A file photo showing farmers harvesting corns. [Photo: Chinanews.com]

China is to implement new pricing and subsidy schemes for corn planting in the country's northeastern provinces and Inner Mongolia Autonomous Region this year.

Liu Xiaonan, vice head of the Economics and Trade Department of the National Development and Reform Commission, gave further details.

"On one hand, corn prices will be entirely determined by the markets, so as to reflect supply and demand. Producers can sell the corn at market prices, while market entities can purchase the products on their own. On the other hand, farmers will still be able to get subsidies, but the local government will directly provide subsidies to planters in the major corn-producing regions, to maintain stability on the profits brought by planting."

China's total corn output was around 224 billion kilograms last year, nearly 50 billion kilograms more than the amount consumed, due to sluggish market demand.

Luo Shouquan from China's State Administration of Grain said the supply of corn in China has been much higher than demand, which required an effective solution.

"The purchasing prices of the main agricultural products have been higher than selling prices, with the difference at a level of several hundred yuan per ton. Although corn's market price decreased last year, the price difference is still over 600 yuan, or 90 U.S. dollars per ton. Corn substitutes such as barley, sorghum, cassava or DDGS (Distillers Dried Grains with Solubles) have also been imported to China in huge amounts, dealing a blow to the domestic corn market."

Earlier this month, Chinese Premier Li Keqiang stressed the importance of improving the price-setting mechanism for both grain and other agricultural products while delivering the Government Work Report during the annual two sessions.