The government said Friday it will continue to subsidize farmers machinery purchases this year to free up more rural labor and boost grain production nationwide.

According to a joint statement by the Ministry of Agriculture (MOA) and the Ministry of Finance (MOF), the government has slated at least 13 billion yuan (2.1 billion U.S. dollars) in subsidies for agricultural machinery purchases this year.

The new funding for 2012 came after the government allocated 52.97 billion yuan to subsidize about 14.89 million rural households to purchase 16.72 million machinery units over the past eight years.

In 2004, the government launched the agricultural machinery purchase subsidy program to help farmers and boost the country's grain output. The program has been a success, contributing to eight consecutive years of growth in grain output, which hit a record high of 571.21 million tonnes in 2011.

Over the years, subsidy program has boosted domestic demand and driven the agriculture machinery industry with an average annual growth of more than 20 percent, according to the statement.

Agricultural machines are now used in 54.5 percent of Chinese farming, or 2.2 percentage points higher than that of 2010, according to the statement.