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The central government agencies will take strong measures to ensure the adequate distribution and supply of grain. The move is to stabilize market prices which have been rising rapidly recently.

In an emergency circular issued on Wednesday by the State Council, grain storage authorities were asked to respond rationally to the market prices, and to guarantee the timely provision of grains and edible oils.

Inspections and law-enforcement will be strengthened at the main marketplaces to prevent manipulation and speculation in prices, the State Council circular said.

Since the beginning of last month, the central government has released in four batches a total of 3.8 million tons of grain reserves to stabilize market prices.

Sources from the National Grain Administration said an auction of the fifth batch is underway.

In another development, the Ministry of Communications ordered that major highways, railways and ports ensure the quick delivery of grain and related food products across the country.

In an emergency notice, the ministry said all transportation companies should give priority to the distribution of grain, edible oils, and poultry products, and upgrade their work efficiency.

Green passageways should be set up for grain and food transportation. Lengthy inspections and fee charges should be prohibited, it said.

The measures are the latest taken by China to stabilize grain and other food prices.

According to figures released on Tuesday by the People's Bank of China, grains had seen a price rise of 1.6 per cent in November, annualised, edible oil 7.6 per cent, and oil-bearing crops 2 per cent.

The State Council circular also reported that China had three consecutive years of good harvests - 2004, 2005 and this year. The current price rises in grain should generate greater incentives for farmers.

But if prices go up too rapidly, they will affect the livelihood of many low-income people, and social stability, it said.

Generally welcoming the policies listed in the circular, economists and food market specialists called for their effective implementation.

Wang Jinmin, a researcher with the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences, told China Daily that if the authorities can fulfil all the measures, China will be effective in stopping the spiralling grain prices.

"We must make sure that no businesses sacrifice the public interests for their own profits," he said.

According to Wang Huijiong, vice-president of the Academic Committee of Development Research Centre of the State Council, under the market economy, it is tough for the government to balance the benefits of both producers and consumers.

When comparing urban supplies with the interests of "the much bigger rural population," he said, letting the price increase within a reasonable band" can actually help China solve its rural problems.

Both experts said prices had also been rising rapidly for farmers' procurement of raw materials - such as pesticides and fertilizers.

Wang Jinmin noted that although the release of government grain stocks would help ease the situation, it was only a short-term solution.

Future grain prices in China could be influenced by other factors on the international market.

(China Daily 12/15/2006 page2)