CHINESE COMMUNIST POLICY ON COMMUNES 1960-61

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79R01141A002100140001-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 24
• Document Creation Date: December 23, 2016
• Document Release Date: July 29, 2013
• Sequence Number: 1
• Publication Date: September 1, 1961
• Content Type: REPORT

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CONFIDENTIAL
Economic Intelligence Report
N? 3
CHINESE COMMUNIST POLICY ON COMMUNES
1960-61
CIA/RR ER 61-42
September 1961
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
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CONFIDENTIAL
Economic Intelligence Report
CHINESE COMMUNIST POLICY ON COMMUNES
1960-61
CIA/RR ER 61-42
WARNING
This material contains information affecting
the National Defense of the United States
within the meaning of the espionage laws,
Title 18, USC, Secs. 793 and 794, the trans-
mission or revelation of which in any manner
to an unauthorized person is prohibited by law.
CENTRAL INTELLIGENCE AGENCY
Office of Research and Reports
CONFIDENTIAL
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FOREWORD
Since mid-1960 the organizational form of the rural
commune has remained essentially unchanged, but important moderating
changes in economic policies have occurred. These changes are de-
scribed and evaluated in this report, which also reviews briefly the
organizational form of the present-day rural commune. A brief survey of
the urban commune is included.
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CONTENTS
Summary and Conclusions
I. Organization as of 1 August 1961
A. Rural Communes
B. Urban Communes
Page
1
3
3
4
II.
Policies, January 1960 Through July 1961
5
A.
Radical Policy, First Half of 1960
5
B.
Moderate Policy, Second Half of 1960 and First Seven
Months of 1961
6
1. Limited Revival of Private Peasant Activity ? ? ?
7
2. Efforts to Placate the Peasantry
8
3. Financial and Investment Policies
9
4. Labor and Management Policies
a. Curtailment of Activities Other Than Cultiva-
11
tion of Crops
11
(1) Rural Construction
11
(2) Collective Hog Farms
12
(3) Commune Industry and Other Undertakings at
the Commune Level
12
b. Reassignment of Labor Back to Farm Work .
c. Discontinuation of Superintensive Farming
13
Methods
d. Delegation of Responsibility to Production
13
Teams
14
III.
Outlook
15
A.
Instability
15
B.
Inefficiency
17
C.
Prospects of Success
18
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CHINESE COMMUNIST POLICY ON COMMUNES*
1960-61
Summary and Conclusions
Poor harvests, inefficient management, and mounting peasant unrest
compelled Chinese Communist leaders during the fall of 1960 to moderate
their policies on rural communes. Major changes in the functions of the
communes were made to allow the peasant more freedom, to delegate more
responsibility to low-level officials, and to eliminate wasteful and in-
efficient management practices. These changes continued through the
first 7 months of 1961. For ideological reasons, however, the leaders
have refused thus far to make major modifications in the formal organi-
zation of the commune, which has remained essentially unchanged since
the reorganization of 1959.**
The present-day Chinese rural commune is essentially a federation
of collectives and is organized on three levels: the top level (the
commune proper), the production brigade, and the production team.
Authority is centered mainly in the production brigade, which since
the reorganization of 1959 has been permitted considerable autonomy in
planning and directing production and in distributing income. The
brigade, with 240 households on the average, resembles in size and func-
tion the Soviet collective farm and the former Chinese agricultural
producers cooperative. Production teams of about 40 households do the
actual farm work under contracts signed with their brigades.
Urban communes, which were revived on a wide scale early in 1960,
have been less important and less disruptive than rural communes.
Their organization has been shadowy and their role limited. In a
typical urban commune, messhalls and communal services were set up to
free housewives for work in small-scale communal workshops, which pro-
duced items for consumers and intermediate products for state-owned
factories. Scant attention has been paid to the urban commune in the
official press since June 1960, and its future is in doubt.
* The estimates and conclusions in this report represent the best
judgment of this Office as of 1 August 1961.
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During the first half of 1960 the Chinese Communists were still
operating in a "leap forward"* mood, although less exuberantly than
in 1958. Radical programs carried out early in 1960 included a drive
to expand the collective raising of hogs, a high-pressure program to
expand rural industry, the scheduling of a vast amount of rural con-
struction work on irrigation projects and roads, and a campaign to
revitalize urban communes. All these programs were curtailed or sus-
pended by the end of 1960.
In the countryside the general effect of changes in policy adopted
during the fall of 1960 was to cause a return to agricultural practices
prevailing before 1958. The new rural policies had four broad objec-
tives: (1) to encourage a limited revival of private plots and the
free rural markets; (2) to reduce peasant unrest by such measures as
allowing the peasant more freedom, slowing the workpace, and compensat-
ing him for property confiscated in 1958; (3) to overhaul finances,
curtail wasteful investments, and cut costs; and (4) to improve labor
and management policies. Basic to new management policies was a sharp
curtailment in nonagricultural activities, with large numbers of peas-
ants reassigned to production teams to engage in field work. Thousands
of officials also were transferred down to production teams to strengthen
leadership at the bottom level. The increased importance of teams was
stressed further when brigades were instructed to allow teams more lee-
way in making production decisions such as the time of sowing.
