With the dramatic rise in pork price, the Chinese government has said that it plans to spend 6.5 billion yuan (US$850 million) this year to contain pork prices.

The massive government allocation, including 3.8 billion yuan from the central government, will be mainly used for a soon-to-be-established insurance scheme that will cover female pigs against illness and natural disasters, said sources with the Ministry of Finance.

Pig breeders will get an annual subsidy of 50 yuan for every female pig insured.

The central government will also spend 470 million yuan this year to relieve the impact of rising food prices on the lives of low-income people.

Another 280 million yuan will be allocated to subsidize college students from low-income families.

A spike in the price of pig feed and cases of blue-ear disease among the nation's swine has seen pork prices surge dramatically this year.

According to official figures, 19,000 pigs were killed after outbreaks of the disease in 194 Chinese counties up until the end of May.

Some farmers are now reluctant to raise pigs for fear they might be stricken by the disease.

The central government has responded by making available 285 million yuan for a mass immunization program, which local governments will also subsidize.

Figures from the Ministry of Agriculture show live pigs were 71 percent more expensive in April than in March, and pork was 29.3 percent higher, largely due to tighter supply.

In Beijing, pork prices have gone up more than 30 percent, while wholesale prices in Shanghai hit 16 yuan (US$2.1) per kilogram, a 10-year high, up 20 percent month-on-month. Food prices have climbed this year, pushing China's inflation rate to 3.4 percent in May compared with a year earlier.

(Xinhua News Agency June 24, 2007)