Rural Economic Reform
· 40
6.
In 1978, it was
difficulties.
economic reform in the rural areas as its first priority.
recognized that more than 200
million people in the rural areas still confronted great
Consequently, the Government started
7.
peoples
First, it had been concluded that the system of
communes, which resulted in relatively low levels
of production, was not the most
present situation.
appropriate for the
Consequently, the present contract
system between the state and farmers was established.
Between 1978 and 1984, there was great progress in
agricultural production, and China became self-sufficient
in grain supply.
there were moves to develop both
8.
Secondly,
planned
certain
and free markets.
free to
as
a
After farmers had sold a
percentage of, say, grain to the state, they were
sell their own products on the free market and,
consequence, were given greater incentives.
However, in such a huge country as China, planning had to
exist if
problems were not to result. It was necessary
for the Government
to
give overall guidance regarding
but,
within this framework, the
to
produce.
The city government
agricultural production
farmers had freedom
would draft contracts
in the autumn with the farmers
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