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SCMP Reporter

Move aimed at boosting income in rural areas
Beijing plans to raise significantly the purchase prices of various grains for national reserves and increase its own investment to boost food productivity in the latest attempt to narrow the  urban-rural income gap.
The move will see the government forking out more money to buy grain such as corn, rice and rapeseed from farmers for reserves.
The latest policies, unveiled yesterday by the National Development and Reform Commission,  follow on the heels of the central government's plan to improve rural living standards, a theme at a top Communist Party meeting this month.
The grain-price rises will take effect on January 1.
According to the commission's website, the minimum price of mixed wheat will increase by 22 fen (25 HK cents) to 1.66 yuan a  kilogram, an increase of 15.3 per cent.
Without giving details of the amount bought, the commission said the government had purchased Xinjiang  cotton for reserves at 12,600 yuan a tonne. It would help with the transport of the cotton, whose market price had dropped  in the past few months because of a decline in textile demand.
'The next step is to increase [cotton] reserves depending on the market situation,' the commission said.
The government also pledged to increase investment in agriculture so that grain production capacity could rise by 50 million tonnes from next year to 2020.
Specifically, more money would be spent on irrigation, energy, transport and drinking water. The northeast would be developed into a soya bean production base, the Yangtze River area would concentrate on rapeseed and Xinjiang would be the centre of quality cotton.
Farmers would receive more subsidies to cover rising fertiliser costs and equipment expenses. Those growing wheat, paddy rice, corn and soya beans would also receive extra subsidies, the commission said.
The government would try to stabilise fertiliser prices by  ensuring enough reserves and increasing production during low seasons.
The Communist Party put rural welfare on the top of the agenda during its Central Committee meeting in Beijing because of the widening urban-rural income gap.
According to a document issued after the meeting, party leaders agreed to let farmers transfer their  land-use rights -  in effect allowing the sale of land - to promote modernised farming.
The government aims to double the per capita disposable income of rural residents by 2020 and increase government spending on social welfare in the countryside. It also hopes to boost rural consumption by a large margin by 2020 as the mainland's  export-driven economy struggles with declines in overseas orders.
Critics have long accused the government of setting purchase prices for grain too low. Li Chenggui   of the Chinese Academy of Social Sciences  said his research found the government's grain-purchase prices last year could not match the maximum levels in 1996.
Though the government had rolled out measures to subsidise farmers and improve their living standards, Professor Li said a surge in production costs, such as more expensive fertilisers and fuel, had offset the effect of those subsidies.



Beijing to pay more for its grain reserves