Agriculture under Chinese Communist rule has been marked by insta-
bility and inefficiency, characteristics that probably will persist as
long as the country is ruled by impatient and doctrinaire leaders such
as Mao Tse-tung and Liu Shao-chi. These leaders can be forced to relax
controls whenever their mistakes become disastrous, as in 1960, but in
general they believe that the long-term solution lies not in getting
along with few controls but in devising correct controls.
* The term leap forward as used in this report refers to the regime's
policy -- instituted in 1958 and carried over into 1959 and 1960 in
milder form -- of working men and machines at maximum speed with only
secondary concern for the quality and variety of output.
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I. Organization as of 1 August 1961
A. Rural Communes
The organizational structure of the rural commune in Communist
China was stabilized in its present form during 1959, when the most
radical features of the original 1958 commune were dropped.* The
original huge commune of 1958 had quickly proved inefficient in carry-
ing out agricultural and allied tasks, and key management responsibili-
ties were returned in 1959 to the next lower level of organization --
the production brigade, which is similar in size of labor force and
function to the former Chinese agricultural producers cooperative and
to the Soviet collective farm.
The rural commune is organized on three levels: the top level
(the commune proper), the production brigade, and the production team.
There are about 24,000 communes averaging 5,000 peasant households
each, 500,000 brigades averaging 240 households each, and 3 million
teams with about 4o households each. There are wide variations in the
size of individual units, however, depending on the density of popu-
lation, the type of crop, and other local conditions.**
The top level of the present-day commune has little to do with
either the planning or the execution of agricultural policy. Important
decisions on matters such as land use are made primarily by the county
(hsien) government -- the level of authority next above the commune --
on the basis of broad state directives from above and detailed plans
supplied by the brigade from below. Execution of decisions on produc-
tion is the responsibility of brigades and teams, the role of the top
commune level being confined to the general supervision of performance
by the brigades and teams. Apart from this function, at the top level
of nearly every commune are found the office of the commune Party com-
mittee; a branch of the Peoples Bank; a general store; state tax and
grain collection units; a clinic; an agrarian research institute; a
junior middle school; a farm tool manufacture and repair station; and
such enterprises as a flour mill, a tailor shop, and a breeding farm.
A few communes have machine-tractor stations.
** For example, in densely populated Kwangtung Province the average
brigade has 40o households compared with the nationwide average of
240 households. Many refugees from Kwangtung have reported that they
belonged to outsize brigades with more than 1,000 households. Action
reportedly has been taken to break up some of these larger brigades
into smaller units.
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The production brigade, the next lower level, is the key collec-
tive unit for planning production and distributing income. Brigades are
said to own 80 to 90 percent of all farm implements and draft animals.
Equipment under the direct management of the brigade includes power,
irrigation, threshing, and transport equipment. In addition, brigades
operate miscellaneous enterprises, such as blacksmith shops, hog farms,
and fisheries, which under current rules are authorized to employ no
more than 3 percent of the rural labor supply. The typical brigade is
run by a management committee that is staffed by 10 to 15 officials
who in most cases also are members of a branch of the commune Party
committee. The typical brigade also has one primary school.
The production team, the lowest level of the commune, is the op-
erational unit and works under a contract signed with the brigade. A
team is headed by two or three officials, at least one of whom is a
Party member. Each team has a messhall, provisioned by the brigade,
and usually a nursery and a kindergarten.
B. Urban Communes
The urban commune in Communist China is a far more shadowy
organization than its rural counterpart. Eventually, according to
Chinese Communist ideology, cities will be transformed into ideal com-
munal units, but meanwhile application of the concept has been limited
to the freeing of housewives from household tasks for other work.
In the hectic days of 1958, confused efforts were made and then
dropped to introduce urban communes, and not until the spring of 1960
was the concept revitalized and introduced on a wide scale. The scope
of the campaign was nationwide except that Shanghai, the largest and
most cosmopolitan city in Communist China, was exempted from participa-
tion in the movement. When an urban commune was formed, it set up or
expanded messhalls, nurseries, kindergartens, and neighborhood service
centers that provided such services as mending and washing clothes and
cleaning houses. Then all adult urban dwellers who were not already
working for state enterprises -- mostly housewives plus a few peddlers
and handicraft workers -- were put to work in large numbers of small
commune industrial enterprises.
