UPDATE 1-China to push private funds in farming as more reforms loom

(Updating to add government meeting in paragraphs 10-13)

BEIJING, Dec 19 (Reuters) - China’s government said it will promote public-private partnerships (PPP) in its agricultural industry, the latest step to open up the nation’s vast farming sector as leaders met on Monday to discuss deeper reforms to modernise the market.

Two key government bodies said in a joint statement they would support private capital being injected into areas of the sector such as crop and livestock protection, infrastructure development and improving the quality of farmland.

China has used the PPP financing model to boost other sectors as growth in the world’s second-largest economy slows and the government aims to clamp down on traditional off-balance sheet borrowing methods used by local authorities.

Finding new ways to fund rural economic growth and modernise farming would help develop one of the nation’s largest industries, which has been reliant on government cash until now.

The release from the National Development and Reform Commission (NDRC), China’s top economic and industrial planner, and the Ministry of Agriculture, did not offer many concrete details.

The aim would be to promote supply-side structural reform in agriculture, along with “sustainable and healthy” development of agriculture.

To attract investors, the government will need to provide most of the funding for projects and keep close tabs on their implementation, said Ma Wenfeng, an analyst at the Agricultural Bank of China.

In other PPP, some local governments chasing investment and growth have expanded the scope of projects and dressed up purely commercial projects as public-private partnerships, the government warned last week.

“With the participation of private capital, economic development efficiency will be higher. But still the government needs to pay the larger share in those key areas and also strengthen supervision on the implementation of those projects,” said Ma.

The PPP announcement came as state-run news agency Xinhua reported that Chinese leaders convened a central rural work conference on Monday to review the country’s rural and agricultural progress in 2016 and map out plans for 2017 and beyond.

The annual meeting is expected to focus on supply-side structural reform, considered a way to boost agricultural modernisation and enhance the sector’s competitiveness, it said.

Policymakers proposed structural overhaul at the same meeting a year ago.

After years of bumper harvests, China no longer struggles with food shortages, but in some markets, like soybeans, it still relies on imports.

Domestic farmers cannot compete with cheaper imports and China accounts for most of the world’s demand of the bean used to make oil and animal feed.

Reporting by Hallie Gu and Josephine Mason; Editing by Christian Schmollinger