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ReturnChina raises rice and wheat prices paid to farmers
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admin
PublishDate：
2008-03-28 15:51:00
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BEIJING: China said Friday it will pay farmers more for rice and wheat, trying to raise output and cool surging inflation that threatens to fuel unrest ahead of the Beijing Olympics.
Beijing has frozen retail prices of rice, cooking oil and other goods in an effort to curb inflation that saw food prices jump 23.3 percent in February over the same month last year. But analysts warned that holding down prices paid to farmers will discourage them from raising production and easing shortages that have been blamed for rising food costs.
The latest move is meant to "raise farmers' enthusiasm for growing grain and make progress in the development in grain production," the Cabinet's National Development and Reform Commission said in a statement. It said minimum grain prices paid to farmers would rise by up to 9 percent.
Prices started to rise sharply in mid-2007 as China ran short of grain and pork, the country's staple meat.
The jump in food costs has hit ordinary Chinese hard in a society where families spend up to half their incomes on food, prompting unease among Communist leaders about unrest just as they are hoping the Olympics will showcase China as stable and prosperous. Bouts of inflation in the 1980's and 90's led to public protests.
Premier Wen Jiabao, China's top economic official, has said cooling inflation is the government's top priority. He said Beijing hoped to hold this year's overall inflation to 4.8 percent, equal to the 2007 rate, but outside economists have been forecasting full-year price rises of up to 6.4 percent.
Beijing has been prodding farmers to raise production by promising free vaccinations for pigs and other aid. Authorities say China has adequate food supplies. But devastating snowstorms that hit the south in January and February wrecked crops and disrupted shipping, adding to inflation pressures.
"China should increase policy support" and give "stronger signals to mobilize and protect the initiative of farmers to plant crops," Wen said Thursday during a nationwide video conference with government officials, according to the state Xinhua News Agency.
Under the latest order, prices paid for rice will rise by 7 yuan, or $1, for every 50 kilograms, or 110 pounds, to 77 to 82 yuan, depending on the type, according to the National Development and Reform Commission.
Wheat prices will rise by 3 to 5 yuan, to 72 to 75 yuan per 50 kilograms.
The Communist government regards meeting most of China's grain needs from domestic sources as a matter of national security. It operates a network of grain-buying offices and a grain stockpile. It has been releasing supplies to ease shortages.
The exact size of the stockpile is a secret, but Wen said this month that it is 150 million to 200 million tons.
The government also has frozen prices for gasoline, electricity, public transit and school fees. Chinese oil companies have complained the controls are causing them huge losses by blocking them from passing on record-high crude prices to consumers.
That has prompted refiners to refrain from investing in expanding production, leading to diesel shortages that have disrupted trucking in crucial export areas of the fast-growing southeast region.
Source: www.iht.com
Beijing has frozen retail prices of rice, cooking oil and other goods in an effort to curb inflation that saw food prices jump 23.3 percent in February over the same month last year. But analysts warned that holding down prices paid to farmers will discourage them from raising production and easing shortages that have been blamed for rising food costs.
The latest move is meant to "raise farmers' enthusiasm for growing grain and make progress in the development in grain production," the Cabinet's National Development and Reform Commission said in a statement. It said minimum grain prices paid to farmers would rise by up to 9 percent.
Prices started to rise sharply in mid-2007 as China ran short of grain and pork, the country's staple meat.
The jump in food costs has hit ordinary Chinese hard in a society where families spend up to half their incomes on food, prompting unease among Communist leaders about unrest just as they are hoping the Olympics will showcase China as stable and prosperous. Bouts of inflation in the 1980's and 90's led to public protests.
Premier Wen Jiabao, China's top economic official, has said cooling inflation is the government's top priority. He said Beijing hoped to hold this year's overall inflation to 4.8 percent, equal to the 2007 rate, but outside economists have been forecasting full-year price rises of up to 6.4 percent.
Beijing has been prodding farmers to raise production by promising free vaccinations for pigs and other aid. Authorities say China has adequate food supplies. But devastating snowstorms that hit the south in January and February wrecked crops and disrupted shipping, adding to inflation pressures.
"China should increase policy support" and give "stronger signals to mobilize and protect the initiative of farmers to plant crops," Wen said Thursday during a nationwide video conference with government officials, according to the state Xinhua News Agency.
Under the latest order, prices paid for rice will rise by 7 yuan, or $1, for every 50 kilograms, or 110 pounds, to 77 to 82 yuan, depending on the type, according to the National Development and Reform Commission.
Wheat prices will rise by 3 to 5 yuan, to 72 to 75 yuan per 50 kilograms.
The Communist government regards meeting most of China's grain needs from domestic sources as a matter of national security. It operates a network of grain-buying offices and a grain stockpile. It has been releasing supplies to ease shortages.
The exact size of the stockpile is a secret, but Wen said this month that it is 150 million to 200 million tons.
The government also has frozen prices for gasoline, electricity, public transit and school fees. Chinese oil companies have complained the controls are causing them huge losses by blocking them from passing on record-high crude prices to consumers.
That has prompted refiners to refrain from investing in expanding production, leading to diesel shortages that have disrupted trucking in crucial export areas of the fast-growing southeast region.
Source: www.iht.com
