Society

More veg is also good for wallets

(China Daily)
Updated: 2010-08-19 08:43

BEIJING - China's central government has ordered that vegetable production be expanded to help stem rising prices in some of the country's major cities.

The State Council, China's Cabinet, agreed to the measure at an executive meeting on Wednesday. It encompasses the entire process from production to consumption, including planting, storage, transport, distribution, marketing, quality monitoring and sales of vegetables.

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To implement the measure, the State Council ordered local governments to stabilize and expand vegetable farms on the fringes and in the suburbs of large cities and to set up reserves that are capable of meeting demand for five to seven days in large cities like Beijing and Shanghai.

In a statement issued after the meeting, the State Council pledged to create funding and policies favorable to vegetable production across the country.

Banks and other financial institutions were encouraged to increase lending to firms and farmers who produce vegetables.

The State Council also recommended that special railway lines be constructed to link these farming areas with major cities.

Those who spread false information to manipulate prices will be severely punished, the statement warned.

City mayors were assigned responsibility for the so-called "vegetable basket project" in their areas.

The Ministry of Agriculture initiated the "vegetable basket project" in 1988 in a bid to improve the production and marketing of vegetables and other food items.

Under the project, about 4,000 wholesale agricultural produce markets were established across the country.

State Councilors at the meeting presided over by Premier Wen Jiabao heard that vegetable prices had fluctuated sharply in some large cities, with supplies affected by summer flooding.

"On one hand, it is difficult for farmers to sell their vegetables. On the other hand, urban residents have to put up with expensive prices for vegetables," the statement said.

"This coexisting contradiction has become increasingly serious," the statement said. "We will strengthen the government's macro control over the vegetable market and give full play to the market mechanism to increase vegetable supplies."

Boosted by rising food prices after widespread flooding, China's consumer price index, one of the main gauges of inflation, rose to 3.3 percent year on year in July, its highest level since Oct 2008.

The July consumer price index figure (CPI) has exceeded the 3 percent target for the year that the government set in March.

Food prices, which account for about a third of the weighting in calculating the CPI, climbed 6.8 percent in July, compared with June's increase of 5.7 percent, the National Bureau of Statistics said in its monthly report last week.

As a result of severe flooding across China, vegetable prices rose 22.3 percent in July from the same period last year, while grain prices were up 11.8 percent and poultry product prices rose 4.1 percent, the report said.

Xinhua