No figures on urban communes have been released since August
1960, when it was stated that 52 million urban residents were enrolled
in 1,027 communes. There is ample evidence, however, that the movement
has bogged down. Peking clearly became dissatisfied with the inef-
ficiency and high cost of operation of many commune enterprises and
after August 1960 adopted several restrictive measures. For example,
many enterprises were getting subsidies and paying little or no taxes,
and a stop to this favored treatment was ordered.11/ Most new commune
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enterprises at first were engaged in subcontracting work for state-
owned enterprises, but this activity was curtailed when it became appar-
ent that quality control was difficult to maintain. Commune industry
was reminded repeatedly that its main tasks were to produce mall items
for consumption (like buttons, pots, pans, and shoes) and to engage in
repair and service work -- the traditional functions of the handicraft
sector. The urban handicraft sector had been curtailed sharply in
1958, when most of its labor force was transferred to state-owned enter-
prises for work in heavy industry and construction.
Policies, January 1960 Through July 1961
A. Radical Policy, First Half of 1960
In the period 1958 through mid-1960 the Chinese Communist
leadership was in a radical mood, believing that rapid economic gains
were attainable by means of crash programs carried out under close
Party direction. Although by early 1960 the Chinese had moderated
their general policy by dropping such ill-conceived programs as the
backyard steel furnaces and the overcentralized features of the rural
commune, it was apparent from the new programs adopted for 1960 that
the "leap forward" approach was still being followed.
In rural areas early in 1960 the approach led to a reckless
expansion of activities (other than the cultivation of crops) in dis-
regard of cost and usefulness of the effort expended. Communes and
brigades assigned 10 million men, or nearly 5 percent of the rural
labor force, to the drive to expand collective raising of hogs in the
busy agricultural month of May 1960. Insufficient feed and poor sani-
tary conditions caused the death of many collectively raised hogs later
in the year. The labor force of commune industry was expanded from
5 million men at the end of 1959 to 9 million in the spring of 1960.
The additional labor force was used largely to manufacture new and
untested items of farm machinery, such as rice transplanters, millions
of which were made before they proved to be impractical. A vast amount
of rural construction work on water control projects, rural roads, and
terracing of hills was performed, and most of this work was hastily
planned and apparently was of slight value. This stress on collective
activities occurred at the expense of private economic activities,
such as the cultivation of private plots and the private raising of
hogs -- sideline activities that normally are important sources of sup-
plementary income to the peasant.
In urban areas, Peking's radical mood found an outlet in the
campaign to revive urban communes. Another radical activity, affecting
both rural and urban areas, was the largely wasteful campaign to en-
courage the masses of ordinary farmers and workers to invent new tools
and devise new methods of production.
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In the second quarter of 1960 the Chinese Communists were still
driving ahead on radical programs in both the cities and the countryside.
Then two unexpected difficulties occurred -- a very poor wheat harvest
in June 1960 and the sudden decision by Moscow in July to recall the
2,000 to 3,000 Soviet industrial technicians in China. These difficul-
ties forced the regime to make a critical appraisal of the entire eco-
nomic situation, an appraisal that exposed the existence of a third
major problem -- disruptions resulting from "leap forward" excesses.
After more than 2 years of "letting politics command economics,"
Peking discovered that deferred maintenance was shortening the life
of machinery, that standards of quality in production had dropped,
that methods of production in agriculture and industry generally were
wastefUll and that the statistical organization and the planning system
were impaired.
B. Moderate Policy, Second Half of 1960 and First Seven Months
of 1961
Under the pressure of all its economic difficulties, Peking
during the second half of 1960 abandoned or drastically modified almost
all of the economic policies introduced in the "leap forward" period.*
The general effect of changes in policy adopted in the country-
side after June 1960 was to cause a gradual return to the policy pre-
vailing before 1958. The major reversals in rural policy were codified
and endorsed by the Central Committee of the Chinese Communist Party,
the top policymaking body in China, in a resolution issued on 3 Novem-
ber 1960 and called a "12-point resolution on rural communes." 2/ This
resolution was the first major Party review of policy on rural communes
undertaken since August 1959, when the system of three-level ownership
was announced. The resolution of November 1960 was given little pub-
licity and apparently was issued primarily to assure rank-and-file
Party officials that the top leadership was serious this time in wanting
to reverse policy, the effect of the moderating measures ordered in 1959
having been lessened by a concurrent campaign against conservative offi-
cials.
The text of the 12-point resolution was not published, but its
probable contents may be reconstructed from discussions of individual
policies in the Chinese Communist press
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dence indicates that Peking was trying to accomplish four objectives:
(1) to encourage a limited increase in private economic activity;
* The effect of these changes on urban communes is described in 1,
B1 p. 4, above. The effect on rural communes and rural policies is
the subject of the rest of this section.
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(2) to reduce peasant unrest; (3) to overhaul finances, curtail waste-
ful investment, and cut costs of collective farm units; and (4) to im-
prove farming methods and management practices. Many specific rules
and regulations were issued to achieve these four objectives, and refu-
gees generally have confirmed that the new rules were seriously carried
out.
