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The Baogan Daohu Incentive System: Translation and Analysis of a Model Contract

Published online by Cambridge University Press:  17 February 2009

Frederick W. Crook
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Extract

The development of work incentives has been a perennial problem in planned economies. In China's countryside the pendulum has swung from emphasis on non-material and egalitarian incentives under Mao to the more individualistic incentives of the post-Mao era. In the late 1970s, China's new leaders introduced the production responsibility system (shengchon zerenzhi) which sought to motivate farmers by rewarding them for completing specific tasks. Both old and new measures have been used to implement this system. Cadres have borrowed certain work measurement methods attached to the old labour-day work payment system, operating since the mid 1950s, which fixed responsibility for tasks and awarded labour days when work was completed. But cadres have also adopted an entirely new work-payment system in which households negotiate with production teams to farm given parcels of land. These households agree to return a certain quantity of their crops to fulfil collective and state obligations and are then permitted to retain the surpluses for themselves. This new system is called baogan daohu (“full responsibility to household,” hereafter referred to as the baogan system). Sometimes the system is also referred to as the jiating lianchan chengbao zhi or the household responsibility system.

Type
Research Note
Information
The China Quarterly , Volume 102 , June 1985 , pp. 291 - 303
Copyright
Copyright © The China Quarterly 1985

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References

1. China Daily, 29 12 1983, p. 1.Google Scholar

2. Crook, Frederick W., “Report on an agricultural observation trip to China, July 1982, Pt. 1: notes from interviews with national and provincial officials,”Google Scholar PRC section, Asia Branch, IED, ERS, U.S. Department of Agriculture, August 1982.

3. See following for references on expanded use of the baogan to raise grain crops in 1983: U.S. Joint Publication Research Service (JPRS), China Report—Agriculture, No. 82,602 (7 January 1983), p. 46; ibid. No. 84,600 (24 October 1983), p. 64; Foreign Broadcast Information Service (FBIS) Daily Report: China, No. 160 (17 08 1983), p. 5–6Google Scholar; and FBIS, No. 209 (27 10 1983), p. S–3Google Scholar. For example, Heilongjiang province first used baogan in an all round way in 1983, see, Renmin ribao (People's Daily), 11 12 1983, p. 1Google Scholar. Likewise the farmers in the developed Liaoning peninsula and Liaohe valley used the baogan system in an extensive way in 1983, see, British Broadcasting Corporation (BBC), Summary of World Broadcasts (SWB), Far East Weekly Economic Report, W1260, 2 11 1983, p. A–5.Google Scholar

4. The author is indebted to Tuan, Francis C. for finding this model contract, “Tuijian yifen baogan daohu de hetongshu” (“Recommended form of contract document to implement the full responsibility to household systems”), Shanxi ribao, 3 09 1981, p. 2Google Scholar. For other articles giving details on setting up contracts see JPRS, China Report—Agriculture, No. 81,194 (11 07 1982), pp. 3–5Google Scholar and No. 81,641, 26 August 1982, pp. 42–45.

5. Crook, , “Report on an agricultural observation trip to China, Pt. 1,”Google Scholar and Crook, , “Report on an agricultural observation trip to China, Pt II: notes on visits to communes,”Google Scholar PRC Section, Asia Branch, IED, ERS, U.S. Department of Agriculture, September 1982.

6. Crook, Frederick, Reports on Rural People's CommunesGoogle Scholar, an unpublished data set.

7. The term “contract rent” refers to the payment for the use of land which is arrived at through some bargaining process, it is the actual amount of rent paid.

