China strives to foster 100 agricultural mega-firms

China will strive to foster 100 agricultural companies with annual sales exceeding 10 billion yuan (1.59 billion U.S. dollars) in the next three to five years, a senior agricultural official said on Tuesday. The country is also aiming to build 500 high-level agricultural demonstration bases and raise the incomes of rural households engaged in industrial agriculture by more than 4,000 yuan annually, Minister of Agriculture Han Changfu said at a meeting. By the end of 2011, China had 111,000 big agricultural enterprises with sales reaching 5.7 trillion yuan. Products made by the enterprises accounted for one third of the country's total supply, Han said. However, he noted that the companies are not strong enough as nearly two-thirds of them reported annual sales of less than 20 million yuan. Acquisitions and mergers will be encouraged in the hope that the resulting agricultural conglomerates can act as a potent force in the country's agricultural modernization, Han said, while calling for more favorable fiscal and tax policies to support the development of big farming firms.