May 31, 1980
Now that more flexible policies have been introduced in the rural areas, the practice of fixing farm output quotas on a household basis has been adopted in some localities where it is suitable. It has proved quite effective and changed things rapidly for the better. Fixing output quotas on a household basis has been adopted in most of the production teams in Feixi County, Anhui Province, and there have been big increases in production. Nearly all the production teams in the same province's Fengyang County, which incidentally is the locale of the ``Fengyang Flower-Drum'' Opera, have been practising an all-round contract system, which inside of a year has resulted in an upswing in production that has transformed the county's prospects. Some comrades are worried that this practice may have an adverse effect on the collective economy. I think their fears are unwarranted. Development of the collective economy continues to be our general objective. Where farm output quotas are fixed by household, the production teams still constitute the main economic units. What does the future hold for these places? It is certain that as long as production expands, division of labour increases and the commodity economy develops, lower forms of collectivization in the countryside will develop into higher forms and the collective economy will acquire a firmer basis. The key task is to expand the productive forces and thereby create conditions for the further development of collectivization. To be specific, the following four conditions should be realized: First, a higher level of mechanization, one which is relatively well suited to local natural and economic conditions and welcomed by the people (here I mean mechanization in a broad sense, not merely mechanized ploughing, sowing and harvesting). Second, a higher level of management, combining accumulated experience and a contingent of cadres with fairly strong management abilities. Third, a developed diversified economy that leads to the establishment of a variety of specialized groups or teams, which in turn leads to the large-scale expansion of the commodity economy in the rural areas. Fourth, an increase in the income of the collective, both in absolute terms and in relation to the total income of the economic unit involved. If these four conditions are realized, the localities that now fix output quotas on a household basis will develop new forms of collectivization. This sort of development won't come from above as the result of administrative decree, but will be an inevitable response to the demands of growing production.
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