The central government agencies will take strong measures to ensure the
adequate distribution and supply of grain. The move is to stabilize market
prices which have been rising rapidly recently.
In an emergency circular issued on Wednesday by the State Council, grain
storage authorities were asked to respond rationally to the market prices, and
to guarantee the timely provision of grains and edible oils.
Inspections and law-enforcement will be strengthened at the main marketplaces
to prevent manipulation and speculation in prices, the State Council circular
Since the beginning of last month, the central government has released in
four batches a total of 3.8 million tons of grain reserves to stabilize market
Sources from the National Grain Administration said an auction of the fifth
batch is underway.
In another development, the Ministry of Communications ordered that major
highways, railways and ports ensure the quick delivery of grain and related food
products across the country.
In an emergency notice, the ministry said all transportation companies should
give priority to the distribution of grain, edible oils, and poultry products,
and upgrade their work efficiency.
Green passageways should be set up for grain and food transportation. Lengthy
inspections and fee charges should be prohibited, it said.
The measures are the latest taken by China to stabilize grain and other food
According to figures released on Tuesday by the People's Bank of China,
grains had seen a price rise of 1.6 per cent in November, annualised, edible oil
7.6 per cent, and oil-bearing crops 2 per cent.
The State Council circular also reported that China had three consecutive
years of good harvests - 2004, 2005 and this year. The current price rises in
grain should generate greater incentives for farmers.
But if prices go up too rapidly, they will affect the livelihood of many
low-income people, and social stability, it said.
Generally welcoming the policies listed in the circular, economists and food
market specialists called for their effective implementation.
Wang Jinmin, a researcher with the Institute of Agricultural Economics and
Development of the Chinese Academy of Agricultural Sciences, told China Daily
that if the authorities can fulfil all the measures, China will be effective in
stopping the spiralling grain prices.
"We must make sure that no businesses sacrifice the public interests for
their own profits," he said.
According to Wang Huijiong, vice-president of the Academic Committee of
Development Research Centre of the State Council, under the market economy, it
is tough for the government to balance the benefits of both producers and
When comparing urban supplies with the interests of "the much bigger rural
population," he said, letting the price increase within a reasonable band" can
actually help China solve its rural problems.
Both experts said prices had also been rising rapidly for farmers'
procurement of raw materials - such as pesticides and fertilizers.
Wang Jinmin noted that although the release of government grain stocks would
help ease the situation, it was only a short-term solution.
Future grain prices in China could be influenced by other factors on the
(China Daily 12/15/2006 page2)