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UPDATED: 19:36, December 09, 2004
Experts laud Chinese government support for farmers
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Chinese and international experts praised China's decisions on further supporting farmers at the just-concluded central economic conference Thursday, while encouraging the government to do more.

The three-day annual conference, held in Beijing from Dec. 3 to 5 by the Communist Party of China Central Committee and the State Council, put rural issues on top of the Party's agenda.

Chen Dongqi, a senior researcher with the State Development and Reform Commission, applauded this decision. "China has made remarkable achievements in boosting its rural economy, and the income of farmers has increased this year. The decision will contribute to the sound development of the whole country," he said.

Tang Min, chief economist with Resident Mission of the Asian Development Bank (ADB) in China, said it is encouraging for China to stress the development of rural issues in the work plan.

The task of increasing agricultural production and improving farmers' incomes still remains arduous, said Tang. There is still much for the government to do in lightening farmer's burden, he said.

"If the government continues to do like before, just giving more money to build irrigation works or give subsidies for farmers to buy farm chemicals or seeds, the outcome can not be necessarily good and it might be money-wasting," he said.

Thanks to the increase of grain price and decrease of tax and fees, farmers' income has been improved, Tang said. But the situation can not be changed soon since the agricultural tax will be canceled in the coming two years and grain prices cannot be increased greatly with the reference to the international grain price, he said.

He suggested cutting down farmers' expenses, especially educational and medical payout. The central government should invest more in rural compulsory education and medical system.

Bert Hofman, lead economist and chief of the Economics Unit of the World Bank's Beijing Office, agreed with him, saying individuals pay too much for education and many poor families cannot afford to.

Tang said reducing educational expenses would change the life of rural people, which account for 60 percent of Chinese population.

Governments should also invest more in rural medical sector, Tang said, adding that many farmers cannot afford the expensive medicine and medical care. "Illness sometimes can make a family become poor or even bankrupt."

Rural financial system also needs to reform, since most of the farmers' savings have gone to the urban economy. "At least 200 billion yuan has flown to urban areas through the current financial system, but the farmers have received no more than 50 billion from cutting down grain tax," he said.

Hofman said China's revenue has increased greatly this year and so it can invest more in education and medical care. On the one hand, social fairness can be improved and on the other hand the government does not need to worry about the economy becoming overheated because of investment.

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