From AP via International Herald Tribune :
China said Friday that it would pay farmers more for rice and wheat, in a move aimed at raising output and cooling surging inflation that threatens to fuel unrest ahead of the Olympic Games.
Beijing has frozen retail prices of rice, cooking oil and other goods in an effort to curb inflation that saw food prices jump 23.3 percent in February over the same month last year. But analysts warned that holding down the prices paid to farmers would discourage them from raising production and easing shortages that have been blamed for rising food costs.
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. It said minimum grain prices paid to farmers would rise up to 9 percent.
