Along the Huaihe River, Xiaogang Village, Fengyang County of Anhui Province, has become a household name as the pioneer of China's agricultural reform.

Before 1978, the small farming village was known only for its poverty. Its 20 households of some 100 villagers were mostly dependent upon state relief funds and loans to ease their continual crop failures. Agriculture was ragged in the region because of a stagnated river channel, in addition to the floods and droughts that hit the area in successive years.

Some elderly people in the village recalled, "In the past, girls from the village could hardly obtain a good dress for marriage, while for young men it was even harder to find a wife from nearby villages."

In 1978, Xiaogang suffered from a great drought and farmers from the village of thatched-roof houses on the plains of southeastern Anhui Province starved in miserable conditions. That's when Yan Junchang and Yan Hongchang, two local leaders, decided to do something to help their people. They called in the heads of all the local households. After a short discussion they made a radical decision: abandon the long practiced communal farming system and divide the land among themselves. Such a practice was illegal at the time.

They drew up a contract that divided the commune's land into family plots. They would turn their production quotas over to the state and the leadership, and keep whatever remained. Under the commune production system at the time, keeping any communal grains at individual's disposal . was forbidden.

"If the trial fails," the contract concluded, "We cadres are prepared for death or prison punishments under the laws, and other commune members pledge to raise our children until they are 18 years old, becoming adults."

However, what started as a secret pact is now considered the first bold step of agricultural reform in China. Even though the farmers at Xiaogang provided a new model for farming and helped thousands escape the grips of poverty, the situation in the village today is bleak. The small village is struggling, much as it did before the secret contract was drawn up 27 years ago, to change things for the better.

Role models for farmers

For most of China's rural population, agriculture is the vital source for livelihoods and social security. After the founding of the People's Republic of China in 1949, the government helped farmers reallocate land through agrarian reform. In Fengyang County, where Xiaogang is located, farmers were organized into collective farming districts. During that period, late Chairman Mao Zedong also kicked off the movement to regulate the nation's waterways. Reservoirs and water reserve areas were built up, several canals were dredged, and levees were heightened and consolidated to control flooding. After waterways were regulated and agriculture collectivized, annual grain production began to stabilize. The food shortage problem was fundamentally solved.

During the Great Leap Forward of 1958-60, communes were set up as the organs of both ruling power and productive labor. Dozens or even hundreds of cooperatives at different economic and development levels were merged. The experiment proved disastrous later, and practically ruined the agricultural industry of the country.

Villagers from Xiaogang knew that the secretly contracted farming plots would exert a great political risk. But they had few alternatives. It was do it their way, or die. In less than one year, they harvested nearly 70,000 kg of grain and the years of starvation gradually ended. Though output did not reach the level of 10,000 kg at the preliminary stage of collectivization, it was ever increasing from then on.

Others began to notice that the Xiaogang farmers went unpunished. So they followed suit and reclaimed their fields with their own reform plans. Then in April 1979, the Communist Party of China (CPC) Central Committee made a decision to speed up agricultural development, and opened up to reform. The reforms of the Xiaogang farmers began to spread outside Anhui Province and the obsolete commune system was replaced with the "household contract responsibility system." In the early 1980s, the Central Government decided to give peasants long-term leases on the collectively owned farmland. Under the new system, the proprietary of land is still collectively owned. But the land use rights are distributed to rural households for independent operation. Households have become the main economic units of the agricultural production system in rural China.

Generally speaking, the farmers were allowed to keep any agricultural gains after paying the rent of the farmland. They could trade their agricultural products to grain procurement agencies, cooperatives or individual businesspeople, or sell them in urban markets.

As people have seen in Xiaogang, what began as a desperate act of civil disobedience became a movement that improved the lives of hundreds of millions of rural Chinese. Nowadays in Xiaogang, nobody fears starvation. According to an official from the Ministry of Agriculture, "The household contract responsibility system accords with the interests of the Chinese people and the fundamental realities of the country, and enables most farmers in the country to live a life with enough food and clothing."

Pioneers slip behind

Today's Xiaogang is not what people will expect, given the influence of the village in the 27 years since 1978. Xiaogang now has a population of 470 people. The annual per-capita income is just 2,000 yuan ($246.61). Some 50-60 villagers have migrated to work in urban areas for better livelihoods and more than half of the households are in debt. Many people say that Xiaogang solved China's agriculture problem in one fell swoop, but has existed on the margins of wealth for 20 years. The local cadre Wu Guangxin said, "Compared with what the Xiaogang Village was like 20 years ago, it has greatly changed. But compared to those coastal rural areas, we have lagged far behind."