1. Limited Revival of Private Peasant Activity
A major policy change after mid-1960 was the decision to
encourage a limited revival of private peasant activity. This revival
was desired partly because the regime was beginning to recognize that
the collective sector was less effective than the private sector in
some sideline activities such as the raising of hogs. In addition, the
regime hoped to allay popular discontent by restoring a measure of indi-
vidual freedom to peasants.*
To encourage private activity, the regime put into effect
many measures to provide the peasant with genuine incentives to grow
vegetables, raise chickens and hogs, and make handicraft items, all on
his own initiative. The most important measures were the reassignment
of small private plots of land and the reopening of rural trade fairs.
In addition, collective units agreed to provide seed and small pigs to
individuals, not to requisition manure from the household cesspool, and
to leave peasants enough spare time to work on their own.
soon after the fall harvests of 1960 50X1
the regime began to reallot private plots to peasants, to be used as
they desired. Private plots are small, usually less than one-twentieth
of an acre, and probably make up only 1 to 2 percent of the land under
cultivation. Their importance is out of proportion to their size, how-
ever, because they receive careful attention and because substantial
quantities of vegetables and fodder crops are grown on them.
During December 1960 the regime ordered the reopening of
rural trade fairs throughout the country in order to restore a con-
venient market outlet for the produce of the peasant. The fairs are
held about once a week. Buyers include other peasants, visitors from
nearby urban centers, and state commercial units. Numerous restric-
tions have been set up to prevent the resurgence of "capitalist tend-
encies." No individual is allowed to buy for resale. No trade is
permitted in "Category 1" commodities -- staples like rice, wheat,
and beans. Trade in "Category 2" commodities, which include pigs and
eggs, is permitted only after a state procurement quota has been met.
"Category 3" items, which may be traded freely, include such items as
* See 2, p. 8, below.
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herbs, firewood, and woven baskets. All sellers must buy a license
and carry a certificate from their brigade authorizing them to sell
their produce. The trade fairs are carefully policed by "market con-
trol committees," and in spite of controls and restrictions the fairs
apparently have flourished.
Private activity is often an important source of cash income
to the peasant household, although it probably accounts for less than
20 percent of the total income in both cash and kind.
2. Efforts to Placate the Peasantry
In giving the peasant more freedom the regime also hoped
to reduce peasant unrest after 3 years of overwork and 2 years of
undereating. Additional measures adopted to achieve this purpose in-
cluded efforts to ease rural food shortages and instructions to Party
officials and militia to cease maltreating peasants, to ease the driv-
ing workpace, to compensate peasants for property confiscated in 1958,
to stop withholding wages in the form of forced deposits, and to alle-
viate individual cases of extreme malnutrition. To ease rural food
shortages, the regime took extraordinary action to reduce the obliga-
tion of rural areas to feed the cities and supply foodgrain for export.
For example, the regime reduced urban food rations by 10 to 15 percent,
greatly reduced exports of foodstuffs) and purchased large quantities
of foodgrain from abroad. In spite of such measures, widespread mal-
nutrition and food shortages developed in the countryside early in
1961. Collective officials were told in the late summer of 1960 to stop
requiring night work and to give adult males at least 2 days vacation a
month and females 4 days, and later in the winter the vacation rule was
liberalized to 4 days for men and 6 for women. Low-level officials
became noticeably more polite after October 1960, according to refu-
gees, and militiamen were ordered not to use violence against farmers
caught stealing foodstuffs. To please the peasantry further, Peking
instructed collective farms to compensate peasants for houses, tools,
and animals confiscated during the commune movement of 1958. Because,
officials had made a similar promise early in 1959 but had taken no
action, peasants were pleasantly surprised this time when they actually
received money. Brigades made these payments out of reserve funds,
which normally are reserved for new investment.
Brigades also were told to stop withholding wages in the
form of forced deposits. Previously, under pressure to build hog farms
and buy large quantities of new tools and construction materials) many
brigades had spent funds that should have been distributed to peasants.
From various activities, both collective and private, the average peas-
ant in 1960/61 received more cash income than in 1959/60, but there was
a shortage of the goods that he wanted most to buy -- food and clothing.
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He probably spent most of his additional income to buy handicraft articles
or food items sold at very high prices in the free rural markets, or he
put it in savings.
Hungry peasants had been promised late in 1960 that food rations
would be increased, but this promise was one that the authorities were
not able to fulfill. by April 1961 50X1
supplementary rations and medical treatment were being provided to alle-
viate severe cases of malnutrition and that by July 1961 the first har-
vests of the year had led to a general easing of the food shortage.
3. Financial and Investment Policies
In November 1960 the regime promulgated relatively conserva-
tive financial rules for communes and brigades. These rules had a double
purpose -- to ensure that collective farms had no funds to continue "leap
forward" policies and that peasant welfare would be given more considera-
tion in the 1960/61 year. The regulations were first publicized in mid-
November 1960 in the Party journal Red Flag, which summarized them as
"the policy of keeping less and distributing more and the policy of dis-
tributing less by the free supply system than by the wage system."
