The 38-year-old plans to convert his 2,000-square-metre paddy field into orchards. By doing that, he may help solve China's longstanding conundrum - how to raise farmers' incomes. Grain, long a staple of the agricultural sector and inextricably linked to national stability, is increasingly being replaced by more lucrative crops.

The few thousand yuan that grain farmers earn annually is no longer enough, Zhang said.

That's why the government is now encouraging coastal areas to sow lucrative crops, pushing inland provinces to plant superior strains of grain and directing western regions to grow more specialty produce like tobacco and medicinal herbs.

Farmers like Zhang are only too happy to oblige.

"The rice is only enough to feed the four mouths in my family, but it doesn't bring in any money because grain is so cheap nowadays," said Zhang.

At Zhang's house on Chongming - an island of calm about an hour's ferry ride from the bustling commercial hub of Shanghai - dirty sacks of wheat are piled up in a corner of a sitting room sprinkled with empty grain husks from the last winter harvest.

"The wheat quality isn't good. Nobody wants it," said Zhang.

Centuries-old threat

Zhang hopes to sell his future fruit harvest in the city, where a kilogramme of rice sells for around 2.50 yuan (US$0.30). A similar load of peaches or lychees could fetch double that.

He knows the risks - they don't keep too long and trees take years to bear fruit - but he is willing to take a shot.

Leaders are aware of the dangers of instability with the widening wealth gap -rural income grew only 4 per cent to 2,300 yuan in 2001 compared with growth of 8.2 per cent in the cities.

Now, they hope to use arable land better and restructure the backward farming sector.

"We see changes in the agricultural structure, with eastern coastal areas boosting production of cash crops and export-oriented produce," said Qiu Xiaohua, deputy director of the State Statistical Bureau.

"The central region is focusing on growth of high-quality grains, while cutting cotton acreage. The west is speeding up production of specialized crops like fruits, vegetables, tobacco and medicinal herbs," Qiu said.

Anhui is spearheading rural tax reforms to replace a mesh of ad hoc fees with one farm tax of around 8 per cent to help relieve farmers' burden.

The government hopes this will help lift farmers' income despite growing labour costs and sluggish grain prices.

Analysts said domestic grain prices have been weak partly due to high grain stocks, which official estimates put at around 250 million tons earlier this year.

Worse, prices are expected to fall further now that China is a member of the WTO, which may invite more imports of cheaper grain.

| frontpage | nation | business | HK\Taiwan | snapshots | focus |
| governmentinfo | economic insights | campus life | Shanghai today | metropolitan |