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Farmers to get US$1.41b direct grain subsidies
Updated: 2004-10-14 14:56

Chinese grain growers have been paid a total of 11.6 billion yuan (US$1.41 billion) in direct grain subsidies since early this year, Chinese Minister of Finance Jin Renqing said in Beijing Wednesday.

The minister said 138.92 million rural families in 13 major grain-producing provincial areas were paid 10.28 billion yuan (US$1.25 billion) encouraging them to grow grain.

Sixteen other provincial areas also allocated 1.3 billion yuan (US$158 million) in subsidies to their grain growers, said the minister.

"By September 30, a total of 11.2 billion yuan (US$1.34 billion), or 96 percent of the total grain subsidies, has been paid to grain growers," the minister said in a press release.

Nearly 600 million farmers of the country's 900 million rural residents benefited from the direct grain subsidy program, which was introduced by the Chinese government earlier this year to reverse four consecutive years of decreasing grain output.

That move translates into a net increase of income by 74 yuan (US$9) for an average Chinese family in the 13 provincial areas, said the minister.

The sum might look insignificant, but it represents a milestone in China. It is the first time the Chinese central and local governments offered direct subsidies to grain growers.

China used to offer billions of yuan in grain subsidies each year to State-owned grain trading firms so that they would purchase grain from farmers at state-set prices.

Wan Baorui, former deputy agricultural minister, said that farmers benefited little from such indirect grain subsidy practice as the grain firms turned out to be inefficient and lost money.

The minister said a survey of 1,809 grain growers in the 13 provincial areas indicated 1,677 of them, or 93 percent, were satisfied with the direct subsidy policy, and 85 of the farmers, or 5 percent, were "relatively satisfied."

According to the survey, which was conducted by the ministry in cooperation with other department, 1,782 of the farmers, or 99 percent, said the policy encouraged them to grow grain. Ninety- nine percent of those surveyed said they favored current policy over the indirect grain subsidy one.

The minister said the direct grain subsidies have boosted the enthusiasm of farmers in grain production while helping raise their income.

Zheng Xinli, deputy director of the Central Policy Research Institute, said during the first half of this year, the income of Chinese grain farmers was 1,371 yuan (US$165.2), a year-on-year increase of 13 percent, the highest rate since 1997.

China's summer grain and early rice harvests have reached 101 million tons and 33.5 million tons this year, up 4.8 percent and 14 percent respectively from last year.

China is also expecting a good autumn harvest this year.

Zheng predicted that China is likely to reach its goal of 455 million tons of grain output, compared with 431 million tons last year, a decrease of 5.8 percent from 2002.

Lifting farmers' income and improving the country's grain security has been listed as one of the priorities of the Chinese government.

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