Pigs are under quarantine in Southwest China's Chongqing before transported to the slaughter house. (Photo: IC）

China's top economic planner the National Development and Reform Commission (NDRC) and the Ministry of Agriculture and Rural Affairs (MARA) are handing out one-off subsidies of no more than 5 million yuan ($701,000) to newly constructed pig farms, expansion projects, and farms above the designated size to stabilize hog production.

A Chinese expert said on Monday that the move by the central government is expected to shore up hog production at a time when African Swine Fever (ASF) has seriously cut the production of the staple food and pork prices have kept rising.

Pork accounts for more than 60 percent of China's meat consumption, and prices of the meat rose more than 25 percent in August from July, according to media reports last week.

The circulars issued by the NDRC and MARA stipulated that large-scale pig farms that are set up before 2020, farm expansion projects, and relocation projects from environmentally protected areas are entitled to central budget subsidies, which are aimed at boosting the development of large-scale pig farming. 

The sum of the subsidies ranges from 500,000 yuan to 5 million yuan and the funds will mainly be used to support animal quarantine, the treatment of animal waste, improvement of the environment in pig farms and automation. 

Li Guoxiang, a research fellow at the Rural Development Institute of the Chinese Academy of Social Sciences, told the Global Times on Monday that the government policy is aimed at encouraging pig farmers to raise hogs at a time when their confidence is low and the fear of the impact of ASF is high.

The main purpose of the financial incentives is to entice farmers and investors to invest in pig farming, so that with increased supply the runaway pork prices could be subdued in the coming months.

"Although the periodical issue of overcapacity can still cut pork prices even under the current circumstances, daring pig farmers could actually make a return by tapping government subsidies and benefiting from the current high pork prices," Li said.

The circular by the two ministries also announced subsidies of no more than 30 million yuan for 100 large pig farms with capacity of at least 100,000 hogs across the country. 

China, the biggest pork consumer in the world, has culled 1.16 million hogs since ASF was first reported in August 2018. China had recorded 143 outbreaks of ASF, which is fatal for pigs but harmless for humans, as of July 3 this year, MARA said in July.