China's increasing public finances, a result of the country's continuing economic growth, should play a bigger role in agricultural development and improving the welfare of the nation's 750 million farmers.

The country's gross domestic product (GDP) stood at 13 trillion yuan (US$1.6 trillion) last year and fiscal income reached 2.6 trillion yuan (US$300 billion). Only less than 1 per cent of fiscal income comes from taxes on agriculture.

"This shows the country has the ability to use State cash to support agriculture," said Minister of Construction Wang Guangtao.

Wang, with more than 80 officials and experts, was at a forum in Beijing on Saturday to find suitable ways to push urbanization forward and solve problems related to farmers, agriculture and the countryside.

In the last few decades, farmers have made great economic sacrifices to support the country's industrial growth.

Some Chinese experts, such as Han Jun, a researcher with the Development Research Centre of the State Council, estimate that Chinese farmers have given at least 450 billion yuan (US$54.6 billion) towards industrial development between 1949 and 1979.

This capital mainly came from price differences between industrial products and agricultural products.

Under a monopolized procurement system, the government required farmers to sell agricultural produce at a very low price to ensure the supply of grain and raw materials for industry.

Many officials and experts agree it is the right time for China to give more support to agriculture in order to narrow the income gap between urban and rural dwellers.

The gap has been widening in recent years. Official statistics shows the average income of urban residents was 2.54 times that of farmers in 1993, but 3.3 times as much last year.

President Hu Jintao told a high-level Party meeting last September that when the country's industrial development reaches a relatively high level, agriculture and the countryside should get more support.

The State Council has announced that all agricultural taxes across the country will be scrapped next year; it is estimated that farmers will save more than 80 billion yuan (US$9.7 billion).

This measure is seen as crucial to "build a society of harmony," according to Sun Wuxue, president of the Northwest Sci-tech University of Agriculture and Forestry.

Rural areas are less developed in almost every aspect compared with cities, said Sun, citing education, public health and culture as examples.

For example, farmers have very limited access to medical services; there is only one hospital bed per 1,000 farmers.

Children in rural areas spend, on average, 6.8 years being educated, three years less than their urban counterparts, according to statistics from the Ministry of Education.

"In terms of China's economic development level as well as the country's overall financial ability, the government should be able to provide free compulsory education to rural children," said Han.

If farmers do not benefit from China's rapid economic growth and their living conditions deteriorate, there is a risk of social unrest, said Chen Zongxing, deputy secretary general of the National Commitee of the Chinese People's Political Consultative Conference.

Chen, who is also an agriculture expert, said urbanization is a key way China can solve problems related to farmers and agriculture.

More small cities and towns should be developed. This would attract surplus rural labourers and improve production and living conditions of residents, most of who come from rural areas, said Chen.

He called for the establishment of a special association to research this field and speed up the construction of towns.

Minister Wang said 118 million farmers, or a quarter of the country's total rural workers, migrated to cities to find jobs last year.

Chen said that if these people all move to large cities, insufficient infrastructure and serious environmental problems will put a lot of pressure on those cities.

Between 1978 and 2003, China's urbanization rate increased from less than 18 per cent to more than 40 per cent.

International experience shows that when the urbanization rate is between 30 and 70 per cent, the urbanization process gets even faster, according to Chen.

The construction of small towns and cities will change the living conditions of these migrants.

Service industries in new cities and towns will create more job opportunities for farmers-turned-residents and increase incomes, said Chen.

(China Daily June 13, 2005)