April 13, 2006

China plans to create unified, open grain market

The Chinese government on Wednesday (Apr 12) announced plans to create a unified and open national grain market.

The decision was passed at an executive meeting of the State Council, the Chinese government, presided over by Premier Wen Jiabao.

In the same meeting, the government also announced a slew of measures to provide grain security to the nation.

Plans were announced to develop a system to allow for better co-ordination between grain-producing areas and grain-importing regions.

The government would also improve efforts to ensure security of grain supplies, fine tune its policies on subsidies for grain production and establish minimum grain purchasing prices.

Local grain reserves would be expanded and improvements would be made to the central grain reserve management system.

The government would also increase support for major grain-producing areas and grain growers. For instance, an extra RMB12.5 billion (US$1.56 billion) in direct subsidies would be allocated to grain growers to offset rising production costs this year.

Production costs have been rising for the 600 million grain growers in China, particularly the prices of diesel oil, chemical fertiliser and pesticides.