The economic and institutional framework against which trends in crop production under the government of Deng Xiaoping must be considered, is vastly different from that which existed throughout the Mao era. In a word, Deng replaced a system of planned production and supply by one in which market demand became the main determinant of the level and structure of agricultural production. Under Mao Zedong, maximizing the physical output of key agricultural products was the basis of agricultural policy. Centrally identified priorities – based on “national need” – were reflected in targets for the output, sown area and yield per hectare of individual items. These mandatory targets were to be fulfilled by the collective farms (the production teams of the communes) which were the basic organizational units of Chinese agriculture. Similarly, the disposal of farm output was determined by the central plan. For production teams, therefore, decision-making was relatively simple and followed the sequence of production, harvesting and procurement, all according to plans laid down by the government. Cost accounting was rudimentary. It was not, in any case, geared to the promotion of “economic efficiency.” If production costs rose-for example, as a result of an increase in the multiple cropping index directed by the government – the peasants bore the burden, as they were the residual claimants in the distribution of income by the production teams.
Purifying Japan's Banks: Issues and Implications