The "free supply systee is the name given to the system of
distributing foodstuffs communally through the messhall the decision to
reduce the amount of "free supply' marking a further retreat from the
original commune concept. In 1959 the rule had been to distribute 30 to
40 percent of disposable income in the form of "free supply." In November
1960, brigades were told to keep "free supply' below 30 percent in order
to maximize the amount distributed directly to peasants according to their
workpoints. The effect in a poor year was to reduce the amount of food
available for "free" distribution by the messhall and to weaken the mess-
hall system.
The new financial policy for communes reversed the usual pri-
orities followed in Communist China for investment and consumption and
ordered that consumption come first. When distributing gross income,
brigades were told to see that at least 90 percent of commune members
received an increase in income. The proportion\of gross income dis-
tributed for consumption was to be 65 percent in "normal" areas and more
if natural calamities had occurred. The official standard previously
had been 60 percent, and apparently it had fallen to 55 percent in the
1959/60 year, when brigades and communes were under great pressure to
increase investment and production expenditures.
Tight controls over production costs were reimposed. For
example, one brigade cited by Peking had spent 34.5 and 35 percent of
its gross income in 1958 and 1959, respectively, on such production
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items as seed, feed, repair of tools and equipment, and purchase of
insecticides and fertilizer. After reducing the seeding rate and
eliminating all possible waste, this brigade allegedly cut production
costs to 19 percent of gross income. In Kwangtung Province in October
1960 the provincial Party committee recommended that brigades cut the
seeding rate in half, back to the traditional rate, and reduce produc-
tion costs to a level less than 20 to 25 percent of gross income. 2/
Brigades were told to regard investment activities as a
residual claimant on gross income. The allocation to the. reserve fund
for investment was cut to 5 percent of gross income compared with about
10 percent in 1958/59 and 1959/60. The brigades were advised that it
was not necessary to maintain any certain level of investment but,
rather, that investment should be larger in a year of abundance and
less in an ordinary year.
A comparison of estimates of the main uses of income of
collective farms in 1956/57, 1959/60, and 1960/61 is presented below:
Percent
Allocations 1956/57 1959/60 1960/61
Consumptions ("free supply"
and wages in cash and kind) 60 55 65
Production costs 25 30 25
Reserve fund 8 lo 5
Taxes 7 5 5
Gross income
100 100 100
The ability of communes (including brigades) to finance in-
vestment in 1960/61 must have declined sharply. Communes not only re-
duced allocations for the reserve fund but also spent funds previously
accumulated for investment purposes to compensate peasants for property
confiscated in 1958. State subsidies andloans were an important source
of investment funds in 1958/59 and 1959/60. Their amount for 1960/61 is
unknown, but probably, in line with state policy discouraging unnecessary
investment, they were no larger than in previous years.
Brigades also were told to lower investment expenditures by
requiring commune members to buy their own simple farm tools. If
peasants were too poor to buy tools, brigades were advised to go ahead
and procure tools for commune members, while deducting the expenses
incurred from the wages of the commune members concerned. Although
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Communist doctrine insists that means of production be owned by the
collective or the state, Peking adopted this new rule on the sensible
grounds that peasants would take better care of their own tools than of
collectively owned tools.
The paradox of the attempt to give agriculture higher pri-
ority while rural investment is reduced can be explained by the reck-
lessness and ineffectiveness of much of the investment carried out in
1959/60. Communes and brigades were then compelled to buy huge quan-
tities of tools and implements that were often unneeded, build hog farms
that were later abandoned, and carry out extensive construction work
(such as irrigation ditches, roads, and hillside terraces) that was
hastily planned and frequently of little immediate value. The regime
in 1960/61 apparently decided that a first step in rationalizing agri-
cultural production methods was to discontinue all projects except those
of proved effectiveness in increasing production. It then hoped to make
a fresh start on developing sound plans that took local conditions into
account. Under this more rational approach, investment opportunities
would be small at the beginning (while the emphasis was on planning and
preparations) and would increase gradually, for example, as effective
techniques for using new tools and building irrigation projects were
worked out.
4. Labor and Management Policies
Drastic changes also occurred in management policy affecting
all rural production -- that is, production in commune industry, culti-
vation of crops, and other agricultural activities. These changes were
brought about by curtailing commune industry, collective hog farms, and
construction activities; reassigning the labor released from these ac-
tivities back to the production teams to work in the fields; discontinu-
ing almost all of the superintensive farming methods introduced in the
1958-60 period; and allowing peasants and team officials more responsi-
bility for deciding how to grow crops.
a. Curtailment of Activities Other Than Cultivation of Crops
(1) Rural Construction
The new approach to rural construction was announced
by Peking in November 1960, when the regime declared that in the coming
winter "rural areas would spend much less manpower on such capital con-
struction tasks as building water conservancy works and leveling farm-
land as compared with the previous two years." _9./ It was added that
peasants released from this activity were to be either put to work in
the fields or allowed to engage in sideline production of their own.
