It's been revealed that Nestle, the world's leading nutrition and health product company, has been short-changing dairy farmers in Shuangcheng City, Heilongjiang Province.

Nestle puts squeeze on dairy farmers.[File photo]

Mr. Li, a dairy farmer in Shuangcheng Town, Shuangcheng City of Heilongjiang Province, put two full barrels of milk on the scale after milking all his cows. Deducting the weight of the barrels, the net weight of the milk was 74.25kg. He then took the milk to the Nestle milk station located in nearby Chengxu Village.

As required by the station, a milk sample was tested, and then the milk was weighed. Li was told that the total net weight was only 73 kg. Li calmly accepted the "missing" 1.25 kg of milk, saying that he had "become used to it."

Shuangcheng City is the largest cow breeding base in the province. The 1,200 tons of milk produced daily in the city is under the monopolized control of Nestle Shuangcheng Ltd., a sub-enterprise of Nestle, the world's leading nutrition and health product company. However, the fact that Nestle regularly short-changes dairy farmers when purchasing milk is no secret among the dairy farmers.

According to Zhao Yongwu, a dairy farmer from Fendou Village, Nestle has, for years, been shortchanging by 1kg for every barrel of milk sold. This has become common practice.

Related regulations in Heilongjiang Province stipulate that if the milk reaches the national standard, the company has to follow the guiding price when purchasing milk. However, Nestle divided the milk into four grades. For example, in the 3rd quarter of this year, the company's stipulated purchasing price was 2.97 yuan per kg; however, it only paid this price for 1st-grade milk. The price paid for 4th-grade milk amounted to less than 2.7 yuan per kg, and farmers adjudged to have provided 4th-grade milk continued to receive this low price for one month. Commenting on the practice, Mr. Li Zu'an, who is in charge of Nestle Shuangcheng's milk purchasing center, said that the milk grade payment system was only used until July this year.

The reporter was also told that, to reduce costs, Nestle doesn't provide any milking machines to the farmers. Most dairy farmers in Changyong Village cannot afford milking machines, except those few who have bought second-hand machines.

For years, Nestle Shuangcheng has monopolized the milk produced in this city. According to the Bureau of Shuangcheng Animal Husbandry, the local government signed a contract with Nestle in 2002 which prohibited other dairy companies from setting up in the city. The contract further stated that all the milk produced in the city had to be delivered to Nestle. This is because Nestle is one of the city's major tax payers.

Interestingly, the local government also owns 2.99 percent of shares in Nestle, and the former city mayor is listed as chairman of the board, Vice-Mayor Wen Liheng told the reporter.