China's economic planning agency set the minimum purchase price for short grain rice at 105 yuan (about 15 dollars) for every 50 kilograms, a 10.5 percent rise over last year, the People's Daily said.

The lowest price to be paid by state granaries for long grain rice was increased by 5.4 percent, the paper said, citing the National Development and Reform Agency.

China's rice farmers are required to sell a certain proportion of their harvest to state granaries at set prices, while the rest is sold on open markets where prices for the main staple tend to be higher.

"The price adjustments are aimed at prompting farmers to plant more rice and to increase grain production," the paper said, adding that the price rises would also raise rural incomes.

China's consumer price index, the main gauge of inflation, rose 1.5 percent in January compared with the same month a year earlier, driven mainly by food prices which were 3.7 percent higher.

In January 2009, China's planning agency raised the purchase price for rice by between 15 and 17 percent as the government sought to increase grain production and raise rural incomes.

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