China’s central government announced October 9 an emergency rescue plan that would allocate 300 million yuan in subsidies for dairy farmers affected by the contaminated milk crisis.

The Ministry of Finance said the subsidies will mainly be granted to dairy farmers in the country’s six major dairy production regions: Inner Mongolia, Hebei, Liaoning, Shanxi, Shandong and Henan. The milk industries in these areas have been crippled by an extensive scandal that broke in early September when the industrial chemical melamine was discovered in products from many of China’s most famous dairy brands.

Consumers in China have cut back on their dairy consumption by a huge margin, and countries across the world have started banning certain food products imported from China for fear of contamination.

Many farmers have been forced to dump fresh milk due to a lack of buyers. Their problems are have reached such a state that many are struggling to afford the cost of rearing their herds.

In efforts to revive the dairy industry, 14 local governments have already issued supportive policies for dairy farmers and producers.

As of October 6, the Hebei provincial government has allocated 316 million yuan in subsidies to local dairy farmers, offering farmers 200 yuan for each dairy cow. Inner Mongolia government also allocated 100 million yuan to help the region’s major dairy enterprises Mengniu and Yili.

The Ministry of Finance has likewise crafted a rescue plan. It announced in September that the interest rate for loans granted to dairy producers to buy raw milk will be reduced by 3 percent from October to December in an effort to encourage more consumption.

Melamine, a chemical that causes severe kidney ailments if too much is consumed, was added to fresh milk by middle men, called “milk stations,” who connect small-scale farmers to massive dairy producers. The purpose was to create the appearance of higher protein content, according to the official investigation.

1 yuan = 14 U.S. cents