On the Causes of China's Agricultural Crisis and the Great Leap Famine

Recently researchers have conducted extensive investigations on China's Great Leap crisis. In this article, we critically review this literature and argue that, since the grain production collapse was not the only factor that led to the famine, the causes of these two catastrophes require separate examination. At the theoretical level multidimensional factors were responsible for the crisis. However, existing empirical findings mainly support the exit right hypothesis to explain the dramatic productivity fluctuations in Chinese agriculture, and support grain availability and the urban-biased food distribution system as important causes of the famine. We suggest that additional empirical research is needed to assess the relative importance of the proposed causes. I. I N T R O D U C T I O N The sharp declines in agricultural production and the widespread famine between 1959-61 are two most important aspects of China's economic crisis during the Great Leap Forward. In 1959, total grain output suddenly dropped by 15 percent and, in the following two years, food supplies reached only about 70 percent of the 1958 level. During the same period, massive starvation prevailed in China. A careful study of demographic data concludes that this crisis resulted in about 30 million excess deaths and about 33 million lost or postponed births (Ashton, Hill, Piazza, & Zeitz, 1984). This disaster is one of the worst catastrophes in human history. The crisis of the Great Leap Forward became a fertile ground for academic research immediately after the release of reliable economic and demographic information from China in the early 1980s. Using census and fertility survey data, demographers investigated China's population trends for the period since the early 1950s, assessing in particular the mortality and fertility consequences of the famine. 1 For the economic analysis of the crisis, Lin (1990) proposed a hypothesis that the deprivation of exit right from a collective in 1959 was the main cause of the sudden and prolonged declines in agricultural productivity during the commune regime. This explanation caused considerable controversy among theorists interested in the role of incentives within cooperatives and students of the Chinese economy. A 1993 symposium issue of the Journal of Comparative Economics was devoted to a lively debate that focused on the role of exit rights for the success of agricultural coopDirect all correspondence to: Justin Yifu Lin, Department of Economics, Hong Kong University of Science and Technology, Clear Water Bay, Kowloon, Hong Kong (From August to January); China Center for Economic Research, Peking University, Beijing 100871, China (From February to July). Dennis Tao Yang, Department of Economics, Duke University, Durham, NC 27708, USA. China Economic Review, Volume 9, Number 2, 1998, pages 125-140 Copyright © 1998 by JAI Press Inc. All fights of reproduction in any form reserved. ISSN: 1043-95 IX. 126 CHINA ECONOMIC REVIEW VOLUME 9(2) 1998 eratives. 2 Those discussions also explored alternative reasons for the agricultural crisis, including bad weather, bad management, and increases in the size of production units. More recently a few studies have investigated the causes of the famine, shifting attention away from the focus on productivity changes with collectivization. Utilizing Sen's entitlement approach to famine analysis, Lin and Yang (1996) presented econometric evidence that both urban-biased food ration systems and the food availability decline (FAD) contributed significantly to the increase in death rates during the famine. Other researchers argued that consumption irrationality (Chang & Wen, 1997) and the Great Leap radicalism (Yang, 1996) were the critical causes of massive starvation. These researchers have carried out a lively discussion over the famine causes during a recent AEA session, where issues were raised and clarified, but participants did not reach a consensus. It is most likely that the debate will continue even after the publication of this symposium. In this article, we summarize and critically examine existing economic studies of the Great Leap crisis. First, by applying Sen's entitlement approach to famine, we make a conceptual clarification that, although a sharp reduction in per capita grain output may result in famine, it is only one of many possible causes. In China's context, other potential causes include the urban-biased food ration system, radical political and economic policies during the Great Leap Forward, and consumption inefficiency. Therefore, inquiry into famine causes differs from investigating reasons for the collapse of food supply. After this clarification, we discuss appropriate analytical frameworks and existing findings on the causes of the agricultural production collapse and of the famine. We argue that diversion of productive inputs away from agriculture and the reduction in production efficiency may both result in shortfalls in grain output. Existing empirical evidence principally supports the exit right hypothesis originally proposed by Lin (1990) that compulsory participation in the communes was the main cause for the sudden shortfall of grain output during the Great Leap and the low total factor productivity in the subsequent collectivization period. For the causation of famine, we present arguments that dispute consumption irrationality and political radicalism as the most critical causes of the famine. There are serious analytical shortcomings in these two hypotheses that cast doubt on the reliability of their empirical findings. However, empirical evidence supports the findings that urban bias in food allocation policies and grain output decline are the main causes of the excess deaths (Lin & Yang, 1996). We conclude by emphasizing the importance of further empirical analysis for future research. II. FACTUAL AND CONCEPTUALISSUES Scholars have generally agreed with the severity of production shortfall in the Great Leap crisis. The most commonly used statistics on grain output are released by China's State Statistical Bureau, which indicates yearly grain production of 195,200, 170, 144, 148, 160, and 170 million metric tons respectively for the years between 1957 and 1963. These numbers are generally consistent with other independent estimates. 3 The demographic catastrophe, however, was not known to scholars before the release of demographic data in the late 1970s. Therefore, many scholars praised the Chinese government's ability to avoid a famine in spite of a sharp production shortfall in the agricultural China' s Agricultural Crisis 127 crisis (see, for example, Perkins, 1966). Using the newly released 1964 and 1982 population census and supplemental birth and death registrations, Ashton et al. (1984) presented estimates on the impacts of famine on both mortality and fertility. Their calculations indicate that 30 million excess deaths occurred in China during the period 1958-62, and in the same period, the number of actual births fell short of the expected births by 33 million. Based on the 1982 one-per-thousand fertility survey, Peng (1987) provided a similar estimate on the total premature deaths of 23 million. Two earlier studies reported the number of excess deaths to be approximately 16.5 million (Coale, 1981) and of at least 23 million