China's weakening grain production capability in recent years has made the government take timely and effective measures to increase its grain production this year.

Last year China's total grain production reached about 430.65 billion kilograms, dropping 5.8 percent from 2002, because of reduced planting acreage and ensuing natural disasters.

The State Council attaches great importance to grain production as well as increasing farmers' income, targeting a 25-billion-kilogram rise this year, which will be quite rare in China's history if it is realized.

The government has decided this year to further liberalize purchasing prices for grain, and set minimum purchasing prices for some varieties of rice so as to protect farmers' interests and spur rice production.

The minimum price for japonica rice was set at 1.5 yuan per kg while the price for early indica rice is 1.4 yuan per kg, according to the decision.

The Chinese government allocated 10 billion yuan (US$1.21 billion) in subsidies earlier this year from its grain risk fund to the country's grain farmers in 13 major grain-producing provinces and regions.

Besides, the government will reduce the agricultural tax burden on farmers by 7 billion yuan (US$846 million) this year, with a possible rescinding of the tax within three years, two years ahead of the schedule promised by Premier Wen Jiabao.

The State Council has set Jilin and Heilongjiang as pilot provinces, where agricultural taxes, excluding tobacco tax, would be exempted this year.

Li Shuhai, a grain grower in Heilongjiang Province, said the subsidy and the exemption from agricultural tax would increase his net profit by 1,000 yuan (US$121) this year.

These policies certainly encourage farmers to produce more grains. Rice prices are also on grain growers' side. In some cities, residents have found the rice price doubled over the first quarter this year. Official figures showed during last fall and winter period, the overall nationwide grain price had climbed about 20 percent year on year.

"The overall situation of grain crops growing in China this spring is better than last year," said Chen Mengshan, director in charge of the crops cultivation department under the Ministry of Agriculture.

This year's spring sowing acreage has grown about 3 percent over last year, and 36.3 percent of crops now in farmland fell into the "best quality" category, 1.4 percentage points higher than last year and 5.9 percentage points higher than before the winter, statistics from the ministry showed.

(Xinhua News Agency April 25, 2004)