An executive meeting held Wednesday by the State Council, China's cabinet, agreed to fully liberalize the grain purchasing market in 2004 and passed a draft regulation on grain circulation management.

The meeting, chaired by Premier Wen Jiabao, held that conditions for further reform on grain circulation systems are mature with the deepening marketization of national economy.

The liberalization of the grain purchasing market should be carried out stably and actively, and a unified, open, competitive and orderly grain market system should be established, according to the meeting.

The meeting called for direct subsidies to farmers so as to protect the interests of those growing grains, as well as further reform on state-owned grain enterprises, which used to maintain a monopoly over grain markets.

The Chinese government has announced this year that licensed grain trading companies may purchase grain at market-driven prices after new grain comes into market, but minimum purchasing prices of some varieties of rice are set for protecting the interests of rice growers and spurring rice production.

The meeting also underscored the importance of canceling agricultural taxes in five years to alleviate burdens on farmers, and passed draft regulations on license management for dangerous solid waste use.