September 17, 2008

China urged to raise grain prices when inflation eases 

China should hike grain prices once inflation pressure eases to protect farmers' interests, the People's Daily Wednesday (September 17, 2008) cited a senior government economist as saying.

Despite higher grain prices compared with last year, China's prices are still low compared with historical levels, thus threatening farmers' profit margins, the newspaper cited Yang Jian, a senior economist with the Ministry of Agriculture, as saying.

Higher grain prices and government subsidies have been offset by surging input costs, thus "it's very necessary" to hike grain prices further, Yang is quoted as saying.

China's consumer price index rose at a slower pace of 4.9 percent in August, the first time inflation fell below 6 percent this year, thanks mainly to smaller gains in food prices.