The State Development Commission issued a series of polices on Oct. 20 for the purpose of
ensuring grain production increase, such as higher grain procurement price, more subsidy to
farmers and more investment in agriculture.
The government’s procurement price of paddy, corn, soybeans was raised to RMB1,840 ~
1,880/MT, RMB1,500/MT and RMB3,700/MT respectively from Oct. 20 on, parallel to the current
cash market price. Wheat procurement price is to be raised to RMB1,660 ~ 1,740/MT next year,
up 13 ~ 15% over this year.
Grain production subsidy, farm material subsidy, fine seed subsidy and farm machine subsidy are
to be increased by a big margin next year. An interactive mechanism is to be set up between farm
material price and subsidy.
The government will also increase investment in agriculture to upgrade rural infrastructure and
grain productive capacity.
BOABC considers that these policies may enhance farmers’ purchasing power and greatly
promote fertilizer consumption in the future, but they are not likely to produce noticeable effect in
the short run.
