Letter to the Standing Committee of the CPC Central Committee and Other Relevant Comrades on Resolving the Issue of Basic Accounting Units in Rural Areas (September 29, 1961)  To the Members of the Standing Committee and Other Relevant Comrades:  I am submitting herewith a letter from Geng Changsuo of the Wugong Commune in Shen County, Hebei Province [1]; one document from the Shandong Provincial Party Committee dated March 1961 concerning a symposium on contradictions between large and small production teams [2]; one report from the Hubei Provincial Party Committee dated September 25 [3]; one record of the Handan symposium held on September 26 or 27 [4]; and also a batch of materials from Hebei [ ]. Please review these documents carefully and have your assistants study them as well. We will then convene a meeting to discuss them.  These materials indicate that we have yet to fully resolve the serious problem of egalitarianism in agriculture; it remains an outstanding issue. As the peasants put it, the “Sixty Articles” are lacking precisely this one point. What is that point? It concerns the fact that production rights rest with the small team while distribution rights are concentrated in the brigade—namely, the so-called “three guarantees and one reward” system. Unless this problem is solved, the vigorous development of agriculture, forestry, animal husbandry, sideline industries, and fisheries will continue to be constrained, and the masses’ enthusiasm for production will remain dampened.  If we wish to achieve a more substantial increase in agricultural output in 1962 compared with 1961, we should address this issue at the December work conference this year [ ]. My view is: “Three levels of ownership, with the team as the foundation.” In other words, the basic accounting unit should be the team rather than the brigade. The so-called “unified leadership” by the brigade must be clearly defined; comrades in Hebei have specified nine such limits [7]. Without such stipulations, many of the eight rights vested in the teams [8] would remain empty, effectively seized once again by the brigades.  On this very subject, I distributed at the Guangzhou Conference in March of this year [9] a document from Shandong that vividly exposed this grave contradiction [10]. I also circulated a document from Guangdong detailing how a certain commune had been saddled with inflexible task quotas, appending a few remarks suggesting whether this practice could be extended nationwide [£±]. However, no decision was reached. Once you have examined the materials from Hubei, Shandong, Guangdong, and Hebei, and after we have discussed them together, I propose that these documents, accompanied by a letter from the Central Committee, be forwarded to all central bureaus, provincial, municipal, and district party committees, as well as prefectural and county party committees, instructing them to dispatch capable investigation and research teams to conduct field studies lasting two to three weeks. These teams are to hold several symposiums with representatives from the county, commune, brigade, team, and individual members, in order to determine which approach—brigade-level implementation of the “three guarantees and one reward” system, or a team-based model—is preferable. To stimulate the masses’ initiative in collective production and to substantially increase the output of grain, cotton, edible oil, hemp, silk, tea, sugar, vegetables, tobacco, fruits, medicinal herbs, miscellaneous crops, and livestock such as pigs, horses, cattle, sheep, chickens, ducks, and geese in the coming year and subsequent years, I believe there is no alternative but to proceed along this path. With regard to this issue, we have spent the past six years muddling through—a period that began with the establishment of advanced people’s communes in 1956—and now, in our seventh year, it is high time we came to our senses. It remains unclear who first devised this absurd “three guarantees and one reward” scheme, which has led to frequent disputes between large and small teams and between cadres and the masses, resulting in concealed underreporting of yields and private division of surplus, while the underlying tensions persist unaddressed. Some comrades contend that the “three guarantees and one reward” system has never truly been implemented. This serves as a severe lesson.  Mao Zedong  8:00 a.m., September 29, 1961  Printed from the manuscript. 5£¶

Notes  [1] Refers to a letter dated December 30, 1960, from Geng Changsuo, head of the Wugong Commune in Shen County, Hebei Province, to Tan Zhenlin, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council. In the letter, Geng Changsuo stated that the commune’s output in 1960 had fallen by more than 50 percent compared with 1959. Apart from natural disasters, this decline was also attributable to human factors: first, violations of the principles of adapting measures to local conditions and observing proper farming seasons. Low-stemmed crops were planted in waterlogged depressions, leading to reduced yields; following the wheat harvest, an excessively heavy sweet potato planting quota was imposed, interfering with weeding operations and leaving portions of land uncultivated or only partially cultivated. Second, Party policies were not earnestly implemented: procurement targets kept rising, while per capita food rations for commune members were continually cut, demoralizing the workforce and lowering the overall quality of agricultural labor. Regarding how to secure a bumper harvest next year and improve living standards, the commune members offered the following suggestions: 1) Firmly replace the current procurement policy, which assesses output based on individual plots, with a standardized acreage-based system. Under this new approach, each team would be assigned a standard acreage reflecting its soil type and irrigation conditions, and procurement targets would be set accordingly. Those yielding more would not face higher quotas, while those producing less would not receive lower ones; artificial losses would not result in reduced targets, and special cases due to exceptional circumstances would be handled individually. Within the production teams, a “four guarantees and one reward” system could be adopted, with no inter-team transfers of resources: greater effort would bring greater rewards, and lesser effort lesser rewards. 