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Household contract responsibility system

(Reform and Opening Up)

Updated:2018-10-29 |

Household contract responsibility system

The household contract responsibility system with income linked to output, commonly known as “an all-round contract,” allowed farming households to contract with the collective economic organizations, whereby the means of production still belonged to the collectives and the farming is operated by individual families in the principle “to each according to his work.” The collectives and the households thus played different roles in production and operations.

A creation by Chinese farmers, the system was adopted as an effective reform measure on Chinese mainland in the early 1980s. It was a turning point in China’s rural land system and an outcome of its rural economic structural reform. Rural reform, with “farm output quotas fixed by household” as a basic principle, began China’s campaign of internal reform.

Xiaogang Village in Fengyang County, Anhui Province, was the first to voluntarily break through the old institutional barriers and allot farm output quotas to individual households. In November 1978, 18 of its households signed a contract that would entrust the farmland owned by the village collective to individual households who would take full responsibility for their profits and losses. This opened the way for what was later called “household contract responsibility system.” Similar approaches were practiced in Sichuan and some other provinces, thus ushering in China’s era of rural reform.

The system was formally confirmed in the national rural work meeting minutes, a document endorsed by the CPC Central Committee in 1982. With the support of the central authorities, the practice soon spread across the country, and by early 1993, 93 percent of rural production teams had adopted it.

The system encouraged the productive output of individual farmers while maintaining unified collective operation. It was applicable to both scattered small operations and relatively centralized operations of moderate scale. Rural labor productivity increased, the rural economy developed, and the standards of living of farmers improved. The household contract responsibility system has proven well-suited to Chinese agriculture, rural productive forces, and land management.