China is trying to speed up agricultural industrialization to meet the forthcoming challenges that it faces as the country enters the World Trade Organization, a top agricultural official said.

"Agricultural industrialization is a basic way to solve China's disadvantage in agricultural resources and its laggard technologies," said Fan Xiaojian, vice-minister of agriculture.

Fan made his remark yesterday at the ongoing International Conference on Agricultural Science and Technology, that opened on Wednesday and ends today.

Fan said the government will further support agricultural product-processing enterprises to increase their presence in rural areas and will sign planting contracts with farmers.

"This is an efficient way to educate China's many farmers about how to produce goods in accordance with market demands," said Fan.

Meanwhile, the government is also considering slashing State-owned agriculture research institutions and may merge some into enterprises, the vice-minister revealed.

"Through enterprises, new and efficient agricultural technologies can be better popularized," said Fan.

China has more than 900 million people living in its rural areas, including 500 million rural labourers. It is estimated that surplus labour in the countryside has surpassed 180 million.

While absorbing rural labourers, processing enterprises can greatly increase the value of farm produce, which in recent years has seen decreasing prices. Huge labour and limited land has made China's agricultural production cost extremely high.

The situation also delays the spread of advanced technologies in rural areas.

Fan said the household responsibility system - which allots land to the rural population on a contractual basis and has largely helped promote China's farm production since the late 1970s - will still go ahead.

However, in recent years certain problems have challenged China's agricultural industrialization. When market demands dwindle, many enterprises often break contracts they have signed and agreed upon with farmers, causing great losses.

"The main reason is enterprises have a more advantageous status than farmers," said Zhang Xiaoshan, director of the Institute of Rural Economic Research under the Chinese Academy of Social Sciences.

Zhang suggested forming farmers' co-operatives will strengthen their efforts with these enterprises.

Chen Xiaohua, director of the Rural Economic Management Department under the Ministry of Agriculture, said the central government is experimenting with such co-operatives in several provinces.