New Feed Regulations Stoke Ire

In the wake of the latest melamine contamination revelations, China's State Council issued revised regulations to tighten control over the feed and feed additives industry. The new regulations were released for public comment February 20. Comments are due by March 15.

An opinion piece appearing on Chinese web sites describes the context for the regulations and complains that the State Council is using the melamine incident as an excuse to freeze foreign competitors out of the Chinese feed market. The regulations mainly tighten up the regulation and monitoring of feed products, but they include a provision requiring foreign feed companies to sell in China through local branches or agents. This appears to backtrack from China's WTO commitment to allow foreign companies to compete in domestic commerce on the same footing as domestic firms.

The opinion piece states that the reason for the regulations is the adulteration of milk products with melamine. The author attributes the problem to farmers adding melamine to feed or milk and feed mills doing it, sometimes to meet demands of farmers. He says that prior to the melamine incident farmers were getting caught in a cost-price squeeze and added melamine as the only way to make a profit. (At the time, farmers denied being responsible because they said they didn't know what melamine was.)

The author says that the Ministry of Agriculture feed association held a meeting a month after the melamine incident (October 2008?) where all agreed that a zero tolerance standard was unrealistic and they agreed on an industry standard of 15-20 ppm.

The author argues that it makes no sense to restrict foreign feed companies. The melamine problem was restricted to domestic companies and statistics show that China is the largest melamine producer in the world. The author claims that the government is always looking for chances to freeze out foreign companies as well as domestic private companies, pointing to previous examples in the steel, petroleum, and express delivery services. "State-owned companies work out the policies, shouting about industry security, national security, food safety, etc, so they can jump on the last car of the monopoly train."

The author concludes: "Melamine and foreign companies—which will be kicked out the door?"