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    China / Society

    Corn price to be set by market

    By Wang Yanfei (chinadaily.com.cn) Updated: 2016-03-28 20:04

    The nation's top economic planner issued guidance about corn pricing on Monday in a step by the government to open more space for market principles to operate.

    "The price of corn will be completely determined by the market," said Liu Xiaonan, deputy head of the Economics and Trade Department of the National Development and Reform Commission.

    Farmers will still be able to get subsidies, but instead of adding subsidies to the corn price as before, the government will directly provide subsidies to planters in major corn-producing regions in northeastern provinces.

    Local governments will be able to make more detailed plans for the subsidies after studying the guidance, Liu said.

    Liu said pricing reforms for other major agricultural products are expected to be adopted in the future.

    The new policy comes after Premier Li Keqiang's remarks in presenting the Government Work Report during the two sessions earlier this month emphasized the importance of improving the price-setting mechanism for grain and other important agricultural products.

    Liu said the new pricing scheme was made because overcapacity of corn production has stood out in recent years, as the country subsidized farmers on a large scale and stored surplus crops.

    China's total corn output was 224.6 billion kilograms last year — 49 billion kg more than consumed.

    Song Hongyuan, head of the Research Center for Rural Economy under the Ministry of Agriculture, said the new policy is helpful for improving the efficiency of subsidies and dealing with structural problems in agriculture.

    "Without a one-size-fits-all subsidies scheme, regions with fewer advantages in corn production will leave the market and turn to other products that could meet market demand," Song said.

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