Ren Zhengxiao, head of the Chinese State Administration of Grain, told Xinhua News Agency that nearly 55 million tons of grain are wasted every year due to poor and inadequate storage facilities and during transport.
The report said part of the reason is because farmers don't have proper facilities to hold the grain before it can be moved to market. The grain administration said one-third of China's grain storeage capacity is old and in bad condition.
China's grain output last year was up 3.2 percent year-on-year to a record 650 million tons, the ninth straight year of growth.
Ren said about $32 billion worth of food is thrown away annually in the country.
China Daily reported rapid urbanization has pushed demand for grain, causing imports to rise steadily. Grain imports, including soybeans, totaled more than 70 million tons last year.
Also, more than 260 million farmers have switched to non-agricultural jobs in cities, further affecting output, one official said.
"For China, improving its quality of grain stocks and reducing food wastage are as important as protecting arable land," said Ren.
"The country should accelerate its construction of storehouses in those major grain-producing areas where there is a great shortage in storage capacity, such as in Northeast China," one researcher said.
Earlier, the Chinese Agriculture Ministry announced plans to increase grain output by putting about 277 million acres of additional land into grain cultivation this year. The ministry is encouraging early planting because of concerns about a spring drought.
Raising grain output and increasing farming subsidies are the focus of this year's first official government document under the country's new leaders.