China's stockpiling policy benefits grain farmers

In 2009, the Chinese government stockpiled a total of 91.95 million tonnes of grains and oilseeds for state reserves, helping to support domestic grain prices and boost farmers' incomes.

Beijing stockpiled a total of 40.85 million tonnes of wheat and 27.5 million tonnes of corn in 2009, according to the State Grain Administration.

The government also bought 4.6 million tonnes of soy and 7.85 million tonnes of rapeseed in the year during the stockpile programme, it said.

The stockpiles, which came after a record grain harvest in 2008, helped boost farmers' incomes by RMB40 billion (US$5.88 billion).

The stockpile programme has also led to record imports of soy and rapeseed. In 2009, China, the world's top soy buyer, imported 42.55 million tonnes of the oilseed, a rise of 13.7% from 2008.

In 2009, the government has sold 65.5 million tonnes out of the state reserves, which would leave 26.45 million tonnes of grains still in silos.

Beijing agreed to offer subsidies to feedmills and crushers to buy grains from farmers late last year, and this would reduce state purchase volumes this year.

Besides the central government, provincial governments have also increased local reserves of grains by 2.8%.