October 14, 2004

 

 

China Paid RMB 11.6 Billion In Grain Subsidies Jan - Sep

 

China's government paid RMB 11.6 billion ($1.4 billion) in direct grain subsidies to farmers in the first nine months of this year, state media reported Wednesday, citing Finance Minister Jin Renqing.

 

Nearly 600 million farmers out of the country's 900 million rural residents benefited from the direct grain subsidy program, the official Xinhua News Agency reported.

 

Jin said 138.9 million rural families in 13 major grain-growing areas were paid RMB 10.28 billion in direct subsidies to encourage them to grow grain, the report said.

 

A further 16 provinces allocated RMB 1.3 billion to subsidize their grain growers, he said.

 

China's government introduced the direct subsidy program this year to reverse four consecutive years of declining grain harvests, the report said.

 

China's grain output has fallen steadily in the past five years to reach 431 million metric tons in 2003 from a record high of 512 million tons in 1998.

 

The direct subsidy program is also part of a reform strategy aimed at rolling back the grain procurement program that the government previously used to support grain prices.

 

This lossmaking system involved paying indirect subsidies to local state-owned grain trading firms to purchase stocks from farmers at fixed prices.

 

Direct subsidies paid so far this year translate into a net increase in farmers' income of RMB 74 for an average family in the 13 major grain-producing provinces in China, the report said.

 

The 13 provinces - Heilongjiang, Jilin, Liaoning, Hebei, Henan, Jiangsu, Anhui, Hunan, Hubei, Sichuan, Jiangxi, Shandong and Inner Mongolia - account for about 69% of China's grain-growing area.