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Got Milk? 'Fraid not.

This morning I rode out to the village of Phu Dong, where I met dairy collective chairman Hoang Trong Thuyen to talk about why his farmers are having to pour thousands of liters of milk down the drain every week.

Talking to dairy collective chairman Hoang Trong ThuyenEver since the Chinese melamine scare hit late this summer, demand for milk has plummeted in Vietnam. At first this was understandable — nobody knew whether the milk was safe. But the government has been very responsive, setting up two dozen inspection teams to test milk throughout the country, and it's quite clear by now that there's no melamine problem with Vietnamese milk. Some milk marketed by the state-owned company Hanoimilk did contain very low levels of melamine due to use of powdered milk imported from China, and it was pulled from the shelves. But the rest of the country's milk supply seems to be safe.

But Vietnamese consumers aren't going back to milk. They've just dropped it. People in Vietnam haven't been drinking milk for very long anyway. It's a recently acquired habit, mostly centered among parents who taught their kids to drink it for health benefits. Since the melamine problem is mainly one that affects infants and small children, it's been especially deadly to this parent-centered demand.

Most important, Vietnamese simply don't trust their government to ensure that the milk is safe. There's too much corruption and non-enforcement in Vietnam, especially of environmental rules. No one — government, corporations, private citizens — has credibility. Because nobody trusts each other to certify the milk isn't poisonous, farmers can't sell, parents don't buy, and kids don't drink. It's a lose-lose-lose proposition.

Anyway, for Thuyen, the whole thing has been a disaster. Milk is what pulled his town out of poverty over the last 15 years. He personally got into raising dairy cows after he retired from a career at a state-owned company in 1989, and milk has made him rich. He's the one who owns the big milk storage vats and serves as the go-between between the village's small-scale farmers, who each keep three to five cows in stables behind their houses, and the big dairy purchasing companies that buy on a semi-weekly basis for processing plants in Hanoi. Thuyen now owns several houses in the village, each between three and five stories. He has a huge family shrine in the compound, where he keeps the altar to the familial ancestors; and his real estate property alone is worth well over $1 million.

But there's no demand for his milk right now, and the processing plants are buying perhaps 30 percent of their normal level. He's having to turn away farmers from the collective. When they do sell, the price is lower than it used to be. And every several days, he has to pour several tons of milk into the sewage drains. They can't even give it away anymore — nobody wants to drink it.

Though actually, it turns out that's not because of the melamine. It's just that nobody in the village actually drinks milk. Thuyen says he personally drinks a liter a day of fresh milk, but nobody else in his family or in the village touches the stuff. Partly that's because for the price of a kilo of milk, you can buy five kilos of rice. But even the richer villagers, who could afford to drink it, don't. "They're just not used to it," Thuyen says. One might suggest that it could be productive for farmers to show confidence in their product by drinking it themselves. But that doesn't seem to be how it works here — except for Thuyen, anyway. In this as in other areas, he seems to be ahead of the curve.