BEIJING, March 6 (Reuters): China will increase its 2014 budget for farming subsidies by 10 per cent from last year's 1.6 trillion yuan ($261.09 billion), a top government official said on Thursday, even as critics argue that subsidies play a limited role in boosting food production.
Maintaining food security is one of China's top priorities for this year, as rapid urbanisation and pollution threaten to swallow up arable farmland.
Beijing aims to step up its annual grain output by providing subsidies to farmers and investing in rural infrastructure, after more than 200 million migrant workers moved to cities, slashing the rural workforce and boosting food demand.
The government has increased direct subsidies paid to farmers who plant crops from 11.41 yuan ($1.86) per mu in 2004 to more than 90 yuan per mu in 2012.
However, many farmers have switched to more profitable cash crops such as fruit or vegetables, or simply abandoned their land to earn higher incomes in the city.
"It's very hard to check whether a household is planting grain or vegetables, and planting eight or ten mu," Agriculture Minister Han Changfu told reporters at the annual parliament session in Beijing.
"I have also heard talk that after getting the subsidies, farmers don't plant the land and go to work in cities."
The direct subsidies, typically paid out to villages before being directly transferred to farmers' bank accounts, also do little to boost yields, added experts.
"The way they pay out the subsidies is really not tied to production," said Kevin Chen, China programme leader at the International Food Policy Research Institute.
"Money spent on subsidies is less effective than that spent on research and development," he added.
But Han indicated that China could continue to substantially increase its farming subsidies, which currently make up about 3 per cent of farmers' income compared with around 40 per cent in Western economies.
"We have limited agricultural resources and our farmers' incomes are low ... whether we are looking at our farmers' conditions or WTO requirements, we still have room for more subsidies," he said.
