China Promises $9 Billion in Aid to Help Farmers Recover From Snowstorms

2008-2-21  From Asia Times Online

BEIJING (AP) -- China will spend $9 billion to help farmers hit by brutal January snowstorms recover for spring planting, a state news agency said Friday.

The money is meant for agricultural goods and grain subsidies, the Xinhua News Agency said, citing the Finance Ministry.

Storms that began Jan. 10 and covered much of China's south wrecked thousands of acres of crops, killed 69 million farm animals and destroyed greenhouses and other farm equipment.

The government has warned that supplies of fresh vegetables will run low in March due to the snow but says overall food supplies should be adequate.

"Vegetable selling will be severely impacted due to the bad weather," said Wei Chao'an, Agriculture Ministry deputy minister, quoted by Xinhua.

The shortages are especially sensitive because the government already was struggling to rein in surging inflation blamed on a scarcity of pork, grain and other food items.

Storm-induced food shortages pushed China's inflation rate in January to its highest rate in 11 years. The government said food costs were up 18.2 percent from the same month last year. Economists warned that prices could rise even faster in February as the full impact of the storms is felt.

The government last week promised $1.25 billion in aid to stricken areas to rebuild houses and help the poor pay for food and heat.

Chinese banks have been ordered to lend more to help farmers recover.

"The government is striving to give preferential policies to the farming sector, those who plant grain crops and industrial sectors that purchase agricultural equipment will get direct subsidies on time," Xinhua said.