Recently, the Chinese Ministry of Finance and the Ministry of Agriculture and Rural Affairs have announced that the Chinese government has decided to deploy a policy package for grain production, which will increase support for grain production. According to reports, the policy package shows clear support grain production and includes the following specific items.

• First, the policies aim to further the construction of high-quality farmland, with a goal of constructing 7 million hectares of high-quality farmland across the country.
• Second, the policies aim to strengthening the protection and utilization of chernozem (black soil), and they include measures for conserving and cultivating 1.5 million hectares of chernozem will be implemented in northeastern China.
• Third, the policies aim to implement a rotation system for cultivated land and fallow land across more than 600 thousand hectares.
• Fourth, the policies aim to increase mechanization in grain production, with a plan to increase subsidies for intelligent agricultural machinery products by 35%.

Party to increase grain purchase price and invest in new agricultural machinery

According to reports, in order to achieve the goals and tasks of this year's grain production, the Ministry of Agriculture and Rural Affairs plans to continue to give the provinces the task of food production, and assign more specific responsibilities to counties and townships. At the same time, the central government has further increased its financial support, and the minimum purchase price of rice and wheat has increased by RMB 0.02/kg compared to last year.

The Ministry of Agriculture and Rural Affairs has integrated and implemented RMB 24 billion of funds to directly support grain production, the largest amount of funds in recent years. According to data from the Ministry of Agriculture and Rural Affairs, the country will invest in over 16 million units of various agricultural machinery to fully ensure the smooth progress of summer harvesting and planting. Among these machines, there will be more than 600,000 wheat combine harvesters and 250,000 machines participating in cross-regional mechanical harvesting.

New policies also aim to guard against risks such as extreme weather and pests

Preventing food security risks is also one of the major focal points of these new policies. The director of the Plant Management Department of the Ministry of Agriculture and Rural Affairs has stated that the weather year this year is unfavorable. Extreme weather such as droughts, floods, extreme cold, and extreme heat may occur frequently, and major diseases and insect pests are also a recurring problem.

The Ministry of Agriculture and Rural Affairs has formulated an early plan for disaster prevention and mitigation, which implements scientific measures to combat disasters. The policy package this time also proposes to support all localities with timely aid to expedite the resumption of agricultural production after a disaster. The notice jointly issued by the Ministry of Finance and the Ministry of Agriculture and Rural Affairs also requires that all localities fully understand the extreme importance of food production, and in accordance with the requirements of the Party and government for food security, these authorities insist on stable farmland and stable output.

For more information, please check our resources on China’s Agricultural Market.

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