February 20, 2012

China to provide agricultural machineries to farmers

The Chinese government will continue to subsidise the machinery purchases of farmers this year to free up more rural labour and improve the whole domestic grain production, it said Friday (Feb 17).

According to a joint statement by the Ministry of Agriculture (MOA) and the Ministry of Finance (MOF), the government has slated at least RMB13 billion (US$2.1 billion) in subsidies for agricultural machinery purchases this year.

The new funding for 2012 came after the government allocated RMB52.97 billion (US$8.42 billion) to subsidise about 14.89 million rural households to purchase 16.72 million machinery units over the past eight years.

In 2004, the government launched the agricultural machinery purchase subsidy program to help farmers and boost the country's grain output. The program has been a success, contributing to eight consecutive years of growth in grain output, which hit a record high of 571.21 million tonnes in 2011.

Over the years, subsidy program has boosted domestic demand and driven the agriculture machinery industry with an average annual growth of more than 20%, according to the statement.

Agricultural machines are now used in 54.5% of Chinese farming, or 2.2 percentage points higher than that of 2010, according to the statement.