2) Strictly adhere to the principle of working among the masses and adapting to local conditions, placing trust in the people and conducting extensive investigations and studies. 3) Given that agriculture forms the foundation of the national economy, concrete measures must be taken to consolidate and strengthen this base. 4) Livestock exchanges should be promoted, and unnecessary restrictions preventing animals from moving between regions should be lifted.  [ ] refers to the “Opinions from a Symposium on Contradictions Between Large and Small Teams in the People’s Commune System,” compiled by the Rural Work Department of the Shandong Provincial Party Committee. The document originally appeared in No. 5 of “Rural Work Information,” published by the Shandong Provincial Party Committee Office on March 17, 1961, and was subsequently reprinted in the Central Party Committee Office’s “Briefing on Current Affairs.” See note 2 on page 60-4 of this volume.  [3] Refers to a request submitted by the Hubei Provincial Party Committee on September 25, 1961, to the Central South Bureau and the Central Committee, proposing a trial implementation of production teams as the basic accounting units, with a copy sent to Mao Zedong. The report notes that during the implementation of the Regulations on the Work of People’s Communes, some commune members and grassroots cadres raised the question: Is it better to take the production brigade as the basic accounting unit, or the production team? If the brigade were designated as the basic unit, it would be difficult to resolve the egalitarian tendencies among the various production teams—the conflict between poor and rich teams. As early as June of this year, at a province-wide conference of cadres at all three levels, the idea of using production teams as the basic accounting units had already been put forward. Following the meeting, the Xiaogan Prefectural Party Committee and the Jingmen County Party Committee initiated pilot projects. The approach involved abolishing the “three guarantees and one reward” system; apart from remitting a fixed percentage of their income to the brigade for accumulation funds, public welfare funds, and administrative expenses, all remaining revenue would be retained by the production teams for their own allocation. National procurement targets would be set at the brigade level and then apportioned to the individual teams, without any redistribution among them. The experience gained from these trials demonstrated that this arrangement resolved the contradiction between production being carried out at the team level and distribution occurring at the brigade level, fundamentally overcoming egalitarian practices among teams, more effectively implementing the principle of “he who works harder earns more,” and thereby boosting both team and individual member morale. It also encouraged teams to manage resources prudently, operate communes economically, take good care of farm implements, and develop draft animal power. Moreover, it helped strengthen mutual trust among team members and promote democratic management within the teams, allowing brigade-level cadres to devote more time and energy to ideological and political education. Apparently, given the still-backward state of agricultural tools, the dispersed nature of rural settlements, and the fact that most routine agricultural activities are confined to the boundaries of individual production teams, adopting the production team as the basic accounting unit may be more conducive to agricultural development, while also better suiting the current level of experience, awareness, and cultural attainment of commune members and grassroots cadres. The provincial committee believes that the arguments put forward by those advocating for production teams as the basic accounting units are well-founded and requests permission to further expand the pilot program. The request was accompanied by materials from the Xiaogan Prefectural Party Committee Working Group’s August 12 investigation into the Jinxiu Brigade in Wuchang County, which had been piloting the use of production teams as the basic accounting units, as well as by reports from the Jingmen County Party Committee Working Group on the Jingshan Brigade’s expanded trial of team-based accounting.  [4] Refers to the minutes of a symposium convened by Mao Zedong in Handan on September 27, 1961, see page 62-5 of this volume.  [ ] represents a collection of five documents from Hebei Province. The first is an investigative report prepared by a working group of the Hebei Provincial Party Committee and submitted to the provincial committee on August 17, 1961. The report details the group’s findings regarding the practice of “large-scale contracting” in the Baoding area: (1) Large-scale contracting is simple and easy to implement, enjoying broad support from both commune members and grassroots cadres. Specifically, the brigade calculates the total amount to be withheld for unified allocation and use based on the annual income plan, dividing this sum into two parts—one to be remitted to the brigade for centralized management and another to be retained by the production teams without requiring uniform redistribution. The portion to be turned over to the brigade is apportioned equally among all teams according to fixed standards and remains unchanged. National procurement targets are likewise shared equally by all teams. After deducting the amounts to be remitted