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A drop in the price of urea, an essential fertilizer, has helped to reduce the input costs of China's farmers, sources with the National Development and Reform Commission (NDRC) said Wednesday.

NDRC figures show that the wholesale price of urea averaged 1,670 yuan (US$209) per ton across the country in the first half of the year, 55 yuan lower than the maximum price allowed by the government.

Meanwhile, the retail price of urea averaged 1,852 yuan per ton, down 1.1 percent from the same period last year, the NDRC said.

Despite a series of measures taken by the government to increase rural people's income, the price of fertilizer shot up over the past two years restricting farm revenues.

The retail price of urea jumped 31 percent from the end of 2003 to 2005.

This year the government gave subsidies to fertilizer producers and dealers, set a maximum wholesale price, restricted the profit margins of fertilizer dealers, limited fertilizer exports and enhanced price controls.

NDRC figures show that in the first half of the year, relevant government departments inspected some 30,000 fertilizer producers and dealers, imposing fines of 9.9 million yuan, 6.5 million of which were returned to farmers.

The NDRC will continue to improve the fertilizer stockpiling system, and crack down on any irregularities relating to fertilizer prices, it said.

In the first half of the year, China's urea production soared 11.8 percent year on year. By the end of June, the urea stockpile increased 24.8 percent.

(Xinhua News Agency September 7, 2006)