Farmers hit by double whammy
By Fu Jing (China Daily)
Updated: 2005-12-05 05:30

Decreasing grain prices coupled with growing costs of production means Chinese farmers are unlikely to see a significant rise in income next year.

China's economic planning chief Ma Kai expressed the concern as the government embarks on an ambitious programme to improve rural people's lives

Grain prices have been dropping since April; and prices of wheat, corn and rice fell 5 per cent from August to October compared with the same period last year, Ma, minister of the National Development and Reform Commission (NDRC), told an annual meeting on development and reform held over the weekend.

Meanwhile, prices of production materials such as fertilizer and diesel have risen 9.1 per cent year on year during the first 10 months.

The situation makes it difficult to achieve a "new socialist countryside," which was last week highlighted as a new concept and "common action" of the whole Party and nation.

Vice-Minister of Agriculture Yin Chengjie also said large-scale culling of poultry due to the outbreak of bird flu and the impact of China's entry to the World Trade Organization also pose hurdles for income rises for the country's 780 million farmers.

Farmers' income is expected to increase by 5 per cent this year, hitting the target set by the central government at the beginning of this year.

Last year, per capita net income of Chinese farmers reached 2,936 yuan (US$362), up 6.8 per cent year on year, and the highest increase since 1997.

Ma also said China would continue to seek fast, steady economic growth in 2006 but more efforts will be made to address the challenges brought about by overheating in some industrial sectors.

He warned that the oversupply in the steel, coke and auto sectors threatens jobs. "If we don't effectively address the problem immediately, a large number of companies will go bankrupt and many people will lose their jobs," said Ma.

(China Daily 12/05/2005 page2)