September 21, 2007

China to urge farmers to boost oilseed acreage, milk output

China's State Council will encourage farmers to increase the amount of acreage planted to oilseeds, including soybeans and rapeseeds, by providing them with more subsidies, the official Xinhua News Agency reported.

The move is aimed at improving the yield per hectare of the crops. In another move, China will boost the development of its milk industry with the help of government subsidies, insurance policies and new technologies to improve output.

The drive for higher oilseeds acreage comes in the wake of surging vegetable oil prices. The price rise was due to rising demand and reduced output of oilseeds and animal oils, and contributed to an on-year jump in the country's inflation to 6.5 percent in August. It marked the fastest rate of increase since December 1996.

Farmers planting high oil yielding soybeans on about 2.67 million hectares of land in northeast provinces and Inner Mongolia, the country's main soy producing regions, will receive more government subsidies, up from the current 0.67 million hectares.

Farmers in the Yangtze river area, China's main rapeseed producing region, will receive RMB 10 for every 0.07 hectare planted.

The production of rapeseed-based biodiesel will be "strictly controlled", the State Council was quoted as saying.

China will also develop oilseeds insurance, an oilseed producing centre and promote new technologies to encourage oilseeds production, it said.