to the brigade and the state, the remaining operating and grain revenues are freely allocated by each team. Teams with higher incomes distribute larger shares while contributing less to the common pool, whereas those with lower incomes receive smaller allocations despite bearing a heavier share of the burden. (2) Large-scale contracting is more rational than the “three guarantees and one reward” system, more consistent with the principle of distribution according to work performed, and more effective in stimulating the production enthusiasm of teams and the broader commune membership. (3) Implementing large-scale contracting not only reflects the legitimate differences among teams but also aligns with the principle of unified accounting and distribution at the brigade level. The report also includes relevant survey materials pertaining to the Zhangxiankou Brigade, Zhongxiankou Brigade, and Shuitou Brigade of the Donglong Commune in Tang County, as well as to the Donglugang Brigade of the Han Village Commune in Baoding City, the Ai River Brigade of the Shifo Commune in Laiyuan County, the brigade within Mancheng County town, and the Xigaozhuang Brigade of the Songlintian Commune in Zhuo County. The second document is a report submitted by the Baoding Prefectural Party Committee to the Hebei Provincial Party Committee on September 8, 1961, concerning large-scale contracting. The report notes that during publicity and implementation of the Sixty Articles on Agriculture, it was discovered that certain brigades were practicing a method distinct from the “three guarantees and one reward” system, which they termed “large-scale contracting.” In brigades employing this approach, problems associated with the “Five Winds” were minimal, production steadily increased, and living standards improved significantly. The practical experience of these teams demonstrates that large-scale contracting is indeed an appropriate means of managing internal relations within brigades, consistent with the fundamental system of the people’s commune—collective ownership at three levels, with the brigade as the primary unit of ownership. Its essence lies in more clearly delineating the respective spheres of management authority between the brigade and the teams, appropriately expanding the economic autonomy of the teams, more thoroughly implementing the principle of “recognizing differences and rewarding hard work,” and thereby avoiding egalitarian tendencies among teams. The third document is a brief summary prepared by a working group of the Hebei Provincial Party Committee on August 18, 1961, regarding the implementation of large-scale contracting by the Zhangxiankou Brigade of the Donglong Commune in Tang County. The fourth document is a report submitted by the Zhangjiakou Prefectural Party Committee to the acting First Secretary of the Hebei Provincial Party Committee, Liu Zihou, on August 25, 1961, concerning a trial application of large-scale contracting to income distribution within a people’s commune. The report states that in late March of that year, the prefectural committee approved a pilot project at the Guoleizhuang Brigade of the Guoleizhuang People’s Commune in Huaian County, resulting in a 26.93 percent increase in total grain output and a 21.2 percent rise in collective income compared with the previous year. Commune members overwhelmingly requested that the large-scale contracting agreement be renewed for an even longer term, ideally for at least three years without change. The fifth document is a grain contracting agreement drawn up in 1961 by the Liangcun Production Team of the Gangshang Commune in Gaocheng County, Hebei Province, under the “three guarantees and one reward” system. This contract comprises three voluminous tables filled with numerous items, along with provisions for rewards and punishments. A provincial working group described it as “a few pages steeped in tedious formalism.”  [6] Refers to the Central Committee Work Conference held in Beijing from December 20, 1961, to January 10, 1962.  [7] See pages 562–564 of this volume, containing the “Handan Talk Meeting Minutes.”  [8] According to Article 29 of the “Regulations on the Work of People’s Communes (Revised Draft)” issued by the Central Committee on June 19, 1961: “Production teams shall enjoy a certain degree of autonomy in managing their own affairs. Provided they fulfill their contracted production targets, they have the right to select crops and planting times based on local conditions; to arrange agricultural tasks; to decide on measures to increase production; to retain and manage their own seeds; to adjust their labor quotas; and, without compromising soil and water conservation or damaging forests, grasslands, and pastures, to reclaim wasteland, cultivate barren hills, and make full use of all available land within their jurisdiction. They may also utilize idle agricultural time to engage in various sideline production activities.”  [9] Refers to the Central Committee Work Conference held in Guangzhou from March 15 to 23, 1961.  [10] Likely refers to the document mentioned in note 2 above, namely the “Opinions from a Symposium on Contradictions Between Large and Small Teams in the People’s Commune System,” compiled by the Rural Work Department of the Shandong Provincial Party Committee. Mao Zedong appended a comment to this document on March 29, 1961, as recorded on page 460 of this volume under the heading “Remarks on the Briefing Regarding the Symposium on Commune System Issues Held in Shandong.”  [£±] See page £´ 5 of this volume, containing “Comments on the Trial Implementation of a Team-Based Task Quota Adjustment System at the Lixi Brigade in Nanhai County.”  [12] On October 7, 1961, the Central Committee issued instructions to all central bureaus and provincial, municipal, and district party committees concerning the issue of basic accounting units in rural areas. See note 1 on page .