For the first six months of 2004 the average per capita cash income of Chinese farmers reached a record high of 1,345 yuan (US$162), an increase of 16.1 percent over the same period last year, according to the National Bureau of Statistics.

But more efforts are still needed to maintain the growth momentum in rural areas.

Fatter wallets have long been what Chinese farmers desperately needed to catch up with their urban cousins who have tapped the country's robust economic growth for years.

It is roughly estimated that the income gap between rural and urban residents has expanded to about 1:4 in recent years.

To solve the chronic problem of farmers' slow income growth, the Chinese Government made it a top priority in a high-profile "No 1 document" issued in early February.

As farmers' income growth, the fastest since 1997, markedly outpaced that of urban residents in the first half of the year, it is reasonable to believe the government's effort is paying off even better than policy-makers expected.

The authorities had only projected a minimum 5 percent growth of farmers' income this year compared to 4.3 percent in 2003. But thanks to intensified government support, the rural work takes on a much more encouraging look today.

On the one hand, the government has slashed the tax burden on individual farmers by 27.2 percent over the same period last year. This is the first year the country has cut the agricultural tax, which will be totally eliminated in five years.

On the other hand, a stable rebound in prices has enabled farmers to reap an average income increase of 18.9 percent from sales of agricultural products.

Increased transfer payments, including the government's subsidy for grain production, also significantly contributed to farmers' income growth.

In addition to these recent efforts, some supportive measures the country adopted years ago are also taking effect.

For instance, reconstruction of the rural power grid which started five years ago has substantially lowered the price of electricity in rural areas, saving as much as 40 billion yuan (US$4.83 billion) annually for farmers.

As more and more supportive measures are gradually introduced, China's farmers will naturally show more enthusiasm for profitable agricultural production.

The rapid growth of summer grain output in the first half of this year indicates that the country's grain security problem can be properly addressed as long as there are ample economic incentives for farmers.

However, while cheering their double-digit income growth in the first half-year, it is also necessary to caution against negative factors that may directly or indirectly slow farmer's income growth in the coming months.

Some departments' efforts to tighten regulations on overloaded vehicles on roads have already hiked transportation fees, adding to farmers' cost for selling their agricultural products.

The country's macroeconomic control is expected to hit full force in the second half. When overall economic growth slows, the agricultural sector can hardly escape intact.

Severe natural disasters like floods and drought are also demanding close attention and prompt reaction to minimize possible losses.

Though the growth rate is fairly remarkable, the low level of farmers' income means the growth momentum is still quite fragile.

What has been achieved in the first half-year is a much-needed start to narrow the income gap between rural and urban areas.

To make this year a real defining period that effectively reverses the trend of widening income gap, the government needs to further enhance support for farmers.

(China Daily July 29, 2004)