August 2, 2007

China offers more subsidies to pig farmers to encourage pork production

China announced Wednesday (Aug 1) it was offering RMB 1.81 billion (US$240 million) in subsidies to pig farmers and low-income residents to ease the pork shortage and ease inflation.

China's pork shortage has led to an increase in prices of the popular meat, which stoked inflation and made it out of reach from the country's low-income population.

The price increases has led inflation growth to a 33-month high of 4.4 percent in June.

The Ministry of Finance has announced it would offer RMB 558 million (US$74 million) to farmers to subsidise their hog insurance bills. Farmers need pay only 20 percent of insurance bills for their animals, with 50 percent covered by the central government and the other 30 percent paid for by local governments.

Beijing will also set aside RMB 505 million (US$67 million) to help farmers vaccinate their pigs against foot-and-mouth disease and blue ear disease, it said.

The Finance Ministry said it had already disbursed RMB 747 million (US$98.6 million) in subsidies to low-income residents and university students from poor families to help them buy pork.

Meanwhile, the China Banking Regulatory Commission has called on commercial banks to offer more help to pig-raising farmers and companies.