Companies urged to help boost agriculture

China will encourage industrial and commercial enterprises to be active in the agricultural sector to accelerate its development, senior officials said on Friday.

Such enterprises will be supported in helping farmers in several areas, such as the supply of agricultural machinery and processing and marketing of agricultural products, said Chen Xiwen, director of the Office of the Communist Party of China Central Committee's Leading Group on Rural Work.

Investments in facility agriculture and large-scale animal husbandry are also being encouraged as enterprises always have strong finances and technological superiority to ordinary farmers, he said.

Chen was speaking at a news conference organized by the State Council Information Office on Friday, a day after the CPC Central Committee and the State Council - China's cabinet - jointly issued the first document of the year. This stressed the significance of developing modern agriculture and enhancing the vitality of rural areas.

But Chen said the seizure of farmland from rural residents for other uses should be avoided.

An access and supervisory system for industrial and commercial enterprises, which rent farmers' land for agricultural production, is being drafted, he said.

Agriculture experts and industry analysts believe the document signals the right direction for further development of the country's agriculture.

Zheng Fengtian, a professor at Renmin University of China's School of Agricultural Economics and Rural Development, said one outstanding point in this year's document is that it encourages companies to invest in rural areas while making them focus on promoting agricultural production, lest farmland be put to other uses.

"As China's urbanization deepens and the workforce rushes for jobs in cities, investing back into rural areas is an inevitable choice," Zheng said. "If the policy can be properly enforced, it could bring another opportunity for development of China's rural areas."

Chen said more than 260 million farmers have switched to non-agricultural jobs in cities, which may hamper the country's grain harvest.

Ma Wenfeng, a senior analyst at Beijing Orient Agribusiness Consultant, said that to boost investment in the industry, the government should consider offering preferential policies such as tax cuts and reductions in transport fees for agricultural companies.

"Investments in agriculture tend to have a low return, so the government should think about ways to lower the companies' operating costs," he said.

China's grain output reached 589 million metric tons in 2012, the ninth consecutive year of increased grain harvests, according to the National Bureau of Statistics.

Meanwhile, total grain imports, including soybeans, were more than 70 million tons last year, according to the Ministry of Agriculture. Imports of soybeans last year totaled 58.4 million tons, the ministry said.

But authorities said the rise in imports was mainly because of price differences between domestic and relatively cheaper international markets.

Tang Renjian, deputy director of the Office of the CPC Central Committee's Leading Group on Rural Work, said at the news conference: "There is still great potential for China to increase yields through technical advances to promote domestic production, especially in the country's major grain producing areas."

The nation is expected to reap a bumper grain harvest this year, a 10th consecutive grain yield increase, according to a forecast from the Center for Forecasting Science at the Chinese Academy of Sciences.

It projects this year's grain yields to increase by 7.5 million tons from last year to 597.5 million tons, with "neutral or less optimistic weather conditions and without natural disasters".