BEIJING: China said Friday it will pay farmers more for rice and wheat, trying to raise output and cool surging inflation that threatens to fuel unrest ahead of the Beijing Olympics.
Beijing has frozen retail prices of rice, cooking oil and other goods in an effort to rein in food costs that jumped 23.3 percent in February over the same month last year. But analysts warn that holding down prices paid to farmers will discourage them from raising production and easing shortages blamed for the increases.
The latest move is meant to "raise farmers' enthusiasm for growing grain and make progress in the development in grain production," the Cabinet's National Development and Reform Commission said in a statement announcing the change. It said minimum grain prices paid to farmers would rise by up to 9 percent.
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