Chinese farms - changing landscape. The seeds of private incentive have yielded new prosperity

FROM land redistribution, to collectivization, to people's communes, to the contract responsibility system - the ways of organizing Chinese agriculture in the past four decades have changed radically. The policy of the 1980s - a contract system that makes farmers individually responsible for grain production and gives them permission for sideline occupations - is now the pride and joy of the Chinese Communist Party, at least of its more pragmatic members. It has freed most rural communities from a subsistence-level existence, bringing prosperity, and sometimes wealth, to peasant farmers.

``The policy is now the best because we can do everything,'' said a mountain farmer in western Guangdong Province. ``It's hard to say whether the policy will change or not - that's up to higher authority. But we think the present policy is good.''

Many people in the rural areas would agree with this farmer. Along with economic data, such testimony has persuaded reluctant Communist Party leaders since the late '70s to endorse as national policy a market-oriented rural economy that operates largely beyond state control.

Rural income has tripled in eight years. In the more prosperous regions of eastern China, some 5 percent of the households earn more than 10,000 yuan ($2,700) each year. Recently, some super-rich families with annual incomes in excess of 100,000 yuan ($27,000) have appeared.

Much of the new prosperity comes from raising crops for sale on the open market, animal husbandry, fish ponds, and other so-called sideline work. Despite the diversion from raising rice and wheat, grain production reached a record high of 405 million tons in 1984. It slipped in 1985, bringing a warning from party conservatives that neglect of food production could result in social and political instability.

This year grain production is expected to be just below the 1984 record high, boosting storage levels and in many regions making it possible to use surplus grain to expand the dairy and beef cattle industries.

Agricultural policies remain controversial despite the favorable results. During a resurgence of anti-Western sentiment earlier this year, some critics within the party said the policies were antisocialist.

``Some people question the rural reform,'' the People's Daily, the party newspaper, commented early this summer. ``They think the contract system [for agriculture] undermines the foundation of a collective [socialist] economy and consider the development of a commodity [market] economy as capitalism. This is not true and runs against the wishes of million of farmers.''

The Communist Party under Deng Xiaoping, however, has vowed to stick with what works.

The commercialization of agriculture has not meant that life in China's rural areas is now easy. Arable land is scarce and too much water, or too little, is a permanent menace in many areas. Access to markets is uneven, and the lack of scientific know-how and modern equipment is widespread.

In China's vast hinterland, away from lucrative urban markets and modern transport, the traditional features of agriculture are barely changed. Individual landholdings are actually smaller than in the past, with plot sizes averaging 0.02 hectares (0.05 acres) per farm laborer. Chinese farms thus are a form of mass gardening rather than the kind of large-scale, agri-business found in the United States.