The Chinese government announced a new fiscal support policy that will increase the country's supply of live pigs, which is expected to drive down pork prices and ease inflation worries, according to a meeting of the State Council, or China's cabinet, held on Wednesday.
Recent steep increases in pork prices have had an impact on consumers and prompted price hikes in other areas, according to a statement released after the meeting.
Efforts should be made to ensure adequate supplies of live pigs and stabilize prices in the short-term, the statement said, adding that the policy will also help to avoid price fluctuations in the long-term.
The central government will invest 2.5 billion yuan ($384 million) in large-scale pig farms this year. Farmers will be able to receive a 100-yuan subsidy for each of the pigs they raise, according to the statement. They will also be eligible for 800 yuan in compensation for every pig they raise that dies from disease or other external factors, the statement said.
The Consumer Price Index (CPI), a main gauge of inflation, jumped to 6.4 percent in June, the highest level seen since June 2008 and well above the government's target of 4 percent for the year.
The price of pork has become a major driver for rising consumer prices. Pork prices surged 57.1 percent year-on-year in June.
"Stabilizing prices remains the top priority for our macro-regulatory policies," Premier Wen Jiabao has said.
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