What was the household contract responsibility system with remuneration linked to output all about
The formation of the farmland contract management right system
1. The establishment of the household contract system
The Third Plenary Session of the Eleventh Central Committee of the Communist Party of China opened the curtain on our country's reform and opening up, and the reform of the rural land contract system became the forerunner. This institutional change, which had a major impact on the fate of several hundred million farmers and even the entire country, first began in impoverished areas, later won the approval of reform-minded local and central leaders, and then, through policy promotion, became widespread throughout the country, and was finally institutionally established through law.
In September 1980, the Central Committee of the Communist Party of China issued the notice "Several Issues Concerning Further Strengthening and Improving the Agricultural Production Responsibility System." Constrained by the institutional environment and ideology at the time, it could only emphasize that “the collective economy is the unshakable foundation for our country's agriculture to advance toward modernization,” while at the same time requiring that “proceeding from actual needs and actual conditions, multiple forms of operation, multiple forms of labor organization, and multiple methods of remuneration should be allowed to exist simultaneously.” As for fixing output quotas to households (including fixing output quotas to households with full responsibility for profits and losses), differentiated treatment could only be adopted, mainly limited to production teams in remote mountainous areas and poor and backward areas that had long “relied on resold grain for food, loans for production, and relief for living,” and where the masses had lost confidence in the collective.
By 1982, policymakers were more determined to carry out reform, and that year's No. 1 document was devoted specifically to the issue of the agricultural production responsibility system. While emphasizing that “our country's agriculture must adhere to the path of socialist collectivization, and the public ownership of basic means of production such as land is unchanged for the long term,” this document also clearly stated that “the collective economy must establish a production responsibility system, and this too is unchanged for the long term.” It clearly affirmed that the household-based operation with full responsibility for profits and losses, in which households operate separately and are responsible for their own profits and losses, is built on the foundation of public ownership of land. Farmers and the collective maintain a contracting relationship, which is different from the small private individual economy before cooperativization and is a component of the socialist agricultural economy. It theoretically demonstrated the relationship between the agricultural production responsibility system and mainstream ideology, removing the obstruction of ideology to the reform of the household responsibility system.
In 1983, the Central Committee of the Communist Party of China issued "Several Issues Concerning Current Rural Economic Policy," which comprehensively demonstrated the rationality of the household contract responsibility system with remuneration linked to output: “It takes households or small groups as contracting units, expands farmers' autonomy, gives play to the strengths of small-scale operation, overcomes the drawbacks of excessive concentration of management, labor ‘mass shouting’ and egalitarianism, and at the same time inherits the positive achievements of past cooperativization, adheres to the public ownership of basic means of production such as land and certain functions of unified operation, and enables the newly formed productive forces over many years to play a better role. This mode of operation, which combines decentralized operation with unified operation, has broad adaptability. It can adapt both to the current situation in which manual labor is predominant and to the characteristics of agricultural production, and can also adapt to the needs of the development of productive forces in the process of agricultural modernization. Under this mode of operation, household operation with contracting by household is merely one operational level within the cooperative economy, and is a new type of household economy. It is essentially different from the small private individual economy of the past and should not be conflated with it.” From then on, the debate among decision-makers over the basic rural system came to an end, and the household contract responsibility system with remuneration linked to output became widespread throughout the country. By the end of 1984, 99% of production teams and 96.6% of farming households nationwide had implemented fixing output quotas to households with full responsibility for profits and losses.
2. The formation of the rights system of the household contract system
With the establishment of the household contract system for farmland, the policy orientation in rural institutions was mainly devoted to making farmland contract management rights real rights, long-term, legalized, and institutionalized.
First, continuously extending the land contract period and stabilizing the relationship between farmers and land. The No. 1 document on central rural work in 1984 proposed that “the land contract period should be extended, farmers should be encouraged to increase investment, cultivate soil fertility, and implement intensive management. The land contract period should generally be more than fifteen years.” During the second round of contracting in the early and mid-1990s, the farmland contract management period was extended to thirty years. The Third Plenary Session of the Seventeenth Central Committee in 2008 proposed that “the existing relationship between land and contracting should be stabilized and kept unchanged for the long term.”
Second, establishing the household contract system as our country's basic rural economic system. In 1991, the Central Committee of the Communist Party of China's "Decision on Further Strengthening Agricultural and Rural Work" for the first time proposed that “the responsibility system based mainly on household contract responsibility with remuneration linked to output and the two-tier management system combining unified and separate management should be stabilized for the long term as a basic system of our country's rural collective economic organizations, and should be continuously enriched and improved.” In 1993, the Central Committee of the Communist Party of China and the State Council's "Several Policy Measures Concerning Current Agricultural and Rural Economic Development" and the Third Plenary Session of the Fifteenth Central Committee in 1998 further emphasized this. In 1999, the "Constitution" clearly stated that “rural collective economic organizations implement the two-tier management system based on household contract management and combining unified and separate management.” In 2002, the "Rural Land Contract Law" clearly stated that “the state implements the rural land contract management system.” In 2003, the Third Plenary Session of the Sixteenth Central Committee strengthened this formulation even further: “household contract management of land is the core of the basic rural management system.” In 2007, the "Property Law" provided that “rural collective economic organizations implement the two-tier management system based on household contract management and combining unified and separate management. Cultivated land, forest land, grassland, and other land used for agriculture owned by farmers' collectives and owned by the state but used by farmers' collectives shall implement the land contract management system in accordance with law.”
When this system had been continuously questioned in recent years, the Third Plenary Session of the Seventeenth Central Committee in 2008 gave very clear and full affirmation of the status and role of this system: “The two-tier management system based on household contract management and combining unified and separate management is the basic rural management system that adapts to the socialist market economy system and conforms to the characteristics of agricultural production. It is the cornerstone of the Party's rural policy and must be upheld unswervingly.”