Peasant Grain Marketing and State Procurement: China's Grain Contracting System

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Abstract
Economists have argued that the compulsory procurement policy has been an important cause of China's past agricultural problems. Political scientists have seen administrative evasion, under-reporting, and other forms of “corruption” in villages during the Mao era as the result of state pressures for larger grain sales. The Chinese themselves now openly criticize the system of unified purchase (tonggou) for being coercive and inefficient; for forcing quota sales by administrative fiat, rather than utilizing market demand and incentives. In April 1985 the government abolished the system of unified purchase, the keystone of China's grain control policy since the early 1950s; in its place is a system of contract procurement (hetong dinggou).

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