China's peasants chafe at restraints. After reaping bounty of cash crops, farmers reluctant to grow food grains

Gao Zongyun bent down and scooped up a handful of sandy earth from what used to be his 7-acre plot, letting the soil run slowly through his fingers. ``You see, this land isn't any good for growing grain,'' Mr. Gao said in the thick twang of a northern Chinese peasant. ``But for watermelon, cabbage, it's fine,'' he said, brushing off his tanned hands on a pair of blue cotton pants.

Last summer, Gao and a couple of friends harvested a bumper crop of watermelon from his farm on the outskirts of Peking, hiring trucks to haul the ripened fruit a short 35 miles to busy markets in the capital.

But this year, Gao has no land to till. After he refused to quit farming cash crops and join a collective drive to grow wheat, village officials canceled his lucrative, three-year land contract and distributed it to others.

Across China, new policies aimed at boosting the nation's grain output are facing resistance from peasants like Gao. The farmers know they can earn far more raising cash crops than growing grain for the state at below market prices.

The dilemma Chinese leaders face is how to guarantee a vast, cheap supply of grain for the nation's 200 million, price-conscious city dwellers while advancing economic reforms that have granted China's 800 million peasants greater freedom to decide what to farm.

``Grain production is a great problem for China's economic development,'' Premier Li Peng stressed during a June 10-16 inspection of Hebei Province, a prime wheat-growing region. ``We now face the major question of how to adapt the growth rate of grain production to that of our population.''

China initiated market-oriented agricultural reforms in the late 1970s, dismantling the ``people's communes'' established under Mao Tse-tung and allowing each peasant family to farm a small parcel of land.

In 1985, the government took the reforms further, granting farmers the right to enter into 15-year land contracts and substantial leeway in chosing what to grow.

Peking lifted quotas and fixed prices for many agricultural products, giving peasants like Gao an incentive to cultivate cash crops such as vegetables, fruits, and oil-bearing plants for sale at market prices.

But the state maintained quotas and below-market prices for grain, China's staple food. This discouraged farmers from planting grain, contributing to a sharp 7 percent drop in grain output in 1985. Grain production has recovered somewhat, but remains below the 1984 level of 407 million tons.

The fall in production ended China's brief tenure as a net grain exporter. Peking had to import a net 9.9 million tons of grain in 1987 and is expected to buy the same amount this year, according to a Western agricultural expert in Peking.

Alarmed by the declining rate of grain output, Chinese officials last fall announced new policies to boost production.

The policies involve recovering the peasants' tiny, individually contracted plots and regrouping them into large-scale, mechanized, grain cooperatives run by a few skilled farmers.

The leadership is testing the policies in the suburbs of major cities like Peking, Shanghai, Tianjin, and Canton, where peasants deprived of their contracted land may more easily find jobs in industry or commerce.

Shunyi County in suburban Peking, with a rural workforce of 220,000 people, is one of the experimental agricultural zones. A large portion of its farmland has been placed under grain cooperatives. Peking sets grain output targets for the county.

Last August, local officials in Shunyi's Changlin village, where Gao lives, effectively nullified the land contracts of all peasant households in Changlin, redistributing the villages' 100 acres of land to grain-farming cooperatives.

Gao, who holds a contract valid until September 1989, contested the move, arguing that the new policy contradicts Peking's often repeated pledge to uphold the legality of land contracts. ``I invested a lot in that land and I want to till it. But the local tyrants say the policy has changed and my contract is invalid,'' Gao said during a recent interview.

Gao pulled out a worn paperback entitled ``Required Reading for Specialized Households,'' on China's agricultural contract system. ``According to this book, the village leaders are wrong and I will fight to win,'' Gao said.

Gao's case brings into question Peking's wisdom in pushing large-scale, cooperative grain farming - especially against the peasants' will, according to Western agricultural experts and economists based in Peking.

``I'm not convinced that it's a rational policy,'' said a Western agricultural economist, requesting anonymity. ``The government's concern is to ensure access of the urban population to state price-controlled grain. But the farmers of Shunyi would probably be better off growing something else.''

Proximity to large urban markets makes it especially profitable for farmers like Gao to grow perishable fruits and vegetables. ``If the farmers had complete freedom, they would not be growing grain,'' the economist said.

Officials in Shunyi admit Gao's land is poor for wheat farming. ``But almost all the land in this area is of the same quality. Even on bad land, with water and fertilizer we can grow grain,'' said Mu Weixue, an official familiar with Gao's case.

Another difficulty with the government program to push grain production is that it threatens to undermine peasants' already shaky confidence in their land contracts. According to the official press, peasants are now reluctant to invest in fertilizers and are allowing their land to deteriorate.

``The peasants still have no firm confidence in the validity of land contracts,'' said an editorial in the official Peasants' Daily.

Rather than mandating cooperative grain cultivation, experts suggest that Peking should stick to a market approach, furthering reforms that have gradually raised the state purchase price for grain and permitted more market regulation of grain production.