Q: What is the structure of the household contract responsibility system? What changes has the system brought to China's rural areas?

A: The practice of household contract responsibility was in fact initiated by a group of farmers in small village in Anhui Province, central China. The late Chinese leader Deng Xiaoping once termed it "a great invention of Chinese farmers."
 
The system contains two features. First, farmland is still owned by the public. Second, production and management are entrusted to individual farming households through long-term contracts. During the contract period, the farmers pay taxes to the State and collective reserves to local governments, and keep all the other produce for themselves.
 
The system was so warmly accepted by farmers that by the end of 1983 it had incorporated more than 90 percent of the country's farming households. The system not only released rural productive forces but also turned out to be the breakthrough of the rural reforms.
 
Firstly, the system greatly inspired farmers' production initiative, sharply increased agricultural output, and raised rural productivity.

Secondly, large amount of rural labor force was released from land cultivation and entered village-run factories and township enterprises, which have evolved into an important sector in the rural economy.
 
Thirdly, the system transformed production mode in rural areas and changed farmers' lifestyle. It helped elevate farmers from self-sufficient petty producers to commodity producers and managers, while promoting the development of rural market.
 
Finally, with rapid development of the rural economy, farmers' living standards have been improved markedly. Many of them are now living a relatively well-off life.
 
Since the household contract responsibility system was implemented more than two decades ago, China's agricultural production has bee increasing at an average annual rate of 6.7 percent, well beyond the world average. The annual growth rate grain production is 2.7 percent, with total grain output exceeding 500 billion kilograms in 1996, making China the largest grain producer in the world. Output of cotton, cereals, oil, sugar, meat and milk products has increased several times over. Per capita consumption of meat, eggs and milk is either close to or above the world average.
 
In August 2002, the Standing Committee of the ninth National People's Congress enacted the Rural Land Contracting Law, which became effective on March 1, 2003. The law provides a legal guarantee for farmers' long-term and secured land-use rights...