These measures were studies and passed at Wednesday's executive meeting of the State Council chaired by Premier Wen Jiabao.

The study said China's fertilizer supply could meet demand but the industry still faced problems such as improper structure, unreasonable pricing mechanisms and flawed operating systems.

Comprehensive measures should be taken to deepen reform, improve control systems and ensure the healthy development of the fertilizer industry. This would promote agricultural development and increased income for farmers, the study said.

The meeting decided to take the following six measures:

-- Adjusting structure of the fertilizer industry: exerting proper control on the production capacity of phosphate and nitrogen fertilizers while increasing output of potassium fertilizer.

-- Fertilizer pricing mechanism: stepping up efforts to establish a market-oriented price-setting mechanism and annulling government's temporary measures on price control.

-- Improving the subsidy system on agricultural-use material to prevent falling farmers' income due to price increase of agricultural-use material.

-- Reforming the circulation network of the fertilizers by allowing more investors to enter the circulation sector and encouraging the establishment of larger fertilizer circulation firms.

-- Strengthening management on import and export of fertilizers and setting up fertilizer reserve.

-- Helping farmers to fertilize in a scientific manner, increasing subsidies, cutting cost for farmers and reducing environmental pollution.

The cabinet meeting also studied and passed an executive scheme for the research and development of advanced numerical control machine tools and key manufacturing equipment.

It also studied and passed a Law on National Defense Mobilization and Regulation on Management of Service Uniform.