Household farms

The practice of household contract responsibility was initiated by a group of farmers in a small village in Anhui province, East China. The late Chinese leader Deng Xiaoping once termed it "a great invention of Chinese farmers".

Farmland is still owned by the public, while production and management are entrusted to individual households through long-term contracts. During the contract period, farmers pay taxes to the State and provide produce to local governments, then keep the rest for themselves.

The system was so enthusiastically embraced by farmers that by the end of 1983 it had incorporated more than 90 percent of farming households. The system not only unleashed agricultural productivity but also a large rural labor force to work in village-run factories and township enterprises that have evolved into an important sector in the rural economy.

The system also changed rural lifestyles. It helped elevate villagers from self-sufficient farmers to commodity producers and managers while promoting the development of rural markets.

Since the household contract responsibility system was implemented more than two decades ago, China's agricultural production has increased at an average annual rate of 6.7 percent, well above the world average. The annual growth rate of grain production is 2.7 percent, with total grain output exceeding 500 billion kg in 1996, making China the largest grain producer in the world. Output of cotton, cereals, oil, sugar, meat and milk products has increased several times over. Per capita consumption of meat, eggs and milk is either close to or above the world average.

(China Daily 03/03/2008 page2)