China to shore up grain purchase, storage

China will step up efforts to purchase and store grain and build more granaries as its grain output rises, according to an official statement on Wednesday.

In 2014 and 2015, the country should build new grain-storage facilities capable of holding 50 billion kg of grain, concentrating them in its northeast and south, said the statement, issued after a State Council executive meeting presided over by Premier Li Keqiang.

The meeting concluded that China should innovate in financing for granary construction by guiding social capital to participate in the process.

It should also support the construction of storage buildings with drying facilities by farmer cooperatives and major specialized farming households in the main grain-producing areas.

In 2013, China's grain output rose 2.1 percent from a year earlier to 601.94 million tonnes, marking the 10th consecutive year of growth.

"This year's summer grain is set to see another bountiful harvest, but granary capacity is insufficient on the whole and seriously inadequate in some regions," the statement said.

As a result, grain storage is not only an urgent task, but also an important mission in the long term, it said.

China implements a policy of national grain purchase and storage in an effort to adjust total grain supply, stabilize the grain market and make reserves for natural disaster and other emergency cases.

The country should make room for new grain by selling old grain and conduct special inspections to make sure that all national granaries are used for storing grain, according to the statement.

On the condition that farmers' interests are guaranteed, China will push for transformation from the current policies on minimum purchase prices, temporary grain purchases and agricultural subsidies to a target price system for agricultural products.

The country will start experiments with varieties of soy bean and cotton. When market prices fall below the target price, the government will subsidize farmers to ensure their earnings, it was decided at the meeting.

However, if market prices rise and lead to rapid increases in the overall price level, the government will offer subsidies to low-income people.

No exact timetable was given in the statement.

"The country must fully capitalize on the functions of foreign trade and national grain reserves in adjusting demand and supply to avoid excessive fluctuation of agricultural product prices," according to the statement.

It also said the country should guide the transfer of some industries from the east to its central and western regions in an orderly manner.

The move aims to promote balanced regional development, push forward the urbanization of the less-developed regions, create more jobs and seek economic growth at a higher level.

Local governments were urged to cultivate sound environments for receiving industries from the eastern regions by improving infrastructure and providing quality support services.

The country will give full play to market forces and meanwhile underline policy guidance to facilitate the industrial transfer, the statement said.