February 10, 2011

China to up minimum grain purchase prices in 2011-15

China is likely to further raise floor purchase prices for grain in the following five years in a bid to stabilise grain production and increase farmers' income, industry insiders said.

Average prices of wheat and paddy rice in China rose 40% to 25% from 2005 to 2010, and purchase prices of grain for state reserves have also been increasing steadily, according to the State Administration of Grain.

Meanwhile, state grain firms purchased a total of 711 million tonnes of grain during 2006 to 2010 period, up 23% over the 2000 to 2005 period.

It is a basic grain price policy to steadily raise the minimum purchase prices year on year, a researcher with Chinese Academy of Social Sciences said.

Following the rising planting cost, a reasonable rise in grain purchase prices will help boost farmers' interest in planting grain, according to an official with the National Development and Reform Commission.