China's National Development and Reform Commission (NDRC) announced Friday that the minimum purchasing price for wheat and rice in 2008 will be raised slightly in an effort to protect farmers' interests in grain production.
The announcement said the minimum purchasing price for different types of rice ranges from 75 yuan (about 10.4 U.S. dollars) to 79 yuan per 50 kilograms; while that for wheat ranges between 70 yuan and 75 yuan.
Last year the minimum purchasing price for wheat and rice stood at 69 to 72 yuan and 70 to 75 yuan, respectively.
China started to set minimum purchasing price in 2004. When prices are too low on the market, the government will buy wheat and rice from farmers at the minimum purchasing price, so that farmers will not suffer losses from growing grain.
China harvested 500 billion kilograms of grain in 2007, achieving production growth for the fourth year in a row. But Agriculture Minister Sun Zhengcai said the output still failed to meet domestic demand for the year, and the country was forced to impose duties on grain powder at the start of year 2008 to limit export and ensure domestic supply.
Official statistics show that over the past decade, Chinese per-capita grain supply decreased from 412 kg in 1996 to 378 kg in2006.
The low price of farm produce has contributed to a reduction in the farming population, which means fewer people produce grain and more people who only consume. Meanwhile, 210 million of the 900 million rural population have begun to work for urban and township enterprises.
"The prices of agriculture products should be kept at a reasonable level, which would ensure that farmers get enough profits, and at the same time remain affordable to consumers," said Chen Xiwen, a leading agricultural policy decision maker.