Luxury cars are now common on the dirt roads of Hongxing village, Heilongjiang province, where farmers have been compensated handsomely for their land. [China Daily]

When Liu Jinshan signed on the dotted line to hand over his home and land to the government last July, the compensation deal made him a multi-millionaire overnight.

With 2.4 million yuan ($350,000) in the bank, the 67-year-old farmer immediately splashed out on a car, two apartments and a shop in a new residential area in his native Harbin, capital of Heilongjiang province.

"The apartments are for my son and one of my three daughters, and have already cost me about 1 million yuan," said Liu, whose windfall was eyed enviously by his neighbors in Hongxing village. "I still have another two daughters to look after and I have to be fair to them."

Liu is among an emerging group in China: Nouveau riche farmers, who become wealthy after receiving large sums of cash from either governments or property developers as a result of the country's rapid urbanization.

But quick fortunes can also bring a heavy burden: What to do with the money?

The Harbin media reported that some people in Hongxing indulged in spending sprees for cars, luxury clothes and jewelry after receiving their compensation.

Some even went broke after losing most of their cash gambling.

Although villagers say these were rare and extreme cases, they admitted the considerable compensation has dramatically boosted consumption.

Many have already purchased cars - usually moderate family cars but some gas-guzzling sports utility vehicles can also be spotted in this shabby and dusty village.

Residents of Hongxing began greenhouse vegetable planting in 1996. Thanks to the short distance to the urban area, as well as a growing demand for fresh vegetables, the village became an important production base for Harbin, according to Liu Shilin, the village's Party secretary.

"The business has been profitable in the recent years, therefore our villagers are much better off than average farmers in Harbin," he said.

The annual per capita income of Hongxing is 8,000 yuan, according to one local newspaper report. The national average in 2009 was about 5,000 yuan.

According to Harbin's urban expansion plan, the government will requisition all 3,600 mu (240 hectares) of farmland in Hongxing to build a new railway station. One-third of the village has already been acquired, with the rest to follow over the next two years.

Compensation differs and depends on the types of vegetable a farmer grows, their planting methods and revenues. However, on average, each mu of farmland is expected to fetch 300,000 yuan, villagers told China Daily.

The government will also reimburse residents for their houses, which will also be demolished.

Some said they believe the compensation plan is generous, like Yang Feng, who is expecting his family's 5 mu of land to be requisitioned.

"The government has already measured my house, which is around 200 square meters, and we're expected to move into an apartment building that is planned to be built not far from here," said the 70-year-old.

"The government's policies have become more favorable to farmers in recent years and we're living a better life now," said Yang, the former village head.

Yang, who lives with his son, daughter-in-law, and 18-year-old grandson, makes a comfortable living from his family-run supermarket and a small fertilizer plant. They rent out their land to others.