In 1949, China's grain output was 113.18 million tons, and that of cotton 444,000 tons; the agricultural foundation was fragile. Between 1950 and 1953, the Chinese government carried out a wide-ranging land reform in the rural areas. Peasants with little or no land were given land of their own, greatly arousing their enthusiasm for production. During the period of the First Five-Year Plan (1953-57), the yearly gross output of agriculture increased by 4.5 percent, on average. This period was the first "golden time" for China's agricultural development.

From 1958 to 1978, China's agriculture developed slowly. During this period, China practiced the cooperative and people's commune systems in rural areas successively, which emphasized the effectiveness of centralized and unified management, but reduced the efficiency of resource utilization and allocation. As a result, the peasants' enthusiasm for production was greatly dampened. In this period, the gross agricultural output value increased by only 2.3 percent, on average, every year.

In 1978, China introduced the household contract responsibility system, linking remuneration to output, and started to dismantle the people's commune system, eliminating the links between organizations of state power and economic organizations. Contracting land out to peasants altered the distribution form of land and mobilized the peasants* enthusiasm for production. In 1985, a second reform was carried out, which eliminated the state monopoly of purchase and marketing of agricultural products, and implemented the system of purchase according to contracts. The reform made the market play a basic role in adjusting the supply and demand situation for agricultural products and allocating resources, and aroused the peasants' creativeness and enthusiasm for production. Commodity production and circulation in rural areas developed at an unprecedented scale and rate. Meanwhile, through more than ten years of adjustment, the industrial structure in rural areas is becoming more complete with each passing day: the proportion of primary industry has declined markedly, while the proportion of the secondary and tertiary industries has risen. The proportion of agriculture in primary industry has also declined markedly, while that of animal husbandry and fisheries has grown; the proportion of cash crops in farm production has gone up, while that of grain crops gone down. Meanwhile, the proportion of secondary industry has dropped, while that of tertiary industry has risen.

For 21 years, the average growth rate of China's agricultural gross output value reached 6.5 percent, the highest being 12.3 percent in 1984, which surpassed the world's average development level for the same period. In 1999, China's agricultural production continued to develop in an all-round way, and the outputs of grain, cotton and oil-bearing crops were 508.39 million tons, 3.83 million tons and 26.012 million tons, respectively, increases of 66.7, 76.7 and 400 percent over 1978; the output of meat amounted to 59.61 million tons, or seven times that of 1978; and that of aquatic products 41.224 million tons, an increase of 8.8 times over 1978. As a result, the chronic shortage of major agricultural products was finally overcome. Now the annual average quantities of meat, eggs and milk per person are 50, 17 and 6.6 kg, which are close to or surpass the world's average. The problem of shortages of food, which troubled Chinese peasants for hundreds of years, has been solved at last.

The rise of township enterprises has promoted the all-round development of the agricultural economy. In 1987, the gross output value of township enterprises exceeded that of farming; in 1990, the township enterprises earned 13 billion US dollars from exports, about 23.8 percent of the national gross value of foreign exchange earned from exports. Thousands of towns are playing an important role in eliminating the differences between urban and rural areas, and promoting the integration of urban and rural areas. The per capita net income of peasants increased from 134 yuan in 1978 to 2,210 yuan in 1999.

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