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BEIJING, Dec. 25 -- An annual rural work conference concluded on Friday, agreeing to push forward supply-side reform in agriculture to speed up modernization.

China will ensure abundant and quality farm produce to satisfy market demand, according to the Central Rural Work Conference that mapped out rural work for 2016 and the 13th Five-year Plan period(2016-2020).

Priority should be given to reduction of inventories and production costs and overcoming weaknesses in the sector, according to a statement released after the conference.

China will step up grain processing to cut stock; promote large-scale production, curb overuse of pesticides and fertilizers and introduce social services to slash costs; reinforce rural infrastructure and boost shortly-supplied farm produce to overcome weak links.

"By initiating supply-side reforms, policy makers hit at the crux of modern agricultural development," said Cheng Guoqiang with the Development Research Center of the State Council.

After years of good harvests, China has grown out of a food shortage period, but structural problems remain unsolved, including the contradiction of falling prices and rising costs: some produce is over-supplied and some in extreme shortage.

Total grain output increased 2.4 percent year on year to 621 million tonnes in 2015, the 12th straight year of growth. However, inventories are piling up. It is estimated that China has accumulated billions of tonnes of grain stock. Corn alone has reached 400 million tonnes: a bottleneck and needs reforms on the supply side.

President Xi Jinping said in his instruction that China's agricultural and rural development still faces many challenges, and that greater efforts should be made to support rural development and advance rural reforms.

In a written instruction, Premier Li Keqiang told the conference that to address new problems, China should optimize the agricultural structure and promote large-scale production in multiple forms to improve quality and competitiveness of agriculture.

Li said China should accelerate construction of rural infrastructure, improves facilities and services in villages and urban areas favored by rural migrants, and promote coordinated urban and rural development.

The meeting agreed that China should follow the concept of innovative, coordinated, green, open and shared development in its rural work for the next five years.

FOOD SECURITY STRESSED

China renewed its commitment to safeguard food security in the conference.

"Food security is the bottom line of agricultural structural reform," said the statement, adding that the government will secure the supply of staples, protect farmland and maintain production capacity.

The government will offer preferential policies to large-scale grain farms while making sure that farmers benefit from agricultural development. It will also improve the price formation mechanism and government purchase measures for important farm produces.

PRIORITY FOR FISCAL SUPPORT

China also pledged to make rural areas and agriculture a priority for government fiscal support to develop rural economy and lift the remaining poor out of poverty.

The government will channel more money to rural areas and encourage private investment into rural and agriculture projects, according to the statement.

There have been calls to further tap into the potential in the countryside and promote an integrated development of the agricultural, industrial and service sectors, to increase farmer's incomes, the statement said.

In the statement, the government reiterated its aim of lifting all poor people out of poverty through precise poverty relief measures. Enditem