The double-digit rise in food prices provides strong evidence why China, the world's most populous country, always has to attach great importance to its agricultural sector.
However, the first policy document of the year that the State Council issued on Wednesday goes far beyond merely feeding a population of 1.3 billion.
It is the fifth consecutive time since 2004 that the No 1 government document has been dedicated to rural issues. Such efforts to boost rural development are more than needed because China's social and economic progress hinges more and more on the coordinated development of its urban and rural areas.
A widening urban-rural gap demands urgent and comprehensive fiscal aids to considerably improve rural infrastructure and enable farmers to catch up with their urban cousins in terms of income growth.
A bumper harvest and rising food prices certainly contributed heavily to the 9.5-percent rise of Chinese farmers' per capita net income in real terms last year. Yet, the fastest income growth in a decade is also a result of significantly expanded government investment.
China invested 420 billion yuan ($58 billion) last year in the countryside, representing a record-high increase of 80 billion yuan from 2006.
Such government expenditure not only directly alleviated the financial burden on farmers but also facilitated agricultural production to increase farmers' income.
It is welcome that the new policy document further confirms the Chinese government's commitment to channeling more revenue to the vast countryside.
The central government is likely to raise its 2008 rural budget to about 520 billion yuan, compared with last year's 392 billion yuan.
Besides, the document also requires local governments to ensure that growth in agricultural spending will outpace their revenue growth.
More investment for the construction of infrastructure projects, as well as in agricultural technology, among others, will help the country to secure adequate supply of agricultural produce. This is of immediate importance as the country has made it a top priority to fight food-led inflation this year.
In the long run, such enhanced fiscal stimuli for rural development is crucial to steady progress in rural reform and thus closing the country's urban-rural gap.
(China Daily February 1, 2008)
