The grain distribution system in China under a planned economy

Abstract

This paper examines the grain distribution system in China that was adopted to constrain industrial development, with the grain crisis following the Great Leap Forward as its turning point. It shows how shortage of commercial grain products restricted industrial development under a planned economy. The distribution system adopted in urban communities during the 1950s was an attempt at efficient distribution of grain, targeting only the non-agricultural population, which was the pillar of industrialization. While the objective of the distribution system was a reduction in grain supply to urban communities, it did not reduce the non-agricultural population itself. As a result of aggressive promotion of industrialization throughout the 1950s, the non-agricultural population steadily increased beyond the commercial grain-supply capacity. Beginning with the grain crisis at the start of the 1960s, efforts were made to reduce the non-agricultural population by combining the distribution system with a population registration system, leading to a retreat in industrialization. At the same time, a strong consciousness developed regarding the policy of considering non-agricultural population and the scale of industrialization together with the scale of commercial grain that could be supplied by the agricultural sector. In the 1970s, the volume of grain supply to the non-agricultural population came to be linked to the scale of the commercial grain supply. This meant that industrialization at that time was constrained by the scale of the commercial grain supply.