Why collective farming blunted effort
Under China’s rural commune system, land and major farming decisions were organized collectively. Households often received income through work points—credits for labor that were later used to divide the collective’s returns. A family’s extra hours or careful work did not necessarily bring it a matching share of extra grain. That weakened the connection between effort and reward, especially when a harvest was poor.
A household-sized incentive
In 1978, farmers in Xiaogang, a village in Anhui province, made a risky change: they divided collective land among households while leaving the state’s required grain delivery in place. After meeting that obligation, families could benefit from what they grew beyond it. The arrangement made decisions more immediate. A household had reason to weed on time, protect its crop, and put in additional work because it would share directly in the result.
The pact was secret because it challenged the established system, and the farmers faced consequences if authorities treated it as forbidden. Its significance was practical as well as political: it offered a way to raise production without first abandoning the state’s claim on grain.
From local experiment to national reform
The approach proved attractive because it addressed a problem officials also had to solve: how to increase farm output and rural incomes. As household-based farming spread and gained official acceptance, responsibility for production moved closer to the people doing the work. The state still shaped agriculture through policy and procurement, but families gained greater control over their plots and a clearer claim on surplus.
The change did not make farming risk-free—weather, prices, and required deliveries still mattered. It did alter the everyday calculation: an extra day of labor could now mean more food or income for the household that supplied it.
