"The Chinese people completely have the capacity to feed themselves," the official Xinhua news agency quoted Wen as saying during an inspection tour in the northern part of the country.

Although China has grain reserves of between 150 million to 200 million tonnes, or twice the world average, Wen said rising global economic uncertainty had made it increasingly difficult to fashion food-related policy.

Wen listed three factors that China had to watch: global financial turmoil caused by the US subprime mortgage crisis, rising international oil prices and grain shortages in many parts of the world.

He noted that stepping up grain production was crucial to ensuring supplies, taming inflation and meeting economic and social development targets this year.

Wen's comments come amid growing concerns over grain reserves and soaring inflation, which has spiked to a 12-year high driven mainly by sharply rising food costs, especially for grain and pork.

High prices, and their potential for social disruption, have emerged as one of the key concerns facing China's ruling Communist Party as it seeks to foster both stability and a long-lasting economic expansion.

Late last year China levied taxes on grain exports in 2008 to help rein in inflation and guarantee stable domestic food supplies.

The Chinese government plans to spend 562.5 billion yuan (80.4 billion dollars) in agriculture this year plus 25.3 billion yuan on subsidies to farmers, the Xinhua report said.

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