China to issue 20b yuan in subsidies to farmers

China will hand over a one-off subsidy of 20 billion yuan ($3.1 billion) from its central finance budget to farmers to cope with rising costs of production materials due to spiking commodity prices in recent months, said a statement on Friday after a State Council executive meeting presided over by Premier Li Keqiang.

Agriculture is of high importance to social stability, the statement said and the subsidy will be issued to farmers in light of the recent spike in prices of production materials such as fertilizer and diesel oil.

The subsidy will be issued at a critical moment in the summer harvest and is aimed at ensuring farmers' willingness to produce grains.

The meeting emphasized that the subsidies will be issued in a timely manner to prevent delays in agriculture.

The meeting also decided to cover grain, wheat and corn with insurance policies in 500 major grain producing counties in 13 grain producing provinces.

The meeting further pointed out that the government's call for financial institutions to sacrifice their earnings has proved to be effective in shoring up the battered economy in the wake of the COVID-19 outbreak.

The initiative is to be continued, with the aim of supporting small- and micro-sized businesses and the self-employed to cushion the impact of rising commodity prices.

Services fees are expected to further drop, including a 10 percent drop in fees charged for internet-based payment. These measures are expected to ease the burden on companies and citizens by 24 billion yuan.