Du told a national meeting in Beijing the WTO accession brings both challenges and opportunities to the agricultural industry. He said it is the right time to accelerate the expansion of the industry.

As part of its commitment to the WTO, China pledged to lower farm produce tariffs drastically and grant bigger quotas for imports of major processed agricultural products such as wheat.

According to the Ministry of Agriculture, the WTO accession has affected the key sectors of China's agricultural industry, including grain, edible oil, animal products, fruit, vegetables, wool and cotton. For example, the relatively low output of quality wheat in China has prompted four local flour processing mills to purchase the grain from abroad. Under the WTO arrangement, China is to expand the import quota for wheat to 9.3 million tons by 2004. By 2010 it is expected to surpass Japan as the largest importer of wheat in the world .

Du noted that over the past few years, the farm produce processing industry has grown at a faster rate than the economy. The industry has expanded at an annual rate of 8.7 percent. Specialised zones for processing specific farm produces have emerged around the country as the industry diversifies its product lines.

However, Du said, the farm produce processing industry is still in its infancy. Official statistics show China now produces the world's largest amounts of grain, oil crops, fruit, beans, meat, eggs and aquatic products. Only 30 percent of the total output was processed before reaching the market, compared with 80 percent in industrialised countries.

Du said the growth of the processing industry will help increase the competitiveness of China's farming sector on the international market. At present, processed farm produce makes up 30.6 percent of the country's total exports.

The Chinese government will step up support for the construction of supply bases, personnel training, research and development and the formulation of quality and safety standards for the farm produce processing industry, Du said.