Increasing farmers’ income will stimulate economy: scholars

China's agriculture industry and its vast rural population have great potential for economic growth, which could help the country's sluggish economy, analysts said Wednesday, following the release of a key document aimed at modernizing the sector and improving farmers' well-being.

Implementing reforms to modernize the agricultural sector and improving farmers' well-being will be the government's top priority, according to the annual "No.1 document" released Wednesday by the Communist Party of China Central Committee and the State Council, the country's cabinet.

The document, which was published by the Xinhua News Agency, identified key problems the sector is facing, and offered reforms and measures to tackle them.

Quickly providing farmers with higher and more stable income, urgently transforming the traditional agricultural development path to provide an ample supply of agricultural products, and improving the sector's competiveness in the international market have become "historic tasks and realistic challenges" that must be completed and resolved, the document said, according to Xinhua.

The government's efforts to boost the sector through modernization and increase farmers' income could help stimulate China's economy, said Zheng Fengtian, associate dean of the School of Agricultural Economics and Rural Development at the Renmin University of China.

Modernizing the sector could help farmers cut production costs and improve the quality of agricultural products, which could help improve market competitiveness, Zheng told the Global Times on Wednesday.

"We all know there is a vast market for agricultural products in China," said Zheng, adding high production costs and backward capacity in the country's agricultural sector are hurting its competiveness.

Due to the lower price/quality ratio of domestic agricultural products, Chinese consumers are incerasingly turning to imported ones, according to Zheng.

In addition, the vast rural population could be a major consumer market, said Wang Sangui, a professor of the School of Agricultural Economics and Rural Development at Renmin University, who specializes in rural poverty studies.

"If farmers have money to spend, it's not only good for their well-being but for the national economy as well," Wang told the Global times on Wednesday. The economy has been increasingly dependent on consumption as a growth engine, since investment and manufacturing have waned in recent years, he added.

Although the country has seen a huge number of farmers migrating to the cities in the past few decades, the rural population still accounts for 44 percent of the country's 1.37 billion people.

A significant portion of the rural population still lives in poverty, according to Wang. He said comprehensive reforms such as those listed in the policy document published on Wednesday could help "improve conditions" for farmers.

Supply-side reforms

The document stresses supply-side reforms in the agricultural sector, which could help address challenges and push forward the sector's modernization process, and ensure millions of farmers enter a "moderately-prosperous society," Xinhua said, citing Ye Xingqing, an official from the State Council's Development Research Center.

The agricultural sector is also facing a supply glut and a shortage of quality products, Zheng said. He said supply-side reforms could help cut both economic and environmental costs, and improve the quality of agricultural products.

The document also highlighted the shift in focus on further protecting farmers' interests and promoting their well-being, Zheng said.

"Adhering to the farmers' dominant position and improving farmers' well-being" will be the starting point and goal of all work in rural areas, the document pointed out.

Those policies are in line with President Xi Jinping's earlier call to reduce poverty and achieve a "moderately prosperous society" by 2020, Wang said.

China also vowed to increase agricultural investment, create high-quality farmland and support the integration of rural workers in cities, according to the document.