But for Liu Tieqiang, a farmer living at Babao county of Liaoning province, who is growing 2.7 hectares of paddies and 0.7 hectares of corn, a 20,000 annual net income would not be satisfactory as he is concerned over the climbing cost of agricultural facilities, fertilizer and seeds.

He said the subsidy for individuals is limited, as the agricultural costs have increased by nearly 50 percent.

Li of the Chinese Academy of Agricultural Sciences said that the grain subsidy has very few effects on improving farmers' income and farmers growing grain gain less than those who grow economic crops.

"Sometimes, they abandon planting grain then turn to growing vegetables, fruit or cotton," he said.

Soaring oil prices have caused the price of agricultural equipment to rise, which has diminished incomes for farmers and grain processors, he added.

Due to the rising price of fertilizer, the agricultural department at all levels has made great efforts to promote the Soil Test for Recommendation Fertilization Project, which refers to fertilize crops after tests on shortage of the soil's components.

The project has been adopted in 8 million hectares of crops across China, reducing use of fertilizers by 300,000 tons, and increasing yield per hectare by 8 percent.

Also, the technology can save 645 yuan per hectare, and over 5 billion yuan in total.

In a bid to ensure the country's food safety and grain reserves, the government has worked out compulsory requirements on a planting area and varieties of grain.

Since the price of wheat on the international market skyrocketed by 112 percent last year, while that of corn rose by 47 percent, China's food safety still needs much attention, said Jiang.

Although, China has abundant grain reserves standing at 150 to 200 million tons, some agricultural products, especially oil crops, should be given more policy preference and investments, Li said.

China's agricultural authority has expressed their confidence in the summer harvest this year, as more than 80 percent of the harvesting work across the country has been completed.

China's summer grain yield per unit will hit a record high and the total amount will increase in the fifth year if no serious disastrous weather occurs, according to Sun Zhengcai, minister of Agriculture.

(China Daily July 2, 2008)