One-time subsidies will be offered to farmers growing crops to protect them against price rises in agricultural supplies this year, according to a State Council executive meeting chaired by Premier Li Keqiang on June 18.

The decision echoed a call Premier Li made to take timely and effective measures to stabilize the prices of agricultural supplies at this crucial period for grain production and planting during an inspection tour on June 15 to Songyuan city in Northeast China’s Jilin province, where he heard local farmers’ concerns about the impact of their surging prices.

“The interests of farmers must be truly safeguarded to keep them motivated to grow crops, ” Premier Li said.

The Communist Party of China Central Committee and the State Council place high importance on grain production and food security, the Premier said, mentioning a price surge of commodities this year has notably driven up the price of agricultural supplies like fertilizers and diesel.

The meeting decided that based on China’s realities as a developing country, the government will allocate 20 billion yuan from the central budget for granting one-off subsidies to crop-growing farmers in light of the extra costs related to farming supplies for major grain crops. Measures also will be taken to better regulate the agricultural supply market and guide enterprises to beef up supplies on the domestic market.

“Now is a crucial time for summer harvest and planting, so the subsidies should be issued as soon as possible, to keep up with the farming schedule, ” Premier Li said.

Another decision made at the meeting was to expand the application scope of two types of farm insurance.

This year, 500 counties with high crop yields in 13 major grain production provinces will have full-cost insurance on planting rice and wheat. It will cover costs for seeds, pesticides, fertilizers, land, labor, and losses from natural disasters, plant diseases, and insect pests, among others. Those planting corn will get insurance that covers losses due to price and output fluctuations.

The two types of insurance, with protection amounting to up to 80 percent of incomes from planting target varieties covered, will be adopted in all counties of the same category in major grain production provinces next year.

Fiscal subsidies also will be increased for insurance premiums, at no lower than 25 percent from provincial-level funds, and at 45 percent of premiums from the central budget targeting central, western and northeastern regions.

“Agriculture is a sector that helps maintain public confidence and ensures China's stability, ” Premier Li said, emphasizing the importance of the one-off subsidies and market-oriented methods, such as insurance, in shielding farmers from risks and stabilizing their farming gains.