China's grain output will grow continuously this year but income growth for farmers will slow due to a disproportionately small rise in crop prices, a think-tank research team forecasted yesterday in Beijing.

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

The growth of farmers' income, however, will slow to 5 per cent this year from last year's 6.8 per cent - the fastest annual pick-up since 1997.

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

In the annually published research-based book, the team from the Chinese Academy of Social Sciences and National Bureau of Statistics 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 their concerns for farmers' income growth at yesterday's publishing ceremony. They pointed out a steady jump in expenditure on goods such as fertilizer and seeds but a sluggish increase, or even a decline, in crop prices.

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

Ma forecasted that this year Chinese farmers are likely to see the income gap between themselves and urbanities widen, despite a slight narrowing during 2003-04.

Average farmers' per capita income reached 2,936 yuan (US$353.7) in 2004, whilst that of urban residents was 3.21 times more at 9,422 yuan (US$1,135) a slight decrease from 3.23 times more in 2003.

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

China's total grain output last year was the highest since 1997.

Source: China Daily