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In the previous winter of 1959/60, according to Peking, there were
77 million peasants (or one-third of the rural labor force) working on
water conservancy projects.
Peking elaborated the new policy in December 1960
in a directive specifying that water conservancy projects sponsored by
the state and top level of the commune rely primarily on specialized
mechanized construction teams rather than on ordinary peasants and that
work performed inside brigades and teams such as digging ditches and
leveling terraces should be restricted to projects that would yield
profits in the same year.
(2) Collective Hog Farms
The intensive campaign by collective units to expand
hog raising collapsed in mid-season. As early as July 1960 the People's
Daily was admitting that the campaign had "not produced the desired re-
sults." 12/ The reasons given were (a) lack of managerial experience in
large-scale hog farming, (b) inadequacy of fodder, and (c) unsanitary
conditions that caused high death losses in crowded pens. Subsequent
statements confirm that the regime has ordered collectives to leave the
raising of hogs, for the most part, to individual households. 11/ Present
policy is to make small pigs available to peasants at cheap prices, allow
peasants to grow fodder and to take the time necessary for the care of
their private plots and pigs, offer fair prices for pork and hog manure,
and give meat ration coupons equivalent to a percentage of the pork de-
livered to the state.
As yet there has been no indication of the extent to
which this shift in emphasis will affect the planned production of hogs
or the ratio between hogs raised collectively and privately.* The shift,
however, should stimulate production, although some peasants may be slow
in responding to the new incentive measures. Recalling past vacillation
in this regard, many probably will adopt a wait-and-see attitude out of
fear that they will not be adequately compensated for the labor and other
costs expended.
(3) Commune Industry and Other Undertakings
at the Commune Level
Curtailment of industry and sideline agricultural
undertakings, such as fish hatcheries and tree nurseries, at the commune
level became drastic late in 1960. According to Peking, the number of
* The most recent figures available are for 1959, when, according to
Peking, the inventory of hogs reached 180 million (an unbelievable "leap
forward" claim), 70 percent of which, it was claimed, were raised col-
lectively.
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workers employed in full-time industrial enterprises at the commune
level swelled from 5 million men (about 2 percent of the rural labor
force) at the end of 1959 to nearly 9 million men (about 3.5 percent of
the rural labor force) in the first half of 1960. In September 1960,
Chinese Communist newspapers were instructing that all undertakings at
the commune level, except a "very small number," should discontinue
full-time operations and either disband altogether or operate on a
seasonal basis. 12/ In mid-April 1961, Red Flag recommended that full-
time undertakings of all types at the commune level employ only 2 per-
cent of the rural labor force. This quota covered not only indus-
trial enterprises but also such undertakings as breeding farms, fish
hatcheries, tree nurseries, experimental farm plots, stores, and special
transport units. The number available for commune industry alone was
not specified but would have been substantially less than the 5 million
employed at the end of 1959. It seems likely that, in most of China,
industrial enterprises now run by rural communes resemble in size and
scope the handicraft producers cooperatives that existed at the township
level before 1958.
b. Reassignment of Labor Back to Farm Work
According to the I March 1961 issue of Red Flag, more
than 20 million laborers had been shifted to the "first-Yin-77f agri-
culture since the fall of 1960.* Although the combined effect of this
transfer and the cessation of superintensive "leap forward" methods of
agriculture should have left agriculture with an ample labor supply, the
Chinese Communists still claim that a shortage exists and that further
reallocation of labor is necessary. It is unclear whether the Chinese
genuinely believe that a shortage exists or whether they merely recognize
that no alternative opportunity for employment exists for unskilled
peasant labor.
In allocating rural labor, rural officials have been
told to assign about 95 percent of rural labor to production teams and
to mske sure that during the busy farm seasons at least 80 percent of
production team workers are assigned to field work. 2__Y
c. Discontinuation of Superintensive Farming Methods
In the period 1958 through June 1960 the regime intro-
duced with great fanfare a series of superintensive farming methods that
were called Mao's "eight-point charter." The eight points were soil
* In Kwangtung Province, for example, the official response to this
problem was to send nearly 2.2 million workers to the "first line" of
agriculture. Among them were 239,000 from state-owned enterprises,
190,000 idle laborers in towns, and 1,735,000 from various activities
within communes.
