Solving problems facing agriculture, rural areas and farmers is a top priority in all government work this year, said Premier Wen Jiabao in his report on government work at the opening of the Second Session of the Tenth National People's Congress Friday.

He called for consolidating and strengthening the position of agriculture as the foundation of the national economy and increasing rural incomes and agricultural production.

"Once again, China's agriculture is in a crucial period of its development," Wen stressed. This year China must take more direct and effective policies and measures to strengthen, support and protect agriculture and increase rural incomes in line with the need to balance urban and rural development.

The premier announced that the government will press ahead with the reform of rural taxes and administrative charges.

All taxes on special agricultural products will be repealed except for tobacco, thus reducing the financial burden on farmers by 4.8 billion yuan (US$579.9 million) annually. Beginning this year, the agricultural tax rate will be reduced by more than one percentage point per year on average, and agricultural taxes will be rescinded in five years. The agricultural tax burden on farmers will be reduced by 7 billion yuan (US$845.7 million) this year.

The central government will appropriate 39.6 billion yuan (US$4.7 billion) this year from its budget for transfer payments to support the reform of rural taxes and administrative charges. We will accelerate reforms of county and township government institutions.

The state will appropriate 10 billion yuan (US$1.2 billion) this year from its grain risk fund to directly subsidize these producers in order to stimulate their enthusiasm for grain production. The prices of the means of agricultural production will be better monitored and controlled to protect farmers' interests.

This year, the central government will appropriate around 30 billion yuan (US$3.6 billion) for this purpose, at least 20 percent more than last year.

(Xinhua News Agency March 5, 2004)