December 24, 2010

 

China's 2011 rural policy to focus on grain output

 

 

China's government has set achieving stable growth in grain output as its main rural policy initiative for next year, and will continue ongoing efforts to stabilize grain acreage and increase yields.

 

The government will allocate a larger share of its fixed-asset investment budget to rural infrastructure such as irrigation, it said in a statement on Wednesday (Dec 22), following the conclusion of its annual Central Rural Work Conference.

 

"Realizing the target of producing more grain next year is a matter of critical importance," according to the statement.

 

However, the task will be arduous as seven years of consecutive grain output growth have created a high comparison base, it said.

 

The conference prioritized grain production and irrigation systems, instead of last year's focus on modernizing agriculture, as food prices have been a significant contributor to soaring inflation that is a major concern for Beijing.

 

China's consumer price index, a major gauge of inflation, rose to a 28-month high of 5.1% in November, triggering a flurry of government measures to curb price rises, especially of food.

 

The government has asked major edible oil and flour makers to hold down prices and asked retailers to reduce the charges they impose on suppliers for selling their products.

 

China's overall grain harvest this year was 546.41 million tonnes, an increase of 2.9% from last year, according to official data.

 

But China may not be able to sustain the growth trend, threatening its vaunted policy of grain self-sufficiency, Chen Xiwen, who heads the State Council's office on rural policy, said.

 

Chen said China's current grain demand is around 520 million tonnes.

 

China has been importing huge amounts of grain to meet domestic demand, including about 1.56 million tonnes of corn and 49.4 million tonnes of soy in the first 11 months.

 

At a recent financial forum, Chen also said that China's irrigation system is particularly vulnerable. Many Chinese medium and small-sized water reservoirs and farmland irrigation systems are suffering safety problems, he said.