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China to Offer New Farm Deal

The Central Government Monday unveiled major plans to halt the decline in grain production and fight rural poverty.

Rural spending will rise this year by 30 billion yuan (US$3.61 billion) over last year, the government announced Monday.

Chen Xiwen, deputy director of the Office of Central Financial Work Leading Group, outlined the plan at a press conference in Beijing.

He said the money will be used mainly to support rural tax reforms, upgrade environmental conditions, develop education, health care and training for young farmers, build more roads and other facilities and reduce poverty in rural areas.

The total cost of the program is expected to be 150 billion yuan (US$18.05 billion).

Last year marked the fifth consecutive year of declining grain production in China, Chen announced.

Farmers around the country harvested 430.7 billion kilograms of grain last year, down 5 percent from 2002, Chen said.

The decline was due in part to Chinese farmers switching to more profitable crops, he said.

China's countryside - home to some 800 million people - has largely been left behind by the country's two-decade-old economic boom.

China has long regarded self-sufficiency in grain production as a national
security issue, limiting imports to 5 percent of consumption.

But agriculture officials say steadily shrinking government stockpiles could be
depleted within two years, making increased imports appear inevitable.

Per capita income in the countryside hit 2,622 yuan (US$320) last year, compared with urban per capita net income of close to 8,000 yuan (US$970), according to the government.

While China's economy grew by 9.1 percent last year, the government says the value of its agricultural output grew by just 2.5 percent.

Chen described the slow growth of farmers' incomes in recent years as "fairly grim."

A government policy issued on Sunday outlined plans to raise farm incomes through price supports for agricultural products and easing residency rules to let rural laborers look for work in cities.

"As farmers occupy such a big proportion of China's population, it is very important to increase their income at a faster pace," Chen said.

Though 2003 saw a large gap between grain demand and production, China's grain stocks were still at historically high levels, Chen said. He did not give exact figures.

He predicted that the gap between demand and production would narrow if grain output in 2004 met the central government's expectation of 455 billion kilograms.

According to Chen's estimation, China's actual demand for grains totaled 485 billion kilograms last year.

China's grain output has been declining since 1999, due to reduced planting areas and natural disasters, said Chen, adding that low efficiency of planting methods and farmers lack of enthusiasm also contributed to the decrease.

The government policy statement said that resources will be concentrated on the construction of a number of high-quality special grain production bases beginning this year.

The Chinese government will exercise the utmost efforts to protect its precious farmland for the benefits of farmers, Chen said.

Chen said China would strictly control the acquisitions of farmland and protect the interests of farmers.

To fulfill those two major objectives, China has to implement stringent rules and regulations on the acquisition and use of farmland, especially on land used for profit-making purposes, Chen added.

Developers who take over farmland will be responsible for the employment and social welfare of the farmers they displace, Chen said.

(Xinhua News Agency February 10, 2003)

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