The household registration (hukou) system should be scrapped in three to five years so that farmers enjoy the same status as urbanities, a government-sponsored expert group has suggested.

The proposal, which China Daily obtained on Tuesday, means that millions of migrant workers in cities will get the same social benefits in employment, education, healthcare and housing as their urban counterparts.

The National Development and Reform Commission (NDRC), which conducted a research on the issue along with the Australian government, did not comment on the timetable but expressed "solid support" for the reform.

The NDRC has listed it as "one of the key issues and priorities" after three decades of fast economic growth.

"We are going to neutralize the hukou system to strip it of its many social functions," NDRC Deputy Secretary General Ma Liqiang told an international conference on balanced urban-rural development on Tuesday.

"By 2020, farmers will have equal rights and development opportunities as urban residents," said Ma, who described the hukou system as an "institutional barrier."

Geoff Raby, Australian ambassador to China, echoed his view. "The institutional barriers, taking shape for decades, should be removed," he said.

Kong Jingyuan, NDRC's department director in charge of economic system reform, said a new registration system, based on pilot reforms in more than 12 provinces and autonomous regions, should replace the hukou system.

"We should terminate the social difference between the urban and rural residents," Kong said, adding that the government will remove barriers to facilitate a "free flow" from rural regions to cities.

"We encourage farmers who have a place to live in cities and have stable income to register there," Kong said.

The country's urbanization rate has hit 43 percent and about 200 million migrants are working in cities, but they are not considered urban residents.

The urban-rural social and economic disparities have posed challenges to further development and social stability.

Official statistics show that the income gap between urban and rural residents have been expanding, from 2.57 times in 1978 to 3.28 times in 2006.