The per capita income of people in China's rural areas rose 10.3 percent in the first half of this year, the greatest increase for the six-month period for four years, Agriculture Minister Sun Zhengcai said yesterday.

Farmers' average net income for the half year was 2,528 yuan ($370), he said in his report to the Standing Committee of the National People's Congress in Beijing.

Following a 9.5 percent annual increase last year - the largest since 1985 - this year is expected to break all records, thanks to a skyrocketing producer price index, an increasingly wealthy migrant labor class and the growth of subsidies paid to the country's farmers, Sun said.

For the past five years, rural issues have been at the core of China's No 1 central documents - the name given to the first document issued by the Central Committee of the Communist Party of China and the State Council each year.

Increasing farmers' incomes was the keynote of the 2004 No 1 central document, while consolidating the nation's agricultural foundations is the theme of this year's.

Having several overcome socioeconomic barriers and natural adversities, the country's early rice harvest "is here to stay" and autumn crops are "doing well", Sun said.

However, he said the foundations of wage increases are thin, and long-term mechanisms to ensure the sustainable growth of rural incomes are still not fully in place, especially in the face of further uncertainties expected later in the year.

The urban-rural income gap, for example, has risen sharply, he said.

With the urban per capita net income at 13,786 yuan, against 4,140 yuan in the countryside, the ratio was 3.3:1 last year, the highest since China launched its reform and opening-up policies, Sun said.

Also, the rise in the global oil price has resulted in agricultural products becoming more expensive, which in turn has led to reduced profits and increased costs, he said.

Farming costs are now 60 yuan higher per mu (0.06 hectares) than they were last year, he said.

That, coupled with the increasing value of the yuan, has caused a large number of export-oriented labor-intensive companies in China's coastal provinces to either cut production or close, he said.

This in turn has led to massive job losses for migrant workers, he said.

Also, the impact of this year's natural disasters on farmers' incomes "cannot be underestimated", he said.

According to figures from the Ministry of Agriculture, the snowstorms that China hit earlier in the year cost the agriculture industry about 94 billion yuan, while the Sichuan earthquake left a bill of 40 billion yuan in the worst-hit regions alone.

(China Daily August 29, 2008)