March 10, 2008

China to allocate US$79.2 billion for grain safety

China's central government will spend RMB562.5 billion (US$79.2 billion) on agricultural sector to ensure grain safety and boost farmers' income, premier Wen Jiabao said.

The budget nearly doubled compared to 2004 figure as the government seeks to become more self-sufficient in agriculture.

Ke Bingsheng, a professor in China Agriculture University, said the budget will boost grain, edible oil and meat production. He added that export control would help stabilize domestic prices and prevent fluctuations of global market prices.

Meanwhile, it also aimed to correct the big gap between the urban and rural areas.

An annual financial budget planned a 23.4 percent increase in direct subsidies to farmers.

Han Jun, head of the rural department of the Development Research Center of the State Council, said the promised investment sends a positive message, yet it was still not much compared to the growth pace of the total government revenues.

Although farm products were sold higher last year, with grain prices up 5.7 percent and cooking oil rising 37.1 percent, farmers said profits were compromised by high production costs.