Dairy is the industry with most potential for development within primary production in China. In the past, government utilized direct support to the industry and was often directly involved in the industry. Since shifting to the market system the government uses less direct measure. Now the main role of the government is in the establishment and enforcement of the policies. The farmer needs financing and technology application to improve efficiency and produce better quality milk. A system needs tobe built to secure farmers' income. Supply/demand management is another difficult task that the government and industry must work together to solve. Future consideration needs to be given to supply-managed systems, amalgamation, and cooperative production and contract systems that could accelerate the development of China's dairy industry.
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