China has raised the minimum purchase price for early rice to 1.54 yuan ($0.226) per kilogram this summer, an increase of 10 percent from a year earlier, the National Reform and Development Commission (NDRC) said on Monday. Minimum prices are a tool for China to underpin rural incomes and help ensure that farmers earn enough money to continue to plant grains, as planners strive to ensure self-sufficiency.
Although the adjusted minimum price is well below current market prices in central China, some remote areas lack sales channels other than the state reserves system. Low purchase prices by the reserves bureau are a source of discontent in some poor rural areas, social scientists have said. The minimum purchase price would be mandatory in the provinces of Anhui, Jiangxi, Hubei, Hunan and Guangxi from July 16 to September 30.
Other provinces could decide whether to implement the price, the NDRC said on its website (www.ndrc.gov.cn).When the market price is lower than the minimum purchasing price, the China Grain Reserves Corporation (Sinograin), its subsidiaries, provincial grain reserves in these five provinces and seven major consumption provinces will make purchases at the minimum price. Farmers are hesitant to sell rice because they believe prices will rise further in the future. Corporate purchases have been very limited, the Shanghai Securities News said on Monday.
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