Soaring food prices are bringing little benefit to farmers, who receive only 30 percent of in-store prices. And they are being squeezed by increased production costs.

"Prices of major farm products, including grain, cotton, oil, vegetables, fruits, livestock products and aquatic food products, have been rising steadily, and the price rises are larger than before, but they are still relatively moderate," said Wang Fang, an official with the Department of Agriculture of Shandong Province.

"But price of some products, such as spring onions, ginger and garlic, have rocketed," Wang added.

"But we should remember that domestic farm products have long been sold at relatively low prices," said Wang, adding that "when we talk about the recent hikes, we need to consider the previous low prices of farm products."

Rising labor costs are the main reason for increased prices of farm products. Labor-intensive farm industries, such as vegetable, cotton and peanut growing have been the most affected.

As migrant workers leave to work in cities, a shortage of seasonal workers has become a problem and pushed up labor costs.

And prices of other inputs such as fertilizer, pesticide and agricultural machinery have also seen rapid growth recently.

Rising transportation costs are another factor.

Rising costs have played a major role in pushing up the prices of farm products, Wang said.

The Department of Agriculture of Shandong province said that compared with housing, tobacco, alcohol and energy products, the rises in the prices of farm products have been relatively moderate.

Wang said that the outlook for prices in 2011 would depend on macroeconomic policies, supply and demand, and how much costs rise.

Shandong agricultural experts and agriculture institutions said the government should not impose controls that interfere with the market because this would be a disincentive to farmers to produce and would push prices even higher.