China to invest in agriculture innovation to boost food security

BEIJING (Reuters) - China said on Wednesday it would boost agriculture innovation in an effort to increase food output, signaling that the world's most populous country is trying to tackle outdated farm and food infrastructure to feed its people.

China accounts for a fifth of the world's population with less than 9 percent of its arable land, and the cabinet suggested in a document that China's leaders were aiming to get serious about technology to ensure long-term food supplies.

The State Council, or cabinet, said in the first policy document of the year it would increase investment and subsidies for the agricultural technology sector this year to stabilize grain production, state media reported.

Technological innovation in the sector would "improve land yield, resource efficiency and labor productivity," the official Xinhua news agency said.

The No. 1 Document, as it is called, has for the past nine years focused on rural issues, including agriculture, water conservation, farmers' income, and land transfer issues.

The State Council said in this year's paper the government would encourage research focusing on areas including bio-technology, seed production and effective use of farmland, Xinhua reported.

It also said the government would seek to push banks to increase lending to rural areas and keep prices of agricultural commodities at "a reasonable level."

China has been battling persistent consumer inflation, which was largely driven by food prices, and hit a peak in July of 6.5 percent.

Agriculture experts had expected the State Council to set guidelines on seed cultivation and on implementing a program of promoting the application of genetically modified technology that was introduced in 2008.

The central government estimates that China's national grain consumption will reach 572.5 million tonnes by 2020. Although China is largely self sufficient in wheat, it is not in soybeans and corn.

In 2010, China returned to importing corn in earnest after years of blocking foreign grain, buying a record 1.57 million tonnes, up 18 times from the previous year because domestic production couldn't keep up with demand.

Some analysts say China's agricultural production growth lags behind the country's overall economic growth.

The country is expected to triple corn purchases this year, and rice imports are also expected to rise.

(Reporting by Michael Martina and Tracy Zheng; Editing by Robert Birsel)