Urban-rural income gap predicted to get wider
The urban-rural income gap will continue to worsen this year despite farmers' incomes reaching a 10-year record high in the first quarter, analysts and officials warned yesterday.
Speaking at a forum to mark the launch of the Green Book of China's Rural Economy, an annual report co-authored by the Chinese Academy of Social Sciences and the National Bureau of Statistics, Li Zhou, a rural development expert at the science academy, said the urban-rural gap was expected to expand to 3.3:1 from last year's ratio of 3.28:1 and 3.22:1 in 2005.
This was despite a leap in farmer's annual net income of 7.4 per cent in real terms to 3,587 yuan last year, and a remarkable rise in farmers' cash income - income before deducting the cost of production - of 12.1 per cent in the first quarter this year. Nevertheless, there was little room for optimism for sustainable growth in farmers' income, which the Green Book estimates will increase by 6 per cent if things go well this year.
Sheng Laiyun , a director of the rural survey department at the statistics bureau, said farmers' net income in the period may be significantly lower as the costs for fertiliser and other means of production had doubled in the first quarter from a year ago.
Analysts also cautioned that a robust growth in farmers' income was not sustainable as it was unlikely that the rise in grain prices late last year would be repeated this year.
Last year's increase was a result of market speculation after the government announced a grain protective procurement price, according to Fang Yan , a deputy director at the department of rural economy of the National Development and Reform Commission.
Li Bingkun , a vice-director of the research office of the State Council, said the government had not decided this year's procurement price yet but it would not be lower than last year.
Mr Sheng said: 'From this year's situation, it is impossible for grain price to increase like last year.'
He added that achieving a significant leap in the grain harvest this year would also be difficult because last year's harvest was blessed by extraordinary good weather.
The government will continue to increase subsidies to farmers and is considering merging several types of subsidies into one general category, according to Su Ming , vice-director of the Ministry of Finance's research institute for fiscal science.
Much of the income growth last year was fuelled by the wages of rural migrants working in cities, but a significant rise in the number of migrant workers was unlikely, according to analysts.
'Basically those who can move to the cities have already gone,' Mr Su said.
The number of rural migrants working in cities rose by 5.3 million, or 5.3 per cent, and their monthly wages rose by 9.9 per cent last year.
