Regulation and Policy 

China Defines Grain Purchase Pricing Policy (August 1, 1999) 

China's State Development Planning Commission has recently issued an urgent circular clarifying pricing problems in purchase of grain in 1999. 

The circular states: 

1.        Under the order purchase system, localities are allowed to adjust their order purchasing prices respectively. 

In 1999, Heilongjiang, Jilin, Liaoning, Inner Mongolia, Hebei and Shaanxi and some southern provinces can lower the order purchasing and protective prices for Spring wheat and early long-grained nonglutinous rice. Order purchasing and protective prices for some poor quality products can be even lowered below the production cost. 

2.        Quality and technical supervision department, together with grain and agricultural departments are required to work out grain quality standards as soon as possible to enlarge the price differentials between quality and ordinary grain varieties. 

3.        State-owned grain purchasing and marketing enterprises are required to strengthen the concept of quality and market.  

4.        All localities are required to rationally arrange the price differentials in different seasons to alleviate the government' s financial burden and increase income of farmers.  

To establish a system bridging prices between neighboring grain producing provinces to promote an orderly distribution of grain.