The central government is accelerating the pace of paying subsidies to grain growers in major farming areas of the country as it allocates 940 million yuan (US$113.5 million) especially to rice growers in seven provinces recently.

Meanwhile, the Ministry of Finance Wednesday urged local governments in 13 grain producing provinces and autonomous regions to pay 10 billion yuan (about US$1.2 billion) set aside from the national grain risk fund to farmers by the end of June.

This move constitutes a crucial measure that the government took to reverse the declining trend of grain production over the past few years. As grain prices lingered at lower prices, Chinese farmers lost the motive to grow grain. Grain output dropped from an all time high of 500 million tons in the mid 1990sto below 450 million tons in 2003.

Yang Bangjie, deputy director of the Planning and Research Institute under the Ministry of Agriculture, said if the declining trend continued to exacerbate, it will pose threats to China's grain security and even have negative impacts on the national economy.

In the past, the Chinese government's grain subsidies went mainly to wholesaling and distributing sectors and grain growers had in fact received little benefits from government aids. In order to offer incentive to farmers growing grains, the Chinese government has decided to spend 10 billion yuan in direct subsidies to grain growers 13 grain producing provinces and autonomous regions in 2004.

Sources from the Ministry of Finance said it has already allocated the funds to special provincial accounts at the Agricultural Development Bank. The ministry urged the provincial governments to remit the money to county-level accounts by the end of March or in early April, so as to ensure farmers will receive part of the subsidies before the spring sowing season.

The ministry also told the local governments to pay the full sum of the subsidies to farmers by the end of June.

In order to ensure millions of farmers will benefit from government subsidies, the ministry required local governments to publicize all details about the use of the grain funds. It will seriously penalize those who divert or embezzle the grain subsidies, the ministry warned.

(Xinhua News Agency April 1, 2004)