production team today is still, by far, the most important institution in rural China.

The team is the organization in which families first come in contact with an institution organized by the Party and Government. It is the institution which controls most of the means of production. in China's countryside. It is the unit which takes final responsibility for most of the economic decisions made in rural areas. It is in the context of the teams that individuals are mobilized to work in the fields. Motivation originates in these organizations which calculate profit or loss and which distribute income to members, the collective, and the state. Most of the grain and foodstuffs in China are raised and consumed within the confines of this unit. No other institution in China so deeply affects every major aspect of the lives of China's rural population.

Unfortunately source materials collected generally yielded much. less information about this important unit than regarding communes and brigades. Chinese authors seem much more willing to discuss the latter than they do to describe the organization, activities and functioning of teams.

1. SIZE AND ORGANIZATION

Production teams are estimated to number about 5 million. On the average a team has about 33 households, approximately 145 persons and cultivates roughly 20 hectares (49 acres). (See Appendix II regarding estimates of team size.) Because of the lack of data on teams, it is not possible to highlight differences in team size from province to province, and differences between rural and suburban teams. Some teams were as large as the average brigade, for example, one team in Hopeh had 196 households, 985 persons.134 On the other hand, some teams had as few as 11 households and 50 persons 135 and some specialized teams had almost no arable land at all.136 For instance, one team near Shanghai had only 1.9 hectares (4.7 acres).137

2. FUNCTIONS AND ACTIVITIES AT TEAM LEVEL

a. Administration

In the past 12 years production team organization has not changed significantly (see the organization chart on page 370). As before, team members periodically elect an approved slate of officers, a team and a deputy team leader, and a management committee. In addition to the above officers, teams have an accountant or a work point recorder, a militia platoon leader, a sparetime wired broadcast repairman, and a custodian to care for the team's tools, animals, and granary. With the evidence currently available, it is difficult to measure the strength of Party organization and influence at the team level. Reports

138

134 Rewi Alley, Travels in China, 1966-1971, Peking. New World Press, 1973, pp. 157-158. 157-158.

135 "Eleven Poor and Lower-Middle Peasant Households Build Socialist New Village Trough Diligence," NCNA, in English, Nanchang, Mar. 19, 1970; SCMP, No. 4624, Mar. 26, 1970. pp. 98-101.

138 "Diversified Economy Can Be Developed Both in the Mountains and on the Plain," SSST. No. 15. Aug. 1. 1965: in SCMM. No. 497. Nov. 8, 1965. pp. 39-41.

137 Revolutionary Committee, Hung Ch'lao People's Commune, Shanghai Hsien, "Advance Victoriously Along the Path Indicated by Chairman Mao," WHP, Aug. 29, 1968; translated In SCMP, No. 4263, Sept. 23, 1968, pp. 7-12.

138 "In the Communes-Ownership on Three Levels," CR, vol. XXII, No. 1, January 1974, pp. 35-38.

were found indicating some teams in communes did not have any Party Members or organized Party cells.139 For example Chia-ting County, in formulating a 6-year agricultural development plan, stipulated in article 29 that "Party groups (cells) should be set up in most of the production teams." 140

The fact that cells were to be organized is evidence that, in 1974, most teams in this suburban Shanghai county did not have cells. Assuming half of China's 28 million Party members live at the basic level, and there are 10 members per commune and 8 members per brigade, there then would be slightly more than one Party member per team.141 Some Party members holding positions at commune and brigade levels live at the team level lending Party influence to this level. Generally speaking, however, most teams appear not to have organized Party cells. If a team has a Party member, he usually concurrently has an important position such as team or deputy team leader, a phenomenon parallel to that found at brigade and commune levels.

b. Production and services

Most of the income generated in production teams comes from growing crops: Grain, cotton, oilseeds, fruit, vegetables, and other crops. Some income also comes from raising livestock, especially hogs, and catching fish. From materials collected from this report, it appears that production teams on the average had much less subsidiary production activity than brigades or commune levels. Individual teams reported activities such as earning money through transportation of goods,142 making straw sandals 143 and mats,144 fodder cutting,145 and beekeeping.146

3. CONNECTIONS

As was the case with brigades, team connections with institutions. outside the commune system may not indicate team autonomy because teams may have cleared activities with brigade and commune levels. Examples of these activities include the making of a contract between a team and an agricultural institute in which team laborers did some of the work on the experimental farm.147 A team in Hopeh Province hired tractors from the county level tractor station to plow its fields.148

130 "Enthusiastically Cultivate Comrades Who Want To Be Admitted to the Party," JMJP, Aug. 30, 1972, p. 2; excerpts translated in FBIS, Daily Report: People's Republic of China, No. 184 Sept. 20, 1972, pp. B-1 and 2.

140 The 1974-1980 Agricultural Development Program of Chia-ting Hsien (Revised Draft). HHVPP, No. 9, Sept. 20, 1974, translated in SPRCM, No. 794, Oct. 13, 1974, pp. 19-29.

