The central government plans to provide RMB78.9 billion cash subsidy to farmers this year, including subsidy to grain production and subsidy to farm machine purchase, an increase of RMB36.2 billion over last year and more than any other year before.
Of the total, the subsidy to farm machine purchase is RMB4 billion, a double of last year. The subsidy to the purchase of a large cotton harvester is as much as RMB200,000.
Furthermore, the government will provide RMB1 billion to subsidize policy-oriented major crop insurance in Jilin, Inner Mongolia, Xinjiang, Jiangsu, Sichuan and Hunan this year.
BOABC considers that the increased subsidy helps ease farm product inflation, as can be illustrated by last year¡¯s slower cotton price rise than that of other farm products. The nation¡¯s rapid GDP growth at a pace of over 10% a year for five years on end also requires correspondingly a rapid agricultural growth.
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