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improvement, manuring, irrigation, the use of good seed strains, close
planting, plant protection, field management (including deep plowing),
and the use of improved implements. These were applied on a nationwide
scale by huge numbers of political officials who were overzealous and
gave little heed to local conditions or the need for prior testing on a
rational basis. Therefore, in spite of the expenditure of tremendous
amounts of labor and of additional amounts of grain to maintain the new
high seeding rate, these efforts were largely wasted. By the fall of
1960 the entire body of new methods had been quietly abandoned, and col-
lective units were being advised to go back to traditional methods and
traditional seeding rates.
d. Delegation of Responsibility to Production Teams
In the fall of 1960 the Chinese Communists adopted meas-
ures to give the production team a greater sense of identity, more re-
sponsibility for management of cultivation work, and an incentive to work
harder. 12/ First, brigades were ordered to stabilize the boundaries
and personnel of teams and make fixed assignments of draft animals and
farm tools to teams, an action called the "four fixes." Then brigades
were supposed to make firm production contracts with teams, called the
"three guarantees and one reward." Under this contract, each team guar-
antees to meet production quotas, and on its part the brigade guarantees
to leave the teams a specified amount of manpower and to supply a fixed
sum of money and materials to meet production costs. The brigade also
is supposed to leave teams free to determine their own farming techniques
as long as they carry out sowing assignments and meet production quotas.
In theory, teams that exceed production quotas are entitled to a portion
of the excess under a complicated formula -- this is the "one reward."
Teams also are permitted to engage in certain sideline activities, such
as raising livestock and breeding fish, outside its contract with the
brigade. According to the regulations, only a small portion of the pro-
ceeds from such sideline activities has to be turned in to the brigade.
It is official policy to encourage competition among teams.
The regime has admitted that the same general rules on
the team-brigade relationship were on the books in 1959/60 but generally
were ignored. In 1960/611.however, commune and brigade officials were
told to treat the rules more seriously, and scattered reports by refugees
indicate that; as far as production decisions are concerned, teams were
in fact given considerable freedom. Nevertheless, frequent repetition
in Chinese Communist propaganda of the theme "respect the authority of
the production team" suggests that division of authority probably remains
confused to the detriment, of efficient management. Confusion could result
either because brigade officials are unwilling to give up authority to
make production decisions or because they are uncertain how much authority
to delegate and how much to retain.
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Brigades are still charged, insofar as is known, with
the primary responsibility for determining specific sowing plans and
production quotas. Moreover, the brigade, with its control of the
purse strings, continues to supply grain for seed and feed, tools,
fertilizer, insecticides, and other production materials, largely ac-
cording to its judgment of team requirements. But if some brigades
have been unwilling to delegate much responsibility, others would
appear to have gone to the other extreme and delegated the day-to-day
responsibility for operating a given plot of land to individual house-
holds or small groups of households. Travelers arriving in Hong Kong
from the north report that it is again common to see peasants working
in the fields in small groups, as opposed to the great assemblages that
characterized the early years of the commune.
III. Outlook*
What the Chinese Communists need most is a year of good agricultural
weather. They nevertheless stand to gain important political and eco-
nomic benefits from their new rural policies. Refugees leaving the
mainland late in the spring of 1961 reported that peasants generally
were pleased that past errors were being corrected, although believing
that the mistakes should not have been committed in the first place.
The morale of low-level Party officials should rise with the increased
delegation of authority to them. By reducing the amount of arbitrary
"guidance" from above, the authorities have created a better climate in
the collectives for improving farming methods according to local re-
quirements.
How long such an improved atmosphere will last is uncertain, however,
because collectivized agriculture in Communist China has been character-
ized by instability in policy and inefficiency in performance. To the
difficulties associated with doctrinaire policies of collectivization
must be added such basic difficulties as shortage of arable land, high
cost of reclRmation, widespread illiteracy, and periodic flood and
drought. As a result, the long-run task of increasing total production
and production per worker in Chinese agriculture will be at best a com-
plex and lengthy process.
A. Instability
The Chinese Communist Party (CCP) remains strongly committed to
the concept of the rural commune in spite of its shortcomings. Liu
Shao-chil number two man in the hierarchy, reaffirmed this commitment
* The discussion in this section centers on the outlook for the rural
commune. The urban commune is not expected to play an important role
in the next year or two.
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in a speech on 1 July 1961 commemorating the 40th anniversary of the
CCP. lg Although defending the commune, Liu also indicated dissat-
isfaction with it. He said that the commune "should be placed on a
sound footing and consolidated and [that] the superiority of the people's
commune system in promoting agricultural production should be brought
into full play." That further changes in commune organization are con-
templated was admitted by Foreign Minister Chen Yl in March 1961 to a
Hungarian newsman, as follows:
Communes are very young organizations, and we have
not yet gained sufficient experience with them ... .
We must make changes in their internsl organization,
but the principle of the people's commune is right, and
we do not want to make changes in this regard. 12/
In domestic propaganda the Chinese Communists have stressed the
stability, not the instability, of the present-day commune. They have
promised, for example, that ownership rights of the production brigade
will not be touched for at least 5 years. 1.111/ Probably few Chinese put
much faith in such promises, however, because the brief history of
socialized agriculture in China has often been marked by the adoption
of radical changes soon after reassurances were given against their
adoption. For example, the First Five Year Plan proposal promised that
collectivization would be gradual, but this proposal was published in
July 1955, a few weeks before an all-out drive began to gather all
peasants into agricultural producers cooperatives, which soon came to
resemble Soviet collectives. A year before communes were formed, in
September 1957, the CCP directed that cooperatives be reduced in size
to just over 100 households (for reasons of efficiency) and that no
change thereafter be made for 10 years. 1
The Chinese Communists tend to exaggerate the size of agricul-
tural problems and successes and typically have overreacted to them.