141 "Press Communique of the Tenth National Congress of the Communist Party of China," in The Tenth National Congress of the Communist Party of China (Documents), Peking. Foreign Languages Press, 1973, pp.77-85.

143 "Szechwan Factories and Mining Enterprises Extensively Experiment on Labour System of Work and Farming by Rotation, NCNA, in English, Chengtu, Dec. 27, 1965; SCMP, No. 3615. Jan. 12, 1966. pp. 18-20.

143 Rewi Alley, Travels in China, 1966-1971, Peking, New World Press, 1973, pp. 475-478. 144 Shahid Javed Burki, A Study of Chinese Communes, Cambridge, Mass., Harvard University Press. 1969, pp. 1-101.

145 "New Commune Members on Maochiashan Hill," CR, vol. 23, No. 10, October 1974, pp. 32-39. 148 "Production Team Transforms Mountain Area in East China," NCNA, in English, Nanchour. Feb. 28, 1969; in SCMP. No 4370, Mar. 6. 1969, pp. 13–14.

147 "Mel Hsien Agricultural Institute Employs Contract Workers," NCNA, Canton, Nov. 22, 1965; translated in SCMP, No. 3596. Dec. 13, 1965, pp. 14-15.

148 Elsle Fairfax-Cholmeley, "Two Weeks in a Commune," EH, vol. VII, No. 1, JanuaryFebruary 1968, pp. 35-39.

Teams in Liaoning Province worked with foreign trade departments to select, grade, pack, and deliver apples for export.149 A team in Kiangsu Province made an agreement with a supply and marketing co-op in a different county to make raincoats.150

Regarding the connections between teams, some teams cooperated together to manage joint enterprises. In these enterprises teams invested resources, supplied the labor force, and shared costs and benefits in proportion to their level of ownership. References to these enterprises occurred more frequently in the mid-1960's than in recent years.151 Of course, teams competing for scarce resources produced tensions. For example several teams in Kiangsu Province shared a rice threshing machine. When one team failed to cooperate properly in its use, the team was criticized at a brigade level meeting in which all the teams were present."

152

The most important connections team leaders had to worry about were those related to income distribution in which the team had the responsibility to allocate income to the state, the collective (team), and to households. Income distribution and motivation of individuals is greatly affected by the structure of the commune system. Teams are small-sized collective farms in which farmers pool their lands, labor, and capital for purposes of production and agree to be remunerated by dividing the profits (the residual income left after payment of expenses and taxes) among themselves. Because the collective owns the means of production instead of the State the team is not strictly a socialist institution.153

Collective ownership requires that farm families themselves assume responsibility for production risks. In theory expenses and deductions could be equal to production leaving no residual income to be distributed to farmers. Moreover because teams are not state-owned, state labor regulations do not apply, and team members do not have guaranteed wages and related fringe benefits as do state farm employees and factory workers. Furthermore, because of labor discipline in the commune system, members are not allowed the freedom of independent farmers. Obviously, motivation is important in the system in which farmers are required to assume responsibility for risk taking, have no guaranteed wage, and do not have the freedom of individual proprietors.

Team members are motivated to work through a combination of material and nonmaterial incentives. Nonmaterial incentives include labor discipline codes, selecting and honoring "model" farmers for outstanding work, and inducing teams to engage in friendly competition with each other, the winners to be awarded medals, red flags, or other symbols of achievement. These types of incentives were employed through the period under study and continue to be an important element in motivating farmers to work. In spite of all the rhetoric

149 Chang Ho-wei, "The Worker-Peasant Labor System in Finance and Trade Departments." HCS. No. 1-2. Feb. 20, 1966; SCMM. No. 534. July 25, 1966, n. 24

150 "An Example of Learning From Tachai by a High-Yield Area South of the Yangtze River" Peking. JMJP. Dec. 31, 1970: In SCMP, No. 4830. Feb. 3, 1971, pp. 88-91.

151 "What is Meant by Joint Operation by Production Teams and Joint Operation by the Commune and the Production Teams?" Canton, NFJP, Sept. 19, 1965: translated in SCMP No. 3637 Feb. 14, 1966 nn. 17-20.

152 "Democratic Activity Day" Welcomed by Cadres and Masses," Peking, JMJP, Apr. 8, 1966: in SCMP. No. 3682. Apr. 22. 1966, pn. 12-14.

153 Socialist institutions are those in which the means of production are owned by "all the people," 1.e. the State.

stressing the important of nonmaterial incentives in the socialist education movement, the Cultural Revolution, and the movement to criticize Lin Piao and Confucius, few teams give nonmaterial incentives the importance they had during the Great Leap Forward described in Section II above. While nonmaterial incentives are expected to become preponderant in the long run when material rewards will be minimized or eliminated, in the short run the value of material incentives has been respected.

