Experts warned on Friday that China may fail to meet this year's goal to increase farmers' income by 5 per cent due to the SARS outbreak.

Xie Yang, a senior researcher with the Development Research Centre under the State Council, said that, fearing they may be infected by the virus, large numbers of farmers who work in cities have returned to rural areas since April.

This group of farmers, most of whom work in cities in North and South China, where the outbreak was at its most serious, accounted for about 20 per cent of the country's 40 million migrant rural workers, he said.

They will not return to cities until the end of August, when harvesting and planting is finished, he said.

During the past years, income earned by farmers from working in cities accounted for about 70 per cent of the total annual increase in income, he said.

SARS has also had some impact on farmers' sales of farm products, he said.

Farmers found they were unable to sell their products abroad, because foreign countries set up technical barriers for China-produced farm products, he said.

"Farmers' income growth is likely to slow down by 1 to 1.5 percentage points this year,'' Xie said.

Zhang Xueying, a senior economist with the State Information Centre, said the slow growth of farmers' income has long been a headache for the central government, because it greatly affected the implementation of the demand-stimulating policy.

"If consumption in rural areas cannot be stimulated, the full expansion of domestic demands, a strong engine for economic growth, will not be realized,'' he said.

Presently, Chinese farmers, which account for more than two thirds of the country's total population, contribute to only one third of the total consumption.

"The slow income growth will hinder the overall economic development and even undermines social stability,'' he said.

During the first quarter of this year, per capita cash income by farmers rose a year-on-year 7.5 per cent to 737 yuan (US$88.8).

However, the income growth was still lower than that by urban residents. The income gap between farmers and urban residents was also large.

Per capita income by urban residents rose a year-on-year 8.4 per cent to 2,355 yuan (US$284) during the same period.

The government should continue to encourage farmers to go out following the decline of SARS, Xie said.

The government should also strictly carry out the previously designed measures to increase farmers' income, he said.

These measures include increased investment in agriculture and rural areas, according to Yao Jingyuan, chief economist with the National Bureau of Statistics.

The government will give emphasis on the development of agriculture and rural areas when using the fund from issuing the long-term treasury bonds this year.

The government will also conduct supply and marketing system reform, financial system reform, medical reform and "fees-for-tax'' reform in the rural areas, Yao said.

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