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Expert criticizes food subsidy policy
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Set examples to prevent abuse

China's food security became a hot topic recently after grain scalping scandals involving the country's grain reserves, and false declarations made in Dangtu town, Anhui Province and Fujin city, Heilongjiang Province.

O: The fact that China's grain prices are lower than the international market price has led to grain smuggling across both the southern and northern borders. What is your view?

Y: This is illegal and the government has taken steps to stop it. Shortages caused by grain smuggling would result in a major crisis.

O: Some say the grain inspection system is flawed, what's your opinion?

Y: Inspectors need to travel incognito on fact-finding missions. If people know about inspections in advance it's easy to pull the wool over inspectors' eyes. So spot checks work. The cases in Dangtu and Fujian should send a message that grain smuggling and false declarations will be punished severely.

Flawed grain subsidy policy

O: Everyone is talking about the price of grain. What is your view?

Y: The government has taken steps to control prices but it's hard to get the grain price right because high prices cause inflation while low prices decrease farm incomes and lead to a fall in output.

O: Can you suggest ways to improve grain production?

Y: Because China's average arable land is poor, large scale, concentrated operations are one way forward.

Subsidies have brought some benefits but I believe the policy needs improving.

O: What do you mean?

Y: There are two problems. Firstly, the subsidies are too low. Farmers remain poorer than migrant workers. Secondly, they are not rightly targeted. The subsidy farmers get should depend on how much grain they sell to the national reserve, not simply the size of their land holdings. In this way we can provide incentives to increase production.

Furthermore, the government spends too much money on petrol subsidies. We need to develop public transport, but 30 percent of petrol subsidies go to private car owners. If we shift some of the petrol subsidy to agriculture, it would play a positive role in encouraging farmers to grow grain.

(China.org.cn September 28, 2008)

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