The Economic Joumal 110(Januar), 136-158. C Royal Economic Society 2000. Published by Blackwell Publishers, 108 Cowley Road, Oxford Ox4 F, UK and 350 Main Street, Malden, MA O2148, USA FOOD AVAILABILITY. ENTITLEMENTS AND THE CHINESE FAMINE OF 1959-61* Justin Yifu Lin and Dennis Tao Yang Food availability decline and Sens entitlement are two leading appro understanding causes of famine. Previous research based on case studies has give ach approach. This paper analyses the Chinese famine of 1939-61 by considering jointly th rban bias and the decline in food availability as causes. We find that both factors contributed significantly to the increase in death rates during this famine. To our knowledge, this paper is the first econometric study to assess the importance of famine causes using the entitlement approach The problem of famines and food shortages has received much attention from economists because such crises continue to occur despite persistent progress in agricultural production technology. The traditional approach to famine analysis, which dates back to the writings of Adam Smith and Malthus, proposes that famines are primarily caused by a sudden decline in food availability (FAD). For example, a war or a natural calamity may decimate agricultural production in a particular geographic region and result in spread food shortages that lead to famine. This supply-based FAD accour an accepted explanation for famines before the influential work of Sen 1981a, b), who proposed a more general entitlement approach. Sen empha- sised that famine was a situation in which a significant number of people in a region failed to acquire enough food to eat. While a shortage in per capita food output may cause famine, it is only one of many possible causes. In his studies of several well known historical famines. Sen found that famines occurred even when per capita food output was maintained. Famines resulted either from sudden collapses in the endowments of