Figures from the bureau indicate that farmers' per capita income totalled 682 yuan (US$82.2) for the January-March period, an increase of 46 yuan (US$5.5) from a year ago.

"This represents a year-on-year increase of 7.2 per cent when considering the price factor," said Yang Junxiong, an official with the statistics bureau.

The growth rate was 2.4 percentage points higher than the same period of last year, also higher than the goal of 5 per cent set by the government for the 10th Five-Year Plan (2001-05) period, Yang said.

The higher income growth was mainly because farmers sold more stockpiled farm products during the first quarter of this year, he said.

Less taxes and fees collected by local governments also contributed to the growth in income, he said.

During the first three months the per capita earnings of farmers reached 252 yuan (US$30.4) - an increase of 10 per cent from selling farm products.

Meanwhile, an average 9.6 yuan (US$1.2) in taxes and fees were handed in to local governments, a decline of 11.6 per cent.

"But this does not mean we can be optimistic that farmers' per capita income growth will reach the set target for this year," Yang said. "There are still many uncertain factors such as drought and floods, as well as the slow income growth from non-agriculture sectors."

During the first quarter, farmers' earnings from the non-agriculture sector rose only 8.7 per cent to 376 yuan (US$45.3). The growth rate was 0.8 percentage points lower than the same period of last year.

Xie Yang, a senior researcher with the Development Research Centre under the State Council, said the government has always paid great attention to increasing farmers' income, because it greatly affects the implementation of the demand-stimulating policy.

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

The government should continue to encourage farmers to go out and find work in cities, as farmland in China cannot accommodate so many farmers.

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

Meanwhile, the government should continue to simplify administrative structures in rural areas, he added.

Ni Hongri, another researcher with the centre, said the government also should further spread the "fees-for-tax" reform to reduce the financial burden of farmers.

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

(China Daily April 26, 2002)