Farmers who have been resettled for the construction of reservoirs are entitled to 20 years' financial support, according to a new regulation.

The government has begun to identify those qualified among the 20 million who have been moved during the process of building more than 3,300 medium and big-size reservoirs since 1949.

Each resettled farmer who moved before July 1 this year can obtain 600 yuan (US$75) every year to buy basic living necessities or use as "seed money" for further development.

For new movers, the same 20-year benefit will start once they finish resettlement.

The measures were part of a State Council regulation unveiled yesterday.

According to the National Development and Reform Commission, the financial support will mainly come from electricity revenues.

At the end of June, the commission decided to raise retail prices of electricity by an average of 0.025 yuan (0.31 of a US cent) per kilowatt-hour (kwh) for the first time since May 2005.

"Nearly 40 per cent of the revenues from the hike will benefit the farmers," said sources with the commission.

In addition to the financial support, the price hikes are intended to resolve the contradictions caused by rising coal prices, promote the development of renewable energy, install desulphurization facilities at coal-fired power plants and fund more power grid projects, said the official.

According to the regulation due to take effect on September 1, those displaced who registered as urban residents will not benefit from the regulation.

The State Council vowed to guarantee "freedom" for farmers on how to use the annual subsidy.

"They can choose to invest them into a local project fund for further development through democratic decision-making or they can get cash to buy food and clothes," said regulation.

It said the support after resettlement is an addition to compensation for trees, farming facilities and other personal assets on the land, which should be paid directly and in full by the local county-level governments to farmers.

The regulation said that the compensation should be 16 times the average annual output value of the land being acquired, and allow the farmers to maintain their living standards.

The State Council also required relevant departments and local governments to stop malpractices when implementing the measures.

"We should ensure qualified farmers really see and use the money," said the State Council.

In the Three Gorges Dam Project alone, 327 cases regarding the mismanagement of resettlement funds, with 369 suspects and 55.79 million yuan (US$6.89 million) involved, had been found by the end of last year. Funds for displaced residents have reached 45.3 billion yuan (US$5.59 billion), said the Three Gorges Construction Committee.

Editor: Yan