Material incentives have provided the force which has induced farmers to produce from team fields. Many factors affect these incentives, but all factors cannot be treated in equal detail because of the paucity of data. For example, while it is well understood that farmer incentives can be raised by reducing the prices he has to pay for tools and fertilizer, it was not possible to obtain precise information on input prices teams paid for such items in the past 12 years. In the past few years articles in newspapers in China say input prices to teams have decreased 50 percent from 1952 to 1973, but no details were given as to the base from which the reductions were made.154 155 Similarly, incentives to farmers can be increased by raising the price the state pays teams for the goods it purchased. Some news articles recently reported procurement prices for agricultural and subsidiary products were raised by over 60 percent from 1952 to 1973.156

Furthermore, incentives to farmers can be affected by the availability and prices of consumer goods farmers can purchase with their earnings. Once again little information was found on this topic. The impression gained from the reports on communes is that more consumer goods are available to farmers now than at the beginning of the period. Finally, incentives to farmers can be affected by whether teams allow households to work private plots. Private plots and private production activity of households will be discussed below in the section on households.

Some of the most important factors in the material incentives system are those which (1) determine the relative share of income distributed to the state, the team and the household; and those which (2) determine the amount of income to be allocated to individual households. With the lack of information it is not possible to provide a detailed account of the shares allocated to the state, the teams and household. It is important, however, to understand the processes involved in income distribution. To highlight important facets of the income distribution process an example will be employed. The mechanics of distribution can be seen operating in the example and the example will provide a general outline of how the shares of income are distributed. After the income distribution system has determined the residual income to be distributed, work payment systems actually allocate the residual income to individual households.

For the purpose of illustration, the average teams discussed above with 33 households, 145 persons, and 20 hectares will be used as a model

184 Chung Wen. Chung-kuo she-hut chu-i shih-ch'ang fan-yung hsing-wang" ("China's Socialist Markets Prosper"), Ching-chi pao-tao (Economic Reporter), No. 1401-1402, Jan. 1. 1975, Hong Kong. pp. 9-10.

155 "Rural Collective Deposits and Savings of Commune Members Increase Markedly As a Result of Our Country's Ten Consecutive Years of Bumper Harvests, and Continuous Consolidation and Development of Collective Economy, and the Gradual Increase of the Income of Members," JMJP, Feb. 24, 1972; translated in SCMP. No. 5087. March 1972, pp. 69-70. 158 Ibid.

team. The team's grain production is estimated to be 70 metric tons, and its income from all sources is calculated in terms of grain at 80 metric tons. At the end of the accounting period, income generated in the team is allocated to three entities: The state; the team; and the households.

The state figures prominently in team income distribution because, as has been mentioned previously, teams deliver grain to state tax stations to pay their agricultural taxes and they deliver prescribed quantities of grain, cotton, and edible oil seeds to state procurement stations. Since 1955, the Government has implemented a system in which areas producing a surplus of goods are required to sell their excess products to the state at fixed prices and the state bears the burden of rationing grain, cotton cloth, and edible oil to the population. Through planning and the accumulated performance of teams, the Government has come to expect certain teams to annually deliver a set quantity of grain under this system. The quantities of goods to be purchased is calculated as follows. Officials determine the productive capacity of the teams land to be 70 metric tons of grain. Next they calculate the consumption needs of the team as follows:

(1) 34.8 metric tons or 49.7 percent of grain production should be set aside to provide each of the 145 persons in the team with a grain. ration of 240 kg per person; (2) 2.45 metric tons or 3.5 percent of the grain should be reserved for seeding next year's grain fields; (3) 4.2 metric tons or 6 percent of the grain should be allocated as fodder for livestock; and (4) 3.5 metric tons or 5 percent of the grain should be reserved by the team to pay its agricultural taxes. The supply of grain is then compared with the team consumption needs. If the supply is greater than team needs, the team is declared a grain surplus team and the state has the prerogative of purchasing up to 90 percent of the quantity in excess of needs. Assume that our model team produces as expected at its normal rate of 70 metric tons. When this amount is compared with the team's consumption rate of 44.95 metric tons, the team is declared a grain surplus team. The state can then purchase 90 percent of 25.05 or 22.55 metric tons. The state purchases this grain at a price which it fixes.157

At this step in the process of income distribution, the team has fulfilled its obligations to the state. The team has delivered to the state 3.5 metric tons as agricultural tax and another 22.55 metric tons as a compulsory grain delivery. The team is left with 76.50 metric tons of grain which consists of 53.95 metric tons of actual grain on hand and the value of 22.55 metric tons of grain sold to the state.

The team is the next entity to claim its share of gross income. The team lays claim to about 30 percent of the income, or 24 metric tons of grain to pay for production expenses. Another half a ton of grain (0.5 metric ton) is allocated to the team leaders and bookkeepers to remunerate them for the time they had to attend meetings and to do business for the team and could not earn labor days. About 10 percent of the team's gross income, or 8 metric tons is put into the team's capital accumulation fund and used to pay off principal and interest on production loans or to purchase machinery. The team's

187 "Provisional Measures for Unified Purchase and Unified Supply of Grain in Rural Districts." NCNA. Peking, Aug. 25, 1955; translated in Current Background, No. 354. Sept. 7, 1955, pp. 7-14.