Seeds of change

Confucius famously said more than 2,500 years ago that "you do not suffer from those who do not understand you - you suffer from your misunderstanding of others".

The observation is still widely quoted today as people and companies set out on new adventures, including those who make their living from the land.

Today's efforts at understanding include those about the plight of farmers. The late Chinese leader Deng Xiaoping said one should shi shi qiu shi - seek the truth from facts - and the facts show that millions of rural workers have left the soil behind to seek work in city factories, their traditional way of life eroding in the changing climate of modernization.

Yet China's economic reform actually began in the countryside. In the Museum of the Chinese Revolution, displays show that Xiaogang village of Fengyang county in East China's Anhui province was the birthplace of reform three decades ago, when the first rural household responsibility contract came to life among 18 villagers.

Today they are noted figures, but 30 years ago they were unknown, just a small handful of the almost 1 billion people then in the nation. Their initiative has since spread, developed into a system approved by the central government and implemented throughout the country.

During a winter's night in December, 1978, the 18 rural residents, worried about the survival of their families, secretly gathered in Yan Lihua's small house to press their fingerprints on a contract.

"We allot farmland to households under contract," it read. "Each householder must give their signature or fingerprint here, if they can. Each household must ensure the fulfillment of contracted grain to the State, and promise not to ask for assistance from the government for grain and money. If we fail, we - the village leaders - are ready to be put in jail and other commune members pledge to take care of all of our children until they are 18 years old."

The 18 peasants were Yan Hongchang, Yan Lifu, Yan Lihua, Yan Likun, Yan Jinchang, Yan Jiazhi, Yan Xuechang, Yan Lixue, Yan Junchang, Yan Meichang, Yan Fuchang, Yan Jiaqi, Yan Guopin, Guan Tingzhu, Guan Youzhang, Guan Youjiang, Guan Yousheng and Han Guoyun.

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)