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China PLANNING AND ORGANIZATION
The state's role in the mid-1980s was chiefly to plan
production and manage resources. Among state institutions at the
national level, the Ministry of Agriculture, Animal Husbandry, and
Fishery was primarily responsible for coordinating agricultural
programs. Other central bodies of importance in agricultural policy
matters included the State Economic Commission; the State Planning
Commission; the ministries of commerce, forestry, and the chemical
industry; the State Statistical Bureau; and the Agricultural Bank;
and various academies and institutions that conducted research on
agricultural science, agricultural economics, and related subjects.
Between state institutions at the national level and the
townships and villages at the base of the administrative hierarchy
were various provincial-level, prefectural, and county-level
government organs that also administered programs, including some
agricultural research and extension activities. Some 2,000
county-level units coordinated programs and enforced policies with
the economic cooperatives and households in their jurisdictions.
County-level units sometimes operated their own chemical fertilizer
plants or other factories producing basic agricultural items, and
they helped direct the
allocation of the materials produced to peasant farmers.
Some agricultural production occurred on state farms where
workers received regular wages, like factory workers. State farms
were mostly found on the fringes of the main agricultural areas,
especially on newly reclaimed land and particularly in the
northeast, where they nevertheless accounted for only about 4
percent of total cultivated land.
Most of the economic activity in rural areas took place within
the context of collectively and privately owned enterprises.
Economic cooperatives, enterprises, and households were guided by
their own self-sufficiency requirements, pursuit of profits, and
compliance with annual economic plans. Forces of self-sufficiency
continued to play an important role in decision making, especially
as farm households allocated resources to ensure their own food
grain rations. The pursuit of profit traditionally had been a
driving force in rural areas, and although this energy had largely
been curbed in the past, in the 1980s farmers were encouraged to
seek profits.
The state drafted annual economic plans that were passed down
through administrative channels to assist local cadres. Operators
of farms and other enterprises reviewed the plan targets, which
guided them to make proper economic
decisions. The state has used both direct and indirect methods to
affect decisions. In past decades cadres decided what would be
produced, what production techniques were to be employed, and how
output was to be distributed on the basis of annual plans. Indirect
controls, such as prices and interest rates, became more important
after 1980. Different combinations of the forces of selfsufficiency , profits, and state plans affected decision making for
a given product in a given year. For example, in 1985 cotton
farmers were told via state plans how much area to plant in cotton,
whereas farmers received no state plans to sow fields with melons;
rather, they planted melons in the hope of increasing profits.
The state continued to control the economic behavior of farm
households, economic cooperatives, and enterprises through powerful
political and administrative mechanisms in the late 1980s. The
first of these mechanisms was the more than 83,000 township
governments, which were responsible for civil and military affairs,
public security (police), family planning, and statistics. Village
committees numbered more than 940,000 and were subordinate to
townships. Although they were not formal government institutions,
they maintained public order, managed welfare services, and oversaw
water conservancy projects. Probably the most powerful entities on
the local level were Chinese Communist Party committees in
townships and the subordinate party branches in villages. More than
20 million rural party members staffed posts and headed committees
that supervised all aspects of rural life. They coordinated
relations between party, government, and economic entities, and
they ensured that party policies were followed. They nominated
candidates to administrative posts and approved applications for
military service, jobs, and opportunities for higher education
(see Rural Society
, ch. 3;
The Cadre System
, ch. 10).
The second mechanism--control of marketing functions--gave the
state powerful tools to influence agricultural decisions. As in
other centrally planned economies, the state was responsible for
organizing and directing a major part of the flow of resources
between sectors. It could achieve this using a variety of means,
including prices and markets as well as direct controls. It needed
to balance the needs of various sectors for input such as fuel,
cement, timber, and machinery (as well as the needs of consumers in
both rural and urban areas) in trying to meet its goals
(see
Structure and Operation of the Economy;
Living Standards
, ch. 5).
The government procured grain and other agricultural products from
the peasants to supply urban areas and food-deficient regions with
subsistence and to provide raw materials for textile and other
light industries. Part of the required amount was obtained simply
as a direct tax. The proportion obtained from taxes declined over
time, however, and the tax in 1984 was less than 3 percent of the
value of total production. The remainder was obtained through
purchases by state procurement agencies.
In the period from 1957 to 1978, the state raised prices for
agricultural produce while lowering the prices of basic items such
as fertilizer and fuel used in agricultural production. This was
necessary to promote the use of more fertilizer and fuel to obtain
greater production and to provide incentives for the production and
sale of agricultural commodities.
As a third mechanism, the state exercised considerable leverage
in rural affairs through its control over credit and agricultural
production supplies. The state owned and controlled some 27,000
agricultural banks that served rural areas and provided production
loans. Agricultural banks also supervised the activities of more
than 42,000 credit cooperatives that provided banking services for
cooperatives and rural households and provided production and
consumer loans to customers. The state controlled banking
activities through administrative regulations, loan policy, and
interest rates. The state regulated delivery of fertilizer,
machinery, and fuel through its marketing channels. In addition,
government control of water and electricity supplies provided the
state with an important lever to induce farmers to comply with
political policies and economic plans (see
table 12, Appendix A).
Finally, local governments possessed considerable influence in
local affairs because they delivered social welfare services.
Economic cooperatives and peasant households were not likely to
engage in activities that could lead to diminishing supplies of
social services. Rural families desired and increasingly felt
entitled to medical, education, welfare, and cultural benefits.
Villages competed to have these facilities located within their
boundaries, not only to have more convenient access to their
services but also to take advantage of the employment opportunities
they afforded.
Data as of July 1987
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