Guiyuan says their potential buyers are professional expatriates and high-salary locals who care about food quality.

"A large part of imported dairy products are milk powder, while fresh milk and yogurt account for a tiny percent of the Chinese market, not to mention organic milk," says Liu Yaqing, vice director general of the Agriculture Bureau of the Beijing Municipal Government. "There is a huge demand for organic milk in Beijing, since organic milk is very popular in western countries now, and more and more foreigners are coming to Beijing."

Guiyuan's president, Wang Zhanli, says their milk passed the quality test in part because of the environment in Yangqing County. Located in the northwest of Beijing, Yanqing is 74 kilometres outside the city and is about 500 metres higher in altitude.

Forest covers 68 per cent of the county, and air quality ranks No 1 in the 18 districts and counties of Beijing, while its population density is the lowest.

"In the future, the approved standards will provide us with more detailed guidelines for pasture operation and organic milk production," Wang says.

Wang launched a co-operation with the China Agriculture University to research and develop organic milk in 2004. His company was certified in December 2005, to select 800 qualified cows to produce organic milk. After a six-month conversion period, their milk was certificated organic by the National Certification and Accreditation Administration on July 2006.

The company decided to call its brand Giuyuan, which means "regain nature" in Chinese.

Setting the standard

Now, having passed its final assessment, Guiyuan will be the first domestic organic milk brand to hit shelves in Beijing.

It's entrance may be a gauge of things to come, says Wei Kejia, the Secretary-General of China Milk Industry Association and member of the board. "The company's standards of organic milk and its production processwill provide a very meaningful case reference for drafting and enacting the industry and national standards for organic milk in the future," he says.

The assessment board of 11 members consisted of academic experts from the Chinese Agriculture University, the Chinese Academy of Agricultural Science, industry experts, and government officials from various departments, including the Ministry of Agriculture.

The board used international organic food standards and organic milk standards from the EU, US, and Japan, where organic milk is popular.

The standards covered items including the production of feedstuff and forage, the cows' welfare, their diet, disease prevention and control, veterinary medicine usage, breeding and reproduction, and milk quality.

The most difficult challenges of the organic milk market will be how to prevent and control disease, remove veterinary medicine residues, and keep the milk from being contaminated in the process of milking, storage, and transportation, according to the board.

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