While urban Chinese continue to discuss the finer points of democracy, rural peasants, the vast majority of the nation's people, have begun trickling into this city to complain of hunger and low incomes.

The farmer protests, one of which ended in a bitter scuffle with city youths yesterday, suggest that a major relaxation of the old collective farming system has brought a crisis of rising expectations to the Chinese country side.

The change appears to be the most far-reaching since Chairman Mao Tsetung introduced the people's communes two decades ago, and the results just as uncertain. It concerns what is, despite all the current talk about democracy, still the central problem of Chinese life: how to grow enough food to feed nearly a billion people.

Large peasant families now are being allowed to cultivate private plots and collect extra profits as they wish. Rural people without large families, with bad political labels or with infertile land appear to be finding their lot worsening in comparison to their neighbors.

"They gave me a bad label during the Cultural Revolution and now I can't get enough work to make ends meet," said a peasant, carrying a moth-eaten bedroll, to a group of people reading wall posters on Peking's Democracy Wall Sunday. Yesterday, after a group of peasants scuffled in Tienanmen Square with city youth who made fun of their protest against hunger, one man got up and made a speech about the difficulties of living in the countryside without a large family to help him collect shares in the village harvest.

The sudden softening of the emphasis on collective farming has been so fast and dizzying that last year's model farm for all of China -- the village of Tachai -- has been taken to task by its own leader for "arrogance that has impeded our progress." Tachai Communist Party Secretary Kuh Fen-lien was quoted by the official New China News Agency today as saying: "We still lag behind... in developing a diversified rural economy."

Tachai for years bragged that it had abolished private plots in favor of common cultivation of all land. Now the Chinese in some areas are encouraged not only to have private plots, but to sell their vegetables and other excess crops directly to city markets without state interference, a plan based on a Yugoslav model.

"Peasants are practical-minded people," the People's Daily said in a front-page story calling for improved living standards in the countryside. "They deepen their love for socialism only when they feel in terms of their own vital interests that it is superior to capitalism."

The problem with loosening controls is that it provides little comfort to the millions of Chinese peasants living in mountainous or semiarid parts of the country where grain yields are always low. The commune system was supposed to rescue such peasants by allowing them to draw on the resources of the richer villages in their area.

Now, local officials have been criticized in the People's Daily for taking away too much of the produce of these rich villages and thus discouraging further production. Little is said about what this new system does to the poorer villages, but several new wallposters here discussing rural poverty and the hunger marches by a few hundred peasants this week suggest that many rural Chinese see their chances of a good life diminishing, not increasing.

There has been a hint from at least one large rural province that the relaxation of collective farming rules may also hurt the campaign to curtail population growth. Since a family with more able-bodied members can devote more time to private farming, some peasants now may be encouraged to have more children.

"Some places have set implementing the rural economic policies against implementing the policy of planned parenthood, and have relaxed leadership over this work," said a Kwangtung Province broadcast announcing 100,000 births in excess of the official quota in 1978.

The government has tried to arrange a general rise in incomes for all peasants by promising a 20 percent increase in the state purchase price for grain bought next summer. The price for grain produced above the quota will be another 50 percent above that, the Communist Party Central Committee announced three weeks ago.

The government has not explained, however, how it is going to keep these price rises from producing inflation in the cost of farm equipment and consumer goods that peasants will want to buy with their new incomes. The system also still tends to favor the peasants with the best farming conditions.

Peasants are encouraged to raise more private pigs, chickens and ducks. Only 40 percent of pigs raised now need to be sold to the state, compared to the old requirement of 50 percent. This gives peasants more pork to consume themselves or to sell on the private market.

China has not, however, ended the system of distributing each working group's harvest through work points. Because of the peculiarities of Chinese society, it is difficult to turn this system into an incentive for greater individual grain production.

Each person is awarded a number of work points per day's work, usually 7, 8, 9 or 10. Supposedly the whole village decides what each member's work is worth at a village meeting. But according to one analyst, "Chinese problems with group dynamics intrude.People don't want to risk bad personal relations by saying they need more points than anybody else. So either nobody says anything or everyone gets into a big argument. Either way the local officials have to end up giving everybody the same."

Here in the big Chinese cities, nearly everyone earns a wage and a guaranteed grain ration, so urban dwellers can concern themselves with more abstract issues like human rights.

The democracy advocates here seem to be directing much of their ammunition at the world press. Resident foreign correspondents have been warned in advance of planned demonstrations. A visiting Voice of America correspondent was telephoned by a man wanting to discuss human rights.

A cartoon pasted up in Tienanmen Square showed maps of China forming two sides of a cage which held many people. "As Teng Hsiao-ping said, 'we do not want to discuss human rights,'" the caption said, referring to a remark the vice premier made to American journalists that was reprinted in the People's Daily. A sign over the cartoon said: For attention of foreign journalists.

The peasant marchers have some difficulty gaining access to big cities. One farmer said yesterday he had spent every cent he had getting here. But they appear to be becoming tuned to the media. When a Canadian reporter aimed a camera at an old peasant complaining about his life at the Democracy Wall Sunday, he posed with a big, toothless grin, holding up his meager possessions.