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BEIJING, Jan. 3 (Xinhua) -- Reforming the system of collectively owned rural assets through share-holding cooperatives will inject new growth into the rural economy and increase farmer incomes, a senior Chinese official said.

"The reform is crucial to improving the vitality of the collective economy in rural areas," Minister of Agriculture Han Changfu said at a press conference Tuesday.

Farmers can voluntarily turn their rights in collective operating assets into shares and acquire corresponding revenue, according to a guideline jointly released last week by the Communist Party of China Central Committee and the State Council.

"The reform has far-reaching significance, and will help promote agricultural development, increase farmer incomes and maintain stability in rural areas," Han said.

China aims to finish verification of assets owned by villages within three years and to complete the share-holding reform on operating assets within about five years, he added.

In China, rural collective assets consist of resource assets such as land, forest, hills and grassland; operating assets such as buildings,machinery, rural infrastructure and enterprises; and non-operating assets such as those used for education, science, technology and other public purposes.

All three types of asset will be checked thoroughly to ascertain the exact assets and liabilities of villages and towns, Vice Minister of Agriculture Chen Xiaohua said at the press conference.

"The will of farmers must be respected in the whole process of asset verification, with the participation and supervision of farmers," Chen said.

China will adopt a three-pronged approach in regulating the three assets types, with operating assets at the forefront of this latest reform, Han said.

If the huge stock of collectively-owned assets can not be revitalized and used efficiently, they cannot deliver their due effect, Han said.

The management of this huge pile of collectively-owned assets should chime with the market economy and the trend of rural-urban integration to help farmers enjoy the benefits of the reforms, Han added.

Small-scale pilot schemes have started since May 2015, allowing farmers to own, benefit from, collateralize and inherit shares.

Dividends earned from businesses under the share-holding reforms amounting to 41.1 billion yuan (5.9 billion U.S. dollars) were distributed to farmers nationwide in 2015, official data showed.

The world's second largest economy had about 58,000 villages by the end of 2015.

"It has become increasingly challenging to help farmers increase incomes in a consistent manner, while it has also become a more pressing task to protect farmers' property rights," Han said.

China is endeavoring to establish a clearly-defined, well-functioning and strongly-protected property right system in rural areas, he stressed.

In essence, the reform can enable farmers to receive dividends like shareholders, and reduce the urban-rural income gap. Prior to the reform, farmers were only owners of these assets in name, which they could not operate or profit from, experts said.

The urban-rural income ratio was about 2.8:1 as of the end of September 2016, according to official data.

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