China extends price intervention to fertilizer
Updated: 2008-01-22 21:46
"Farmers are expected to suffer more from costs increase if the fertilizer prices continue to soar when the plowing season is approaching," Li Xianbin, deputy president and spokesman of China's Agricultural Means of Production Group, said earlier this month.
Xu Shaohua, a villager living in a town off the Dongting Lake in South China's Hunan province, was carefully calculating whether he could continue to live on farming.
"The price of urea grew by almost a half last year while the grain price rose a little. The rice has been sold at about 1.6 yuan/kilogram in recent years. The margins are really tight," said Xu.
Last year, numerous preferential policies have been taken by the Chinese government to increase the income and improve the livelihood of rural residents.
About 150 million rural students have been exempted from tuition fees in nine-year compulsory education and more than 200 million rural residents are entitled to an allowance for living, which is provided by the central and local governments.
But experts noted the government is to some extent in a dilemma - on the one hand it has to curb the prices of agricultural products to tackle inflation, on the other hand it must introduce measures to stimulate the farmers' enthusiasm.
Surges in prices of edible oil, meat, milk, eggs and liquefied petroleum lifted the consumer price index (CPI) to 4.6 percent in the first 11 months of 2007, and an 11-year high of 6.9 percent in November, well above the government's three-percent target.
Fertilizer is one of the most important means of production for farming, so the surge in the prices of fertilizer touches the most sensitive nerve of farmers.
"We hope that the fertilizer price will not continue to rise. Otherwise, it will offset all the income. It is good news that the government will introduce price controls," said Lu Guangchun, a farmer in the city of Changyi in eastern China's Shandong province.
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