Chinese farmers' per capita net income reached 2,476 yuan (US$298.30) last year, an increase of 109 yuan (US$13.10) or 4.8 percent compared with a year ago, the National Bureau of Statistics said Wednesday.

Income rose mostly because more farmers began to work in non-farming sectors in cities and towns, rather than just on the farm, the bureau said.

Last year, the average farmer earned 438.2 yuan (US$52.80) from working in cities and towns in addition to his or her income from working on the farm, an increase of 45.6 yuan (US$5.50) on the previous year.

"This accounted for 41.8 percent of the growth in farmers' income," the bureau said.

The government's efforts to reduce the burden of taxes and fees on farmers also contributed to the income growth, it said.

Per capita taxes and fees paid by farmers stood at 78.7 yuan (US$9.50) last year, a drop of 12.5 yuan (US$1.50) from a year ago.

The bureau said that earnings from agricultural products such as grain and pigs were stable, in spite of price drops.

Xie Yang, a senior researcher with the Development Research Center under the State Council, said the government paid great attention to increasing farmers' income.

"The slow growth of farmers' income has long been a headache for the central government, because it greatly affects the implementation of policies to stimulate demand," he said.

"If consumption in rural areas cannot be stimulated, the full potential of domestic demand - a strong engine for economic growth - will not be realized," Xie said.

Slow income growth hinders overall economic development and even undermines social stability, he said.

Finance Minister Xiang Huaicheng said late last year the government would focus on the development of agriculture and rural areas when spending the revenue earned from long-term treasury bonds this year.

"Agriculture is the base of China's economic development," Xiang said.

The government will also expand "tax-for-fees" reforms in rural areas to increase people's income, working and living conditions, he said.

In a government work report presented at the opening of the First Session of the 10th National People's Congress yesterday, Premier Zhu Rongji said: "We should continue to take developing agriculture and the rural economy and increasing farmers' income as the top priority of our economic work."

(China Daily March 6, 2003)