The output of China's milk industry is expected to drop, after China's entry into the World Trade Organization (WTO) in December.

But, a study by the academy says it is essential now to upgrade enterprises' producing capacity.

Cheng Guoqiang, leader of the study and the adviser of the Ministry of Agriculture said that after WTO entry, the prices of milk products will lower, which will benefit consumers but cut the income of milk producers and cow breeders.

Milk consumption and import will definitely rise, according to Cheng.

According to China's WTO promise, the tariff on milk products will be cut to 10 percent from the current 30 percent.

"Chinese milk enterprises will face a hard time in the short run," Cheng said.

To live through the hard times and seize the opportunity, the Chinese milk industry should focus on three points, said Du Ying, director of the Industrial Policy and Regulation Department under the Ministry of Agriculture.

First, the enterprises should enlarge their size through a combination of production, procession and sales.

Then, China should establish a comprehensive quarantine system on milk products.

Finally, the government and milk enterprises should make a joint effort to cultivate milk consumption and expand demand.

(Xinhua News Agency March 14, 2002)