May 6, 2008

China doles out subsidies to sustain interest in egg production

China will increase support for egg laying facilities in hopes of preventing declining profitability from driving farmers out of the industry.

The move aimed to "reinforce the foundation for the development of the layer-raising industry and promote the healthy and sustained growth of the industry," the State Council (cabinet) said on April 18.

The government would provide subsidies to farmers raising purebred hens or running large hen farms and help rebuild chicken farms in regions badly hit by this winter's severe snowstorms, it said.

Snowstorms in February this year badly affected crops in Southern China and killed as many as 13 million livestock.

The State Council said a monitoring system would be established to provide market information that would help farmers make plans for production.

Even as the costs of raw materials rose, egg prices began to fall as supply exceeded demand. As of mid-April, prices were down about 10 percent from the peak reached before the Spring Festival in February, according to the Ministry of Agriculture.

Farmers were losing RMB 0.4 (US$0.057) per 500 grammes of eggs.

The cabinet also said China would give farmers training opportunities and encouraged the country's institutions to delve more into research on new breeds of laying hens.

The government would also support egg processing and distribution firms and extend credit and insurance services to more hen raisers, the Cabinet said.