The investment is part of the ministry's action plan to push forward the nation's arduous agriculture restructuring.

Other ministerial departments, including economic planning, trade and agriculture, are going to join in the plan to strengthen the development of agricultural product processing.

The technology used in processing soybean, corn, rapeseed and apple topped the joint action's development list.

Ministerial officials said the development of agricultural processing is essential for the farmers to fatten their incomes and decrease the impact China's entry into the World Trade Organization (WTO) has made on its agricultural industry.

"China's agricultural situation has changed over the years: We have a full supply of products, but our processing capability lags (other countries)," said Li Xueyong, vice-minister of science and technology, at a working meeting on Tuesday.

In addition to agricultural structural readjustment, accelerating farm-produce processing will contribute more to the added value of the agricultural sector, thus benefiting the wallets of the farmers, said Li.

The ministry aims to create an additional 3 million to 4 million jobs in the sector after new processing technology is adopted. And about 50 billion yuan (US$6 billion) of output value will be achieved by 2005 after the action plan is implemented.

For years, China's agriculture, animal husbandry and farm produce processing industries have been separate in terms of production and management, which has hindered the development of agri-industrialization in a country with the world's largest agricultural sector.

By vigorously expanding farm-produce processing, China is expected to resolve the farmers' difficulty in selling their products, leading to smaller stockpiles, and helping reverse downward price trends in raw agricultural products.

Liu Xingxin, vice-president of the China Association of Grains and Oil, said China's accession to the WTO also demands the country enhance its processing and storage capacity for labour-intensive agricultural products, so as to expand their shares in the global market.

"The Chinese agricultural produce processing industry, an important component of the country's agricultural sector, is striving to co-operate with other countries in terms of capital and technology," Liu said.

For a long time, low quality, shabby packaging and poor hygiene conditions have been a barrier to the export of China's processed agricultural products and have weakened its competitiveness in the domestic market.

"Small-sized production models combined with outdated equipment are what is hindering the development of our agricultural produce processing industry," Liu said.

Upgrading the sector is a crucial step to transform traditional agriculture into industrialized agriculture in China, Liu added.

(China Daily July 3, 2002)