BEIJING will channel more funds to develop agriculture in areas affected by the Three Gorges Dam construction after many displaced residents refused to join state factories for fear of them going bankrupt, Hubei province officials say. They said the province's Governor, Jia Zhijie, had been given absolute power to manage the four billion yuan (HK$3.65 billion) earmarked for the resettlement of more than 120,000 Hubei people whose homes would be flooded in the course of the dam's construction. 'Misuse of resettlement funds earmarked for residents has intensified resentment,' said the vice-director of the People's Resettlement Bureau, Huang Yonggui. The bureau is based at Yichang, where the construction project is underway. A 'certain amount' of money allocated to ailing factories had failed to prevent them going under, Mr Huang said. As an inducement to the counties and districts which had been obliged to take in the evacuees, some of the jobs created by the factories financed by dam compensation had been made available to local residents. 'But many still went bankrupt and hundreds of peasants who wished to switch to non-farming jobs were made redundant,' Mr Huang said. He admitted these problems had seriously damaged peasants' willingness to work for state enterprises. 'Many relocatees are urging the Government to open up more land for cultivation in order to secure them jobs,' he said. In order to reduce residents' discontent, which could disrupt the multi-billion yuan hydroelectric project, the state had promised to pump more funds into the opening up of farmland for the displaced peasants, Mr Huang said. 'The evacuees should not only be given homes but, more importantly, secure jobs,' he said. He said Beijing also had assigned a similar fund management task to the Governor of Sichuan province, Xiao Yang. In Sichuan, more than 950,000 people have to be moved to make way for the massive project. In a ground-breaking ceremony this month, premier Li Peng said the success of the whole project depended on competent resettlement work. China has made a budget of 40 billion yuan, at May 1993 prices, for the resettlement of more than 1.2 million people affected by the construction project. The money is distributed in direct compensation for people, as well as development programme for the resettlement area and retraining for farmers enabling them to work in factories. The money will be given directly to residents as compensation, and ploughed into development programmes and retraining farmers. Compensation for each household ranges from a few thousand to 50,000 yuan, depending on the size and condition of the housing that will be lost. Many resent the 'unequal treatment'. Yichang's Government initially agreed to offer subsidies of between 20,000 and 30,000 yuan a household, leaving some families without enough funds to build new homes. Authorities have also promised to build other facilities, including factories, schools and hospitals. But few are under construction because of a holdup in the supply of state funds. 'Management of funds in some areas in the province was not strict enough,' Mr Huang said. 'This led to funds being misused.' In Yichang, the relocation of some 11,000 people who lived in the construction site area is almost complete. Describing the moving process as 'smooth', a vice-director of the Three Gorges Dam's Working Committee, Xiao Yunze, said: 'The people support the project out of the spirit of understanding and sacrifice.' Despite the outward signs of compliance, there seems little doubt that, if open displays of dissent were allowed, the Chinese Government would face a public outcry from local people. Mr Xiao admitted one resettlement problem had arisen because thousands of rich farmers in the fertile valley had to be moved to poorer and already crowded villages. 'They didn't want to move to poorer places because they want to keep up their living standards, which are much better than many peasants,' he said. In Yichang, there are 40,000 relatively well-off peasants who plant oranges along the Yangtze, earning an average of more than 200 yuan a month. To further ease the transition, each peasant will be given as much as 55 yuan a month for three years. 'But this compensation is considered very low by the rich peasants,' said Mr Xiao. He said the Government could not afford to give more. In an effort to minimise disenchantment, the Government has decided to relocate residents to surrounding areas, in many cases higher elevated land a few kilometres away.