At a two-day meeting that ended here Tuesday, Premier Wen Jiabao said it is high time for the country to liberalize grain trading in major grain-producing areas. The grain pricing mechanism should be improved and a unified, national, open, and competitive grain market set up.

This year, China will introduce a nationwide system to provide subsidies directly to growers in leading grain-producing areas in order to encourage them to increase production, the premier said.

Reform measures must encourage grain production, increase farmers' income, stabilize the grain market, and provide national food security.

State-owned grain dealers should restructure their operating systems, Wen said, and continue to play their vital role as China's major grain distribution channel after the proposed liberalization of trading and pricing.

However, the state-owned grain companies--many of them ill managed and operating in the red--must improve market competitiveness.

China will further improve its capability to regulate the grain market to ensure food security by protecting and increasing grain production capacity and improving the roles of the national and provincial grain reserve systems.

Wen added that China will establish a mechanism to ensure basic balances between grain supply and demand for medium and long-term periods, as well as a market early-warning system. It will institute a long-term and stable cooperative relationship between the country's leading grain-producing regions and the areas that buy grain in large quantities.

Vice Premier Zeng Peiyan and Vice Premier Hui Liangyu were among those attending the meeting, which also included leading provincial-level officials.

(Xinhua News Agency June 2, 2004)