rongsheng, who
works at the new milking post. "Before, we had to do all this
Because farmers here have been purchasing and even importing
cows from places like Australia and New Zealand, production
has more than doubled in the last few years. But demographics
and projections of a continued milk boom suggest the need to
increase production at an even faster pace.
Even if only 10 percent of Chinese consumed what the average
American now takes in from dairy products, over the next
decade this country would need more than three million
additional cows to meet the demand.
"They'll either have to add millions of cows or import a lot
of cows, not even to match the U.S., just to get up to where
Mexico is in milk consumption," says Arthur Coffin, an expert
at the Department of Agriculture.
To keep pace with the milk boom, which has been fueled by new
attitudes about health and nutrition in this country, the
government is also initiating efforts to improve the genetics
of dairy cows nationwide.
And farmers here in the north are moving to increase the size
of their farms and adopt new techniques. Academics and other
experts are being flown in from around the world to train
The Yili Corporation and other dairy companies are installing
milking stations in small villages that still burn small pots
of coal to cook and heat their houses. The companies are also
offering loans to small farmers eager to bolster production.
But agriculture experts in China know that one of the major
obstacles to higher production is inefficiency in the
production system. While the average cow in the United States
yields over 17,600 pounds of milk each year, the average cow
in China yields less than 8,800 pounds, according to the
Department of Agriculture.
Industry experts call some of the conditions woeful.
"Some of these conditions are really primitive," said Barry
Murphy, a sales manager who traveled to Hohhot in March for
DSM Food Specialties, a dairy company based in the
Netherlands. "Some of these farmers think their cows are pigs,
so they'll feed them anything."
But the environment in the north seems mostly suitable for the
establishment of a Dairy Belt. The region is cool, flat and
One worry, however, is that environmental issues could slow
the push for dairy developments here. For years, there have
been concerns that cows, sheep and goats in the region have
been overgrazing. The government has begun placing
restrictions on grazing and even begun fencing in some
properties in an attempt to halt the overgrazing.
Some in the government believe the depleted grasslands may be
contributing to the dust storms that periodically sweep across
the northern steppes and then flow down toward big cities like
Farmers, however, are looking forward to expanding their
operations. They are confident because of the progress they
have made in recent years. Most no longer milk by hand. And
though many farmers admit to knowing little about where their
milk ends up, farm incomes have jumped from about $300 a year
a decade ago to close to $2,000 a year now.
"I'm much better off now," says Gong Yougui, 55, who has six
cows and three-fifths of an acre in this area. "You can feel
the changes. People around here have furniture, televisions
So after decades of tilling the soil to produce food for their
families and local communities, farmers throughout this region
are starting to abandon traditional crops like corn and wheat
in favor of dairy cows.
Indeed, many people here like to point out how well nearby
villages are doing.
"There's a village about 2 kilometers from here called
Yunheshe, where people with 10 cows have cellphones and
motorcycles," says Niu Hongwei, a 33-year-old dairy farmer
In Yunheshe, a former construction worker named Li Tengwei,
37, says the village of Shebiye does even better because it
has a larger dairy operation. The village is divided: people
live on one side of the main road and large, gated dairy farms
holding about 10 cows each exist on the other side.
"We don't live in mud houses anymore," Mr. Li says.
And there are bigger dairy farms on the way. From Shebiye,
visitors can see the new developments coming in the rows and
rows of bricks piled six and eight feet high for the dozens of
dairy farms under construction.
Dairy farmers here like to show visitors the old part of
Shebiye, a dilapidated village of old mud houses, many of them
abandoned or occupied by squatters.
In the place of these older houses are newer but still modest
brick homes, with a television set the prized piece of
Farmers here say the growing demand for milk made much of this
possible. This came about because of striking changes in the
The new dairy farms have evolved out of a system that has
dominated China for decades, a system of small plots of land,
about one acre, where each farmer grew for the family and sold
the excess to the local community.
Now, farmers are getting used to a market system. And for the
last decade, despite some big price drops, the market has been
good to them. Farmers who used to earn $200 a year selling
excess corn and vegetables are now making $700 for each cow
No one in this part of the world knows how sustainable the
milk boom is going to be in China. But everyone's counting on
higher dairy consumption in the coming years.
And so while dairy farms here may never rival the 10,000-head
operations in the Western United States, farmers like Mr. Wang
think the boom will carry through to his son's generation.
"I think he'll be doing the same thing," Mr. Wang says,
running his hand through his hair. "And this will still be