At the moment the 18 put fingerprints in red ink on the contract, they were fully aware that it was a severe violation of people's commune rules and was a risk that might ruin them. Yet had they courage of their convictions because they trusted each other, a trust that came from family. Of the 18 farmers, 13 belonged to a big clan with the name Yan and four of the other five had the same second name, Guan.
Though the vast nation was still working under a planned economy, 30 years ago the 18 villagers understood the importance of commercial trust. Family trust was to play a vital role in their unprecedented efforts in 1978, a time when Anhui province was suffering through a severe drought.
In December, 1979, Wan Li, the former party secretary of Anhui province, told a meeting that the rural household agriculture production contract was a socialist production system, emphasizing that farmers involved were socialists, not capitalists, according to Wan's Selected Works.
During a conference on long-term economic development held by the Central Committee of the Communist Party of China in April, 1980, Deng Xiaoping confirmed achievements in grain production in Anhui through the household contract responsibility system and said it should be implemented in more provinces, including Gansu, Yunnan and Guizhou, and Inner Mongolia autonomous region.
In Deng's Selected Works, he wrote that "it seems to me that there is no need for people to worry whether the system will diminish the collective economy - the current major problem of our rural work is that our thought has not been fully liberalized".
In 1980, when the rural household contract responsibility system faced widespread political resistance from other top policy makers, Deng gave peasants strong backing and in October, 1981 "the summary of the national agricultural working conference" praised the new countryside system that began with the Third Plenum of the 11th Congress of Communist Party in December, 1978.
By 1983 the rural contract system was widely implemented across the country. At the end of the year, more than 90 percent of the Chinese rural households had joined.
Productivity
The approach greatly increased productivity. From 1978 to 1988 per capita agricultural output increased 65.1 percent through an average annual growth of 5.1 percent. Grain production rose 16.3 percent, some 1.5 percent annually. Improvement in rural labor productivity in that decade surpassed the total of the previous 29 years from 1949 to 1978.
After villagers earned the right for individual agricultural production, great numbers of rural workers, no longer tied to communes, went to township factories, greatly improving the development of rural industries. By 1987 production value at township enterprises reached 450 billion yuan, more than 20 percent of the nation's gross social production value.
In 1978, grain production made up 67.8 percent of agricultural output, forestry contributed 3 percent, animal husbandry comprised 13.2 percent, subsidiary production was 14.6 percent and fisheries yielded 1.4 percent.
By 1991, grain production comprised 57.2 percent of total farm products, forestry was 4.5 percent, animal husbandry was 26.4 percent, subsidiary production was 6 percent and fisheries were 5.9 percent.
The rural responsibility system not only prompted a change in the means of agricultural production, but also lifestyle. No longer only producers for self sufficiency, farmers became commodity producers and managers. By the end of 1980s, China had established more than 1,800 agricultural trade markets and 7,600 free markets, helping facilitate the development of a market-oriented economy in the countryside.
In the decade to 1988, rural per capita income reached 544.9 yuan, up 441 yuan from 1978 - and 3.6 times more than the total increase from 1949 to 1978.
Change in land-use rights
Following the founding of the People's Republic of China, the government instituted reforms that abolished feudal land ownership. In 1952, land use was transformed entirely from individual to collective use.
The people's commune movement, which began in 1955, established a system in which land was owned and managed by collectivities - yet they were later found to lack flexibility and effectiveness in arousing worker enthusiasm.
Although the contract responsibility system did not change the nature of land ownership when it began in 1978, it did change the nature of land use rights, with management improved through more balanced benefits.
Allotting land contracts and management rights to every household - a combination of rights and responsibilities - was eagerly embraced by peasants as well as other social groups.
The stable transformation to a new system, the low social costs of systemic reform and its subsequent benefits all contributed to development of rural economy and social stability. Yet due to its history, the nation lacked mature theories and policies for individual farm production.
The household contract system focused only on modes of production and management, and did not include reform of ownership. In contrast to urban State-owned land, reform of rural land ownership was not systematic or thorough.
As the socialist market economy developed, disadvantages of the household contract system gradually emerged, severely hindering rural productivity and the balance between urban and rural economic development.
Growth in grain production has leveled off and farmers' incomes have grown slowly since 1997. Many have abandoned all or part of their land and those who remain are inefficient as they are not enthusiastic about farming, preferring instead to travel to cities for work. Often times only older women stay home to work in rural areas.
Rural problems are getting increasingly serious due to before-hidden conflicts that have emerged. Unclear division of land ownership, unstable land contract rights and defects in the system for transferring land rights have resulted in farmers with little motivation to invest into their land.
The government was expected long ago to search for improvements to overcome the vague collective land ownership system. Some experts say that the best way at present is to perfect the existing system by innovating farmers' collective organizations, strengthening land use rights and improving regulations over rural land transfers.
(China Daily 03/03/2008 page2)