MercoPress. South Atlantic News Agency

Vietnam limits rice exports; China boosts pay to farmers

Vietnam became the latest rice-producing country to limit exports of the grain and China announced on Friday higher payments to farmers both rice and wheat in an attempt to boost crop production and cool surging inflate

Vietnam, the world's second-biggest rice exporter, behind Thailand, said it would cut exports by 22% this year, following similar moves by India and Egypt. Analysts said the Vietnam government wants to stabilize domestic prices. Global rice prices have soared by 50% in the past two months raising supply concerns across Asia. While rice prices have risen primarily because of increasing demand from population growth and better living conditions, they have also been lifted by poor recent crops in Vietnam. Neighboring Cambodia has also recently introduced limits on rice exports. With the world's largest population to feed and the largest planter of rice, China keeps prices subsidized. On Friday the National Development Reform Commission said it would pay farmers more for both rice and wheat in an attempt to boost crop production and cool surging inflate. The increases were announced one day after Beijing pledged an increase of 3.6 billion U.S. dollars to this year's rural budget, aimed at boosting farm production and quelling an inflationary surge blamed on rising food prices and tight supplies. NDRC said in a statement that the minimum purchase prices for rice would range from 77-82 Yuan per 50 kilograms, while that for wheat would be 72-77 Yuan. The previous hike on February 8 raised minimums for rice and wheat to 75-79 and 70-75 Yuan. China began setting minimum purchase prices in 2004 to encourage production. The Consumer Price Index, in which food prices have a large weight, hit a near 12-year high of 8.7% in February. The government earlier froze prices of grain, cooking oil, oil products and other basic goods in an effort to cool inflation. These new moves will help curb fast-rising prices and ensure sufficient grain supplies to combat inflation, said Song Hongyuan, the deputy director of the Research Center for Rural Economy under the Ministry of Agriculture. "China should increase policy support (for agriculture) with clearer more direct and stronger signals to mobilize and protect the initiative of farmers to plant crops" Premier Wen Jiabao said during a video conference on Thursday broadcasted to all the country. The Chinese cabinet agreed that the extra funding be invested in subsidizing farmers' purchases of fuel, fertilizer and pesticides. The new sum took such subsidies to 63.8 billion Yuan this year. Subsidies apply to 29.5 million hectares of rice, 13.4 million ha of wheat and 13.4 million ha of corn.