The major shake-up will cover all aspects of the dairy supply chain, including production, purchase, processing and sales within the next year, the official Xinhua News Agency reported Thursday.
"The crisis has put China's dairy industry in peril and exposed major problems existing in the quality control and supervision of the industry," an official with the National Development and Reform Commission, China's top economic planning body, was quoted as saying by Xinhua.
Details posted on the Website of the State Council, China's Cabinet, said the Health Ministry would revise the quality and safety standards of dairy products, while the Agriculture Ministry would draft examination standards to check for melamine and other toxins in animal feed. A tracking system would also be established to record the flow and delivery of dairy products.
Milk and milk products tainted with the industrial chemical melamine have been blamed in the deaths of at least four infants and have sickened more than 50,000 others. The government has detained an unknown number of people in the scandal, and there have so far been no court cases.
The huge scandal highlighted widespread practices of adding the chemical, typically used in manufacturing plastics, to watered-down milk to falsely mimic higher protein levels. Investigations have also uncovered the common practice of adding melamine to animal feed after melamine-spiked eggs were discovered.
Melamine poses little danger in smaller amounts but larger doses can cause kidney stones and ultimately renal failure.
The government plans to step up regulation of milk collection stations, where dairy farmers sell their raw milk, and "firmly crack down on and outlaw illegal milk vendors, firmly crack down on any illegal acts involving adulteration," according to a statement from the National Development and Reform Commission.
By the end of 2009, milk stations nationwide would be required to meet standards on hygiene, testing methods, operational procedures and personnel, it said.
The plan laid out a goal of strengthening relevant laws and regulations by 2009. By 2011, the goal is to increase the number of farms with more than 100 cows from 20 percent to 30 percent. Much of China's supply of raw milk now comes from small dairy farmers with a handful of cows, which makes it difficult to standardize quality.