The document, jointly released by the Central Committee of the Communist Party of China and the State Council, is the first set of major policies to be released this year and focuses on rural development for the fourth consecutive year.

"Developing modern agriculture has proven to be the basic channel through which farmers' incomes can be increased," said the document.

Last year, the per-capita income of Chinese farmers stood at 3,587 yuan (460 U.S. dollars), less than one third of the level of urban residents.

To bridge the wealth gap, the central government said it would pump more money into rural areas. "Most of the fixed-assets investment and money earmarked for education, public health and culture this year should go to rural areas," the document said.

"Local governments should also channel more money it earns from selling land use rights to the countryside," it said.

The document advocated the establishment of a mechanism to secure stable sources of capital from both government and financial institutions.

Both the central and local governments should allocate special funds to support the processing of farm produce, which is higher value-added than land-intensive farming, it noted.

"The livestock breeding industry has a direct bearing on the lives of the general public ... Governments at various levels must strengthen its control over fodder quality," it said, urging more money to be spent on subsidizing the breeding of fine dairy cattle and the prevention and control of animal epidemics.

The central government will also make greater efforts to equip the agriculture industry with modern technology this year.

"China will continue to focus on improving the quality of farming and raise the utilization rate of the land and other natural resources in rural areas," it said.

The country will also stick to the principle of self-reliance in food provision and gradually build a stable, well controlled and highly efficient food safety guarantee system.

In 2006, China produced more than 490 billion kilograms of grain, only one percent increase on the 2005 figure, but nevertheless an increase in output for the third straight year.

The Study Times, a newspaper affiliated to the Party School of the Central Committee of the Communist Party of China, predicted that China could face the possibility of a 4.8 million ton grain shortage in 2010, almost nine percent of the country's grain consumption.

To prevent a shortfall in grain crops, the government said it would strive to stabilize the total area of arable land, raise the output per unit and improve farm produce quality.

The government also said it would tightly monitor the production, consumption, inventory, imports and exports of farm produce to secure market stability.

Last November, China's grain prices went up 4.7 percent on average, and are expected to rise 6 percent this year.

One of the top targets for this year is to "establish an efficient market surveillance system to be alert to risks of grain shortfall", said the document.