Premier Wen Jiabao has listed liberalization of grain trading and pricing and granting subsidies to grain growers as among China's priorities for reforming its grain distribution system.
Addressing a two-day national meeting that ended in Beijing Tuesday, Wen said it is high time for the country to liberalize grain trading in major production areas. He said efforts should be made to improve the pricing mechanisms, while a unified, national, open, and competitive grain market should be set up.

Beginning this year, China will introduce a system across the country to offer subsidies directly to grain growers in leading production areas to encourage growers to produce more grain, the premier noted.

The reforms must prove positive in encouraging production, increasing farmers' incomes, stabilizing the grain market, and safeguarding national food security.

He told the meeting that the state-owned dealers should restructure their operating systems, and continue to play a vital role as China's major grain distributing channel after the proposed liberalizations take place.

Chinese premier also urged State-owned companies --many of them ill-managed and money-losing -- to improve market competitiveness.

China will further improve its ability in regulating the market so as to ensure food security through protecting and increasing its production capability, and improving the role of the national and provincial grain reserve systems, the premier noted.

He said China will establish a mechanism to ensure basic balances between grain supply and demand for medium and long-term periods, as well as a market early-warning system. A long-term and stable co-operative relationship between the country' s leading grain-producing areas and areas that buy grain in large quantities from other areas will also be instituted.

(China Daily June 2, 2004)