February 2, 2007

China to continue minimum grain purchase price policy

The minimum purchase price policy, where the government guarantees a minimum price to grain farmers in order to protect their incomes, is set to continue in key grain growing areas, China's State Grain Bureau announced.

China will continue to implement the minimum purchase price policy to strengthen the control of grain and promote steady development of grain production, said Nie Zhenbang, director of the State Grain Bureau.

Speaking at a national meeting, Nie said that the country will take measures to further improve the minimum grain purchase price policy and system. The government would optimize the subsidy and supervision mechanisms for the minimum grain purchase price and direct market expectations in a rational way, he said.

China started the minimum grain purchase price on wheat and rice in key growing regions last year, when the market was beset with low prices. The policy helped wheat farmers increased their income by more than RMB 4.0 billion (US$500 million)

The State Grain Bureau further stressed it would strengthen supervision over grain purchases to ensure the nation's food security.