THE government will soon increase its subsidies for farmers who plant grain and raise its minimum purchasing prices for grain as part of efforts to fight inflation.

In a regular meeting, the State Council decided to take the action as part of an overall increase in incentives for farmers to plant grain and guarantee adequate supply of other agricultural products, Xinhua said late Wednesday.

“Stepping up agricultural production plays a crucial role in maintaining sound yet rapid economic growth, keeping inflation in check and maintaining overall stability,” Xinhua said.

The report was short on details, but said more specific implementing regulations would be issued soon.

China is facing its worst inflation in nearly 12 years and the government has pledged to take a range of steps to check price rises.

Increases in grain prices have so far been modest. They rose by 6 percent in the year to February, compared with 8.7 percent for overall consumer inflation and 41 percent for cooking oil.

But some economists have expressed concern that, with prices for vegetables and meat rising more quickly than those of staples like rice, wheat and corn, farmers could have less of an incentive to plant them, leading to future supply shortages.

Premier Wen Jiabao said earlier this month the country’s grain reserves stood at 150-200 million tons, adding that it was sufficient to keep grain price rises in check.  (SD-Agencies)