November 4, 2009

China aims to increase its grain output capacity by 10 percent by 2010 to meet its target of 95 percent self-sufficiency in grain supply, the country economic planner said overnight.

The country is targeting a grain production capacity of 500 million tonnes in 2010, 530 million tonnes in 2015 and 550 million tonnes or higher in 2020, the National Development and Reform Commission said in a document published on its Web site.

With a production capacity of 500 million tonnes, China can basically meet its grain demand in 2010, but rising demand will push local consumption to 572.5 million tonnes, increasing the gap between supply and demand, said the NDRC.

China produced 528.5 million tonnes of grain in 2008, up 5.4 percent on year, and is on track to see a grain output increase for the sixth year in a row this year.

To meet the grain production target, the government will further increase its subsidies to grain farmers, continue to raise the government minimum grain purchase prices and speed up its process of developing high-yield genetically modified grain crops, according to the document.

Other measures such as improving irrigation infrastructure and launching new varieties of crops as well as promoting mechanized production will also be applied, it added.

The government will also strengthen its control of the grain trade and information monitoring on grain production and consumption.

"With grain self-sufficiency reaching more than 95 percent, the global supply and demand impact on our grain prices will be manageable, and the government's macro control ability will be further strengthened," said the NDRC.

China has successfully controlled local grain prices this year with its largest volume of grain purchases since 1949, leaving agricultural futures such as corn and soybeans on the Dalian Commodity Exchange trading within limited ranges for most of the year.