China
February 18, 2011
Source: People’s Daily Overseas Edition via Ministry of Agriculture
11 Feb. 2011
On 9 February, Premier Wen Jiabao chaired an executive meeting of the State Council, at which another ten measures were announced on the basis of recently unveiled supporting policies for grain production，including raising the minimum purchase price of rice, increasing efforts in development of anti-drought infrastructure, prearranging subsidies of 1.2 billion yuan from the central government for purchase of agricultural machinery, and expanding the scope of the subsidies for anti-drought watering practices in the winter wheat fields.
These timely supporting policies will play an important role in mitigating the increasing pressure from the rise of world grain prices, preventing the further increase of grain prices resulting from the possible reduction in the grain output caused by the drought in China’s north as well as stabilizing domestic prices and curbing inflation.
Integrated measures taken by the state to stabilize grain prices
Since October 2010, there has been unusually limited rainfall in Shandong and Henan, two major wheat producing provinces. It is estimated that drought in North China, the Huanghuai Plain and some other areas would continue this February. Some experts have predicted that although China would not be confronted with serious grain shortage thanks to the regulating role of the national grain reserves despite possible reduction in grain output in the future, the shortage of some grains and the inter-regional imbalance between supply and demand resulting from the drought might lead to certain fluctuation of prices; and that the price of wheat would go up by around 2.09 percent because of the drought.
Officials from the Ministry of Agriculture said that announcement of the ten measures, which included increasing subsidies for anti-drought efforts and raising the minimum purchase price of rice, showed that China had shifted its approach for promoting grain production and stabilizing prices from merely anti-drought activities in the northern wheat producing area to integrated supportive measures for the production of three major grain crops, namely wheat, corn and rice.
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