More migrant farmers are likely to sink into poverty because of SARS.

Experts and officials believe that migrant labourers have been the hardest hit by the virus in terms of unemployment, followed by laid-off workers and university graduates.

Cai Fang, a researcher with the Chinese Academy of Social Sciences, said poverty rates in rural areas will increase because 7 to 8 million farmers have returned to their home towns and lost their city jobs.

Some experts forecast that migrant labourers are expected to lose some 40 billion yuan (US$4.8 billion) of income by the end of 2003.

"The income of farmers, most of whom are heavily dependent on jobs in cities, has diminished greatly and they will probably struggle against poverty," said Cai.

By the end of 2002, about 28.2 million people were in absolute poverty, and about 58 million Chinese people had just risen above the poverty line.

In rural areas, about 3 per cent of farmers have been bedeviled by absolute poverty and 6.2 per cent of other farmers are low-income earners.

Chen Huai, a central government think tank researcher with the State Council Development and Research Centre, suggested that migrant labourers should be granted short-term unemployment allowances.

Unemployment benefits are crucial to maintaining social stability in rural areas, spurring consumption and in turn invigorating production and creating more jobs, the expert said.

And migrant farmers are not the only victims of unemployment due to SARS. The State Council has admitted that the disease has worsened unemployment in China's cities. The jobless situation was already considered "grave" because of surplus labour supply and laid-off workers.

"Economic uncertainties caused by the SARS outbreak have added new difficulties and had a negative effect on employment," said the central government in its recent circular.

Officials with the Ministry of Labour and Social Security said it would be a challenge to realize this year's employment targets.