This manic-depressive tendency partly accounts for the wings that have
occurred from radical to cautious policies. After the poor 1960 har-
vests the regime relaxed its guidance over agricultural production
matters, but it may resume radical policies after the next one or two
bumper harvests. The leaders probably have not yet learned the one
lesson of the commune movement -- that tight central control can com-
pound difficulties in the agricultural sector. Disaster may force the
leaders to admit that mistakes have been made, but they seem convinced
that the solution lies not in getting along with few controls but in
devising correct ones. Thus they talk about reorganizing the commune
but not abandoning it. Mao's belief in the need for tight controls was
expressed in October 1960 as follows:
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In order to prevent mistakes and ensure orderly
progress, it is essential that the Chinese people
follow a very narrow line for the foreseeable future
and that, regrettable as it might be, a great number
of people would have to do the same thing at the same
time and according to a prescribed formula.
The next drive to accelerated agricultural production is not ex-
pected to repeat past mistakes automatically and almost certainly will
stop short of the excesses practiced in 1958. However, the general
pattern of radical periods in the past (such as 1956 and 1958-60) may
be followed. In these radical periods, collective controls over the
peasant have been strengthened at the expense of the private sector of
the economy. The Party apparatus has been mobilized throughout the
country to institute new policies, such as raising hogs or using new
cultivation tools, which mielt be profitable if introduced gradually
and practiced in moderation but which usually have been carried out to
excess.
Until the next drive the current set of relatively moderate
policies may prevail with little change, although there are additional
moderate measures that the Chinese Communists may adopt while still
staying within the framework of socialized agriculture. They may permit
a further enlargement of the private sector, which is still small by
Soviet standards. They may reduce the number of officials assigned to
production units from the outside and give more responsibility to local
peasants. They may reduce the size of production brigades, which now
average 240 households. As noted above, in 1957 the CCP decided that
the optimum size of cooperatives under "present conditions" was a few
more than 100 households. It stated then that exceptions should be
allowed only for "a few big cooperatives which are really run with
success." A final, though less likely, possibility would be the aban-
donment of the messhall and the "free supply" of staple grain.
B. Inefficiency
Socialized agriculture in Communist China has certain inherent
inefficiencies, some of which are characteristic of Soviet agriculture
also. At all times, whether the policy line is hard or soft, direction
over agricultural production is exercised through a huge Party apparatus
made up of officials selected mainly for political qualifications rather
than technical and managerial skills. The Chinese regime tends to think
in terms of organizational solutions first and technical solutions second.
This order of priority was described in a typical article that appeared
in a Peking newspaper in February 1961. The article declared that the
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development of agriculture involves two problems: the first is that of
"production relations," which (it said) is to be solved by faithfUlly
following Party policies on communes, and the second concerns "produc-
tivity," which is to be solved by economizing labor and mechanizing
agriculture. 22/ Late in 1960, when the regime reaffirmed its promise
to give agriculture higher priority, the chief measure adopted was to
assign large numbers of additional officials to work teams.
In Communist China, as in the USSR, new methods that show promise
in selective areas often are mechanically applied on a wide scale with
little regard to local conditions, and such methods may do more harm than
good.
Even though the highly wasteful labor-intensive projects of the
"leap forward" have been discontinued, the regime apparently still be-
lieves that a labor shortage* exists. In a country where there is barely
1 hectare (2.)-71 acres) of farmland for each peasant household, this
belief is either a delusion or an acknowledgement that the organization
of labor for farmwork is incredibly inefficient. A direct result of
this belief is that current efforts to modernize agriculture emphasize
unduly the development of labor-saving machinery and give insufficient
stress to measures, such as producing or importing more chemical ferti-
lizer, that increase the yield per acre.
C. Prospects of Success
There are two factors that favor agricultural development in Com-
munist China: (1) modern technology is creating an increasing variety
of possibilities for increasing agricultural production, and (2) the
regime since 1959 has seemed willing to assign higher priority to agri-
culture in the allocation of manpower and materials. Given moderately
efficient agricultural institutions and average weather, the prospects
for agriculture over the next few years should be sufficiently good to
provide a slowly increasing supply of foodstuffs per capita for the
rapidly growing population. The Communist system of control, however,
with its elements of politics, prejudices of leadership, and dogma, will
complicate the difficulties of effectively applying resources and modern
technology to Chinese agricultural conditions.
* "Leap forward" policies tended to create "labor shortages" by over-
committing the labor force for various mobilization programs. There is,
of course, no labor shortage in China in the sense of too few workers
per unit of land or per unit of capital.
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