Chinese grain farmers' income grew a record amount in the first half of this year, thanks largely to government's incentives.

In the January-June period this year, Chinese grain farmers income was 1,371 yuan (US$165.2), a year-on-year increase of 13 percent, the highest rate since 1997, Zheng Xinli, deputy director of the Central Policy Research Institute, said at a conference.

Allowing for price fluctuations, the income growth rate was 2.1percent higher than that of all farmers. It was 4.3 percent higher than of the urban population's disposable income, according to Zheng.

Zheng said government polices to encourage grain production were directly responsible for the income rise. Policies included a stricter protection of arable land, direct subsidies for grain growers, tax cuts and exemptions and reform of the grain distribution system.

The Central Government alone earmarked 20.5 billion yuan (US$2.47 billion) to support the taxation system in rural areas. It allotted more than 10 billion yuan (US$1.2 billion) for direct subsidies to farmers.

Last year China produced 431 million tons of grain, a decrease of 5.8 percent from the 2002. The amount of grain produced has been declining for four consecutive years.

But this year, China's summer grain and early rice harvests have reached 101.05 billion kilograms and 33.5 billion kilograms this year, up by 4.8 percent and 14 percent from last year respectively.

Zheng predicted that if no severe natural disaster occurs this fall, China will be able to reach its goal of 455 billion kilograms.

Farmers' income and grain security is on of the top concerns of the Chinese Government.
 
(Xinhua News Agency September 18, 2004)