8. Currently there is insufficient evidence on these questions to formulate definitive answers. On the one hand the impression is given that many teams are primarily interested in household delivery of products and are not so concerned with quotas for sown area, yields and output targets. On the other hand there is a sense that cadres in some teams do pay attention to sown area quotas. For example, contracting rules in Tibet before June 1984 suggest that team leaders did dictate the kind and area of crops to be sown. See FBIS, Daily Report: China, 2 07 1984, p. Q–1.Google Scholar

9. Renmin ribao, 20 05 1983, p. 2.Google Scholar

10. FBIS, Daily Report: China, 16 11 1984, p. K–18.Google Scholar

11. Kang, He (ed.), Zhongguo nongye nianjian: 1981 (China Agricultural Yearbook, 1981) (Beijing: Nongye chubanshe, 1982), p. 68.Google Scholar

12. Households made initial investments when they joined collective farms in the mid 1950s. Rural investment in the period 1958–79 came primarily from the collective sector and households had great difficulty acquiring productive assets. Since 1980 farm families have begun to purchase a wide range of assets such as tools, draught animals, tractors, trucks, and farm equipment. For example, household ownership of tractors shifted from 1% in 1980 to 43% at the beginning of 1984. See SWB, FE/W1273, 8 02 1984, p. A–11Google Scholar. Households also have invested heavily in housing, building more than 830 million sq. m. of floor space in 1983 (China Daily, 21 02 1984, p. 1Google Scholar.) Moreover, rural households have purchased tools for rural service trades, and have invested hundreds of million yuan in rural enterprises such as food processing, brick making, and manufacture of handicraft items. (“Peasants invest in varied businesses,” Beijing Review, No. 43 (22 10 1984), p. 9Google Scholar; SWB, FE/W1306, 26 09 1984, p. A–5Google Scholar and FE/W1304, 12 September 1984, p. A–3). Under baogan, however, collective withholdings decreased from 9.73 billion yuan in 1982 to 8.36 billion in 1983, a decline of 14–1%. Household purchase and construction of fixed assets totalled 6.79 billion yuan in 1983. This investment was 54–7% more than the 4.39 billion yuan collected by production teams in their capital accumulation funds in 1983. See Ministry of Agriculture, Animal Husbandary and Fishery, Commune-Brigade Enterprise Management Bureau, Distribution Statistics Division, “Yi jiu ba san nian nongcunjingji shouji fenpei qingkuang” (“The situation in distribution of economic benefits in rural areas in 1983”), Nongcun caiwu kuaiji, No. 8 (08 1983), pp. 3–6Google Scholar. Nonetheless, trends in net investment in the rural sector are not clear. For example, data on government investment in agriculture in 1982–84 are not known; it is difficult to determine the value of public work projects; and it is not known how teams actually invested their funds in their capital accumulation accounts. Without these data it is currently difficult to assess the direction of investment in the agricultural (rural) sector. This important topic warrants close attention in the years to come.

13. China Daily, 11 01 1984, p. 1.Google Scholar

14. State Statistical Bureau, Zhongguo tongji, mianjian (China's Statistical Yearbook) (Beijing: Zhongguo tongji chubanshe), 1983, p. 499Google Scholar, gives a figure of 270.11 yuan which has been reduced to 257.4 yuan to compensate for the change in the price used by teams to value goods in kind distributed to members.

15. Surls, Frederic M., “Dramatic growth of rural income;” U.S. Department of Agriculture, Economic Research Service, China: Outlook and Situation Report, Washington, D.C., 06 1984.Google Scholar

16. Estimates of changes in rural income as measured by the two different methods cannot be compared directly, but the percentage change in the two five-year periods does give a general impression of rapid growth of income in the last five-year period. See, Kang, He (ed.), Zhongguo nongye nianjian: 1980 (China Agricultural Yearbook: 1980 (Beijing: Nongye chubanshe, 11 1981), p. 41.Google Scholar

17. The quantity of irrigation and drainage machinery is more important than the number of tractors because the last mentioned were more often used for transport than for cultivation purposes. Machinery to control water supplies, on the other hand, had an important impact on yields, especially when water was used properly in conjuction with chemical fertilizers and improved seed varieties.

18. FBIS, Daily Report: China, 8 09 1982, p. K–3.Google Scholar

19. Dewei, Ge, “Weather poor—crop good, thanks to new setup,” (China Daily, 14 12 1983, p. 1.Google Scholar