At the launch of their annual rural economy report in Beijing yesterday, a think-tank forecast that grain output would grow this year but that farmers’ income growth would slow due to rising crop prices.

"Slowdown of income growth rate is very likely because there is little room for crop prices, which are already relatively high, to increase further," the researchers concluded in their Green Book of China's Rural Economy, published yesterday.

Because of favorable weather last winter and this spring, farmers are expected a yield of 480 million tons of grain this year, up from 469 million tons in 2004.

Their growth in income, however, could slow to 5 percent from last year's 6.8 percent, which had been the fastest annual increase since 1997.

The team from the Chinese Academy of Social Sciences (CASS) and National Bureau of Statistics (NBS) summarized last year's achievements and problems regarding rural community development and submitted policy suggestions for the coming year.

All the senior experts involved in policy-making expressed concern for farmers' income. They pointed out a steady rise in expenditure on goods such as fertilizer and seeds but a sluggish increase, or even decline, in crop prices.

"Their expenditure is increasing but crop prices are unlikely to go up any further this year," said Ma Xiaohe, president of the Industrial Economy Research Institute of the National Development and Reform Commission.

Ma said this year farmers are likely to see their income gap with city dwellers widen, despite a slight narrowing during 2003-04.

Last year, average farmers' per capita income reached 2,936 yuan (US$354), whilst that of urban residents was 3.21 times more at 9,422 yuan (US$1,135).

The team also attributed the continued increase in harvests to central government's determination to tap productivity in rural regions and the enthusiasm shown by farmers in planting crops.

(China Daily April 14, 2005)