The Chinese government has announced a serious of measures, including provisional value-added tax exemption, to facilitate chemical fertilizer production and stabilize the soaring prices.

According to a circular issued earlier this week by the Ministry of Finance in cooperation with the Ministry of Agriculture, the State Development and Reform Commission and the Ministry of Railways, as well as the All-China Federation of Supply and Marketing Cooperatives, local governments are required to help boost the production of chemical fertilizers to meet the market demand and curb the growing prices of chemical fertilizers.

A taskforce headed by provincial governor should be formed across the country to improve market regulations in a bid to ensure market supply and price stability, according to the circular.

A duel-layer chemical fertilizer reserve system should be set up at both provincial and national levels so that the reserve can be used to stabilize the market and control the excessive growth of chemical fertilizer prices.

The value-added tax on urea will be exempted temporarily, according to the circular.

A tax on urea export was imposed at a rate of 30 percent beginning June 1 and will remain until Oct. 31, a period which sees the biggest demand for the chemical fertilizer. The rate of the tax in the rest of the year is only 15 percent.

The circular also urged further improvement in the pricing policies and monitoring mechanism to curb the growth of chemical fertilizer prices.

Source: Xinhua