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China focus

Cities and countryside must integrate to ward off looming grain crisis

By RJ Whitehead , 16-Jan-2013
Last updated on 16-Jan-2013 at 09:26 GMT

Food policymakers in China have had a busy few days with party leadership outlining the need for agricultural modernisation, the government demanding improvements in logistics and the food watchdog offering rewards for whistleblowers.

First, the vice-premier announced that agricultural modernisation was an essential foundation for all economic and social growth, especially as it comes on the back of a significant increase in urban populations. To promote increased agricultural output at a time when workers are leaving the fields for the cities, he urged agricultural planners to find ways for urbanisation to complement agricultural modernisation.

Chairing a meeting at the Academy of State Administration of Grain, Li Keqiang remarked: “China's reforms commenced from the countryside about 30 years ago. We will still rely on reforms and innovation to keep and manage the country's granaries and promote the new four modernisations."

The "new four modernisations” are industrialisation, informatisation, urbanisation and agricultural modernisation.

Li’s remarks came as the Chinese Academy of Social Sciences released its annual report on China’s urban-rural integration, which revealed that a significant number of the rural labour force is continuing to move to cities. It said that a shortage of agricultural workers is fast becoming a key factor in hampering the country’s grain output.

Official figures show that China's grain output in 2012 rose 3.2% year-on-year to nearly 590m tonnes. However, the country faces a tightening grain supply amid increasing demand driven by population growth.

With global grain prices running high, the vice-premier said it was essential for the country to focus on its production of staples. “We can only rely on ourselves,” he said, adding that farmers should be integrated into surrounding towns, instead of planners building cities seemingly at random. 

Cutting logistics costs

Meanwhile, China’s cabinet issued an order for local authorities to implement a range of measures to cut the cost of logistics for farm produce as a means to combat rising food prices.

According to the Xinhua state news agency, the measures include lowering electricity and water usage fees for those engaged in the production and distribution of farm produce, cutting administrative fees at markets, easing the transportation of farm produce and reducing taxes on major products.

The new pricing systems for electricity and water usage must be implemented before June 30, the circular said.

The policy comes amid rising farm produce prices, which have been growing for the eleventh straight week, according to statistics from the Ministry of Commerce.

Whistleblowers to be rewarded

At the same time, China’s food and drug watchdog, the State Food and Drug Administration, announced a system of rewards that will be given to individuals who “report illegal activities so as to determine, control and eliminate potential risks concerning food and medicine.”

Whistleblowers could receive awards of up to RMB300,000 (over US$48,000) per case, depending on the accuracy of information provided, and the proximity of the individual to the investigation. However, in spite of this ceiling, national and provincial food and drug authorities could raise the limit in cases of nationwide influence.

Although similar guidelines were set in 2003, this is the first time that food has come under the purview of whistleblowing legislation.

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