High costs in grain production are posing challenges to China's agricultural competitiveness, a report said.

Rapidly-growing labor and land costs have boosted prices of homegrown farm produce to levels near or even higher than imported grain, according to a report by the Rural Development Institute of the Chinese Academy of Social Sciences.

The report said domestic agri-businesses are losing ground while products from their foreign peers are securing more market shares.

The combined costs per mu (around 0.07 hectare) of rice, wheat and corn hit 1,090 yuan (more than 160 U.S. dollars) in 2015, 2.27 times that of 2007. Also weighed on by rising costs, many producers of industrial crops ranging from soybeans to rapeseeds have suffered from losses or falling profit margins.

The report said the phenomenon has pointed to the low efficiency of China's agricultural operations, calling for efforts to promote mechanization and improve rural governance.

As the world's major grain producer and importer, China is striving to modernize its agriculture, with supply-side structural reform to enhance quality and efficiency.