December 20, 2007

China to double subsidies for hog farmers to stabilise prices

Beijing on December 19 has announced greater support to pig farmers in a fresh move to ensure adequate market supply and stabilise food prices.

In a state council executive meeting presided by Premier Wen Jiabao, the government said it would increase its subsidy for every fertile sow to 100 yuan (US$13.6) next year.

The decision came one week after China announced that rising food prices, especially pork, the country's meat staple, had pushed the inflation rate to a new 11-year high of 6.9 percent in November.

China's pork output fell sharply this summer on breeders' dampened enthusiasm over rising feed costs in past few years, in addition to a massive pig cull after the outbreak of blue ear disease in some regions.

The sow insurance, which was launched in August to cover losses from pig epidemics and natural disasters, would extend to "as many sows as possible", the meeting said.

By November, China had insured 21.2 million sows, or 44.5 percent of the total nationwide, with insurance fees totalling 21.6 billion yuan, according to the China Insurance Regulatory Commission.

The central government also planned to spend 2.5 billion yuan next year to help breeders build "standardized, large-scale" pig farms, the meeting said.

Vaccinations against major pig diseases would be free and subsidies should be offered to farmers whose pigs have to be culled for disease control, it said.

To curb rising prices for feed, the central government would release part of its corn reserves to the market. Banks were also told to improve their services and to give loans to pig breeders.

The government vowed it would crack down on activities that attempted to force up prices far beyond real values, and to lower transport costs for farm products.