The government should encourage private companies to participate in the development of agriculture and marketing to help farmers earn higher incomes.

"Farmers cannot only rely on the domestic market now that China has become a member of the World Trade Organization," said Zhang Yanhua, an official with the National Bureau of Statistics.

A latest survey by Zhang's bureau of 77,000 households in 835 counties suggests farmers are still blindly adjusting their agriculture structure this year.

Specialized private companies can help farmers produce and sell what the market needs, Zhang said.

In western countries, mutual-aid organizations have usually been established to help farmers, he said.

Xie Yang, a senior researcher with the Development Research Centre under the State Council, said the government has always paid attention to potential ways of increasing farmers' income.

"The slow growth of farmers' incomes has long been a headache for the central government, because it has greatly affected the implementation of the demand-stimulating policy.

"If consumption in rural areas cannot be stimulated, then the full expansion of domestic demand, a strong engine for economic growth, will not be realized," Xie said.

Slow income growth will hinder overall economic development and even undermine social stability, he said.

Agriculture Minister Du Qinglin said over the weekend that the government will encourage farmers to seek alternative employment, as the farmland in the country cannot accommodate so many farmers.

More farmers should turn to non-farm work to seek their fortune, Du said.

China will prioritize the development of township businesses and the expansion of small towns, create more job opportunities for farmers and accelerate the resettlement of redundant rural labourers, he said.

Xie said the government should continue to simplify the rural administrative structure.

"Institutional reform is the key to increasing farmers' incomes and reducing their financial burdens," he said, adding the reform should include the removal of township governments and giving farmers a bigger say in managing village affairs.

This will invigorate county economies and cut the size of government institutions in rural areas by a large margin.

Ni Hongri, another senior researcher with the Development Research Centre, said the government should widen the "tax-for-fees" reform to reduce farmers' financial burdens.

The reform, which is now carried out in more than 10 provinces, municipalities and autonomous regions, is aimed at lightening farmers' tax burdens by abolishing assorted fees and charges, thus increasing these people's income.

According to the National Bureau of Statistics, the per capita income of Chinese farmers rose a year-on-year 4.2 per cent to 2,366.4 yuan (US$285.1) in 2001.

(China Daily March 26, 2002)