China's direct subsidy to its hundreds of millions of farmers will rise 63 percent from a year earlier to 42.7 billion yuan (US$5.6 billion) this year, the Ministry of Finance announced Monday.

The subsidy includes 15.1 billion yuan earmarked for grain planting and 27.6 billion yuan for farming materials like fertilizers and pesticides.

Zhu Zhigang, deputy finance minister, said the huge increase in direct subsidy to farmers will help raise their incomes and grain output.

Zhu added the money should fall into the pockets of the farmers before the end of June.

Following the cancellation of the 2,000-year-old rural tax system in 2006, China started to offer farmers direct subsidies amid efforts to boost their incomes as the price hikes in fertilizers and other farming materials ate part of their benefits.

(Xinhua News Agency May 22, 2007)