According to its recent deal with four provinces in south and southwest China and the southwest municipality of Chongqing, Henan would sell 4.95 billion kilograms of grain and vegetable oil to these regions to make up for their insufficient agricultural production, said Vice-Governor Wang Mingyi.

Meanwhile, inter-provincial cooperation would be carried out in food processing, sales network construction and the technology and information sectors, he said.

With its 40 billion kilograms of annual grain output, Henan provides 7.5 billion kilograms of marketable grain to the domestic market every year.

By the end of last October, Henan had stockpiled 14.4 billion kilograms of grain, 10.4 billion kilograms of which were left in the open air.

Experts said inter-provincial cooperation on grain supply will help farmers in Henan survive the challenges of China's accession to the World Trade Organization and encourage other provinces to reschedule their agricultural production in line with the new market demands.

The provincial government of Henan had taken measures to protect grain production by providing local farmers with new technologies and better services, said an official.

To date, a large grain supply network has been set up in Henan, with a central wholesale market in the provincial capital of Zhengzhou that ensures an annual grain supply of two billion kilograms, and some 100 regional and county-level markets with an aggregate annual supply of six billion kilograms.

Henan is planning to expand such cooperation with six more grain supply provinces in the near future, said local officials.

Grain from Henan Province will fill the gap in the supply of wheat and corn in Sichuan Province, southwest China, of 1.5 billion kilograms a year, said a source from Sichuan.

Following their cooperation with Henan and Guangxi Zhuang Autonomous Region in south China has written off its 150 million kilograms annual supply from local farmers, said Sun Yu, vice-governor of the region, which has restructured agricultural production in line with market demands by replacing non-competitive paddy rice with subtropical fruits and vegetables.

The eastern part of the region has developed into a major vegetable base for the Guangdong, Hong Kong and Macao markets. A local farmer said his income had tripled since he took up tomato planting to replace rice.

It was a must for the Chinese government and enterprises to understand rules of the international market, which was vital for China to meet world standards in its grain supply, said Dr. Cheng Guoqiang, a researcher with the Development Research Center of the State Council.

China has vowed to ensure sufficient food to sustain its huge population and increase the income for farmers, who account for roughly 70 percent of China's total population.

Official figures show China's total output of grain for the year 2001 was 452.62 million tons, down by 2.1 percent from the previous year.

(Xinhua News Agency March 27, 2002)