LIDONG VILLAGE, China (Reuters) - China has declared an emergency over a drought which could damage the important wheat crop, threatening further hardship for farmers amid slumping economic growth.

A shepherd watches over his flock of goats and sheep on a drought-ridden field near the village of Houyan, located around 400 kilometres (248 miles) south of Beijing February 5, 2009. REUTERS/David Gray

The dry winter gripping parts of central and northern China has sent Zhengzhou wheat futures up 5 percent this week but physical prices have not moved, with most investors confident the country’s reserves and last year’s big harvest can offset any fall in wheat production this spring.

The drought could hurt farmers in Henan, Anhui and Shandong, where many have lost factory and construction jobs after China’s growth faltered in late 2008.

“This winter there was no snow, no rain. That’s not good for the wheat,” said Zhao Mifen.

Zhao and her husband farm one-fifth of a hectare in the flat plains near Xingtai, in southern Hebei Province, and supplement their income making construction materials.

The national Office of State Flood Control and Drought Relief this week declared a “level 2” emergency, warning of a “severe drought rarely seen in history,” the People’s Daily reported.

The absence of rain or snow since November has affected 9.5 million ha of farmland -- 37,000 square miles, or 43 percent of the winter wheat sources, the China Daily reported.

In the hardest-hit areas, in Henan and Anhui, output of winter wheat, which is harvested in May, could be reduced by one-fifth, agricultural analyst Ma Wenfeng told the China Daily.

Overall, output from major wheat-growing areas could be cut by 2 to 5 percent, Ma estimated.

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IRRIGATION

Chinese culture originated in the flat central plains, where for millenia farmers and rulers have wrestled the rivers to control flooding and irrigate the dry fields.

This time, the central government has mobilized drought relief funds and irrigation assistance, even as a downturn in the export sector raises worries that farming communities will suffer from a drop in remittances from migrant workers.

Local officials must make “fighting the drought and protecting seedlings a major task” and expand irrigation coverage said Zhang Zhitong, deputy chief of the drought relief office.

Sun Tongling said his wheat crop was about normal, as he opened an irrigation channel into his crops near Lidong village.

“It’s true that it’s been dry this winter with no snow. We won’t really know until March if there has been any damage.”

Almost 40 percent of drought-hit wheat areas in seven provinces had been irrigated, the Agriculture Ministry said.

Many more farmers who order their lives by the lunar calendar will wait until after the Lantern Festival on Monday to begin irrigating and fertilizing their fields.

“You can see the wheat is a bit yellow already, but we’re not allowed to irrigate here until after the Lantern Festival,” said Wang Baoxi, who was building a house near his fields in Houyan village, in the foothills west of Xingtai.

“The wells are low but there’s plenty of water in the reservoir.”