The columnist Meng Qingyao said, "The great pioneering beginning of Xiaogang is respectable, but under the current national agricultural development mode, I doubt that a single village could achieve eye-catching sustainable development."

Today, most signs of prosperity in the town are the result of subsidies. Beautifully designed architecture was paid for by donations. The government, according to accountant Yan Lixue, also has funded some houses. Yan did not know how much money in donations and funds the town has received. But schools are built, roads are paved and water is tapped while touting the town as a "trailblazer" and the birthplace of the new agriculture production system. "We know one thing for sure, simply depending on governmental supply will not lead us to affluence and being well off," Yan Lixue added.

Wu Guangfa, an agricultural technician from Xiaogang, said that the household contract responsibility system also has disadvantages. First of all, he said, it is not favorable to scientific farming. Second, it is not appropriate for large-scale operations. Third, it hampers the mechanization of farming. And last but not the least, it is a waste of human and material resources and also hinders the construction of water conservancy projects. It has shackled the agricultural development of Xiaogang.

Wu gave an example. Several years ago, a foreign consul general to China reached an agreement with the local bureau of agriculture to fund a 670,000 yuan ($82,614) animal husbandry and agriculture project in Fengyang County where Xiaogang located. The local farmers used the money to raise ducks in separate household units. The profit margins were slim and some families could not even recover their costs.

"It would be harder to promote fine seeds to villagers operating on scattered farmland plots," said Wu. "If we could plant on collective farmland for experiments, a good harvest would be the most effective way to promote the quality of seeds."

Entering the village there are aspens trees. Some of the trees even have grain growing around them in the fertile land. The unique landscape illustrates the new desperation of the farmers, once again trying to make ends meet. When grain prices hit a low and the farmers could not earn enough for their livelihoods, they resorted to forestry under a subsidy policy. It helped in the first year, but now the price of grain has begun to rise with state subsidies. The farmers have begun to return the land to farming again.

Associate Professor Zhang Deyuan with the School of Economy at Anhui University said, "The phenomenon shows the side effects of administrative egalitarianism under our long practiced distribution system."

Professor Cheng Shulan of the School of Agricultural Economics at the Renmin University of China pointed out that a lack of resources in remote villages like Xiaogang has restrained the agriculture industry. It stands in stark contrast to resource-rich areas like Pearl River Delta and Yangtze Delta.

New direction

However, villagers in Xiaogang have never given up. They have established a rapport with the more prosperous Zhangjiagang Village in Jiangsu Province along the Yangtze River. They stand as "sister villages." Zhangjiagang has not only built a "friendship road" for Xiaogang, but also helped with its restructuring of the industrial system by setting up a 5.3-hectare grape plantation.

The new leadership of Xiaogang is making active efforts for its own development. Most villagers agree that the incumbent chief of the village, Yan Deyou, son of Yan Junchang, is an intelligent young man with capabilities. He had resigned his "Iron Rice Bowl" position at a higher administrative level to run for the current position. "The creation of household contract responsibility system is the pride and achievement of my father's generation, which belongs to the past," Yan Deyou said. "Now that Xiaogang is dropping behind, we have to make a second reform to bid farewell to the past and embrace a brand-new future."

Yan said that the biggest difficulty facing Xiaogang is the lack of more partnerships and help for further development. "The cooperation often requires counterpart funding, which we still have not made," he said. However, their efforts have made some progress. They have searched out a new way of pig breeding from a professor in Shanghai and are planning to build a modern pig-raising farm.

Yan has made calculations for Xiaogang's future. According to him, if the per-capita average area of grape growing exceeds 0.07 hectares, each villager can get 1,700 kg of grapes, which sell at 2,700 yuan ($332.92) estimated at the lowest price of 1.6 yuan ($0.20) per kg.

Likewise, he has made most of the abundant grass resource in the village available to encourage livestock breeding. It is planned that some 200 cows and 2,000 sheep will also help Xiaogang villagers reap a tidy income.

"As a symbol of the agricultural reform initiative, Xiaogang is more accessible to investment invitation all over the country," said Yan. "We will gradually drop the separate household operation system, and promote scale production to intensify and strengthen the Xiaogang brand. Currently, Xiaogang has a rare opportunity, and our villagers will make joint efforts to make better use of the intangible assets of Xiaogang."