(Xinhua)
Updated: 2008-01-31 19:52

Last year, the country's consumer price index (CPI) rose 4.8 percent last year, with the inflation indicator hitting an 11-year high of 6.9 percent in November, well above the government target of three percent.

In particular, the average pork price nationwide rocketed 48.3 percent in 2007 from a year earlier, mainly due to supply shortages of pigs resulting from little profits in raising them and an outbreak of an infectious pig disease.

Since food has a weighting of 32.74 percent in the CPI, the stable supply of such commodities, farm produce in particular, will be a decisive factor behind China's efforts to beat inflationary pressures.

China has been subsidizing farmers in recent years in order to boost grain output to feed the country's 1.3 billion population. Li gets 15 yuan for each mu of his rented paddy field. Farmers who plant on their own farmland can get around 40 yuan of government subsidy per mu each year.

"If not for government subsidies and the exemption of agricultural taxes, farmers would make little money from planting crops given the high costs," said Yu Yongqing, head of Li's village.

The village official worried if farmers did not benefit more from planting crops, they may move to cities to find jobs for more money, posing a threat to the labor source for grain output.

On Wednesday, the country issued its first document this year, calling for greater efforts to increase grain output supply as part of the efforts to combat mounting inflationary pressures.

The document stressed that increased spending on agriculture this year should be a greater percentage than last year, the increase in fixed-asset investment in rural areas should exceed the year-earlier level and farm subsidies should be raised.

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