China to give farmers $3.1 bln in subsidies amid rising costs
Cabinet says funds will ensure farmers keep growing crops
Government had earlier urged regions to boost fertiliser supply
Adds detail, background
BEIJING, June 18 (Reuters) - China will grant 20 billion yuan ($3.1 billion) in subsidies to grain farmers this year to offset soaring fertiliser and diesel costs, the country's cabinet said on Friday, in the government's latest attempt to manage the impact of rising commodity prices.
The one-time subsidies will help stabilise incomes, the cabinet was cited as saying by state broadcaster CCTV after a regular meeting, as China looks to ensure its farmers are incentivised to keep producing food for the world's most populous nation.
"Subsidies should be paid out as soon as possible, so as not to miss the farming season," the cabinet added after the meeting led by Premier Li Keqiang, pledging to keep farmers keen on growing crops for the summer harvest by calling for increased supply of agricultural raw materials.
The cost of diesel, a refined oil product used as a fuel in farm machinery, has jumped this year as benchmark crude oil prices LCOc1 have rallied some 40% on the back of a recovery in energy demand following the coronavirus outbreak.
Fertiliser prices are also heavily influenced by energy costs and China's agriculture ministry had earlier on Friday urged regions to strengthen supply of fertiliser during the summer amid record prices and tight stocks.
($1 = 6.4374 Chinese yuan renminbi)
(Reporting by Judy Hua and Kevin Yao; Additional reporting by Tom Daly; Editing by Alex Richardson and Andrea Ricci)
((firstname.lastname@example.org; +8610 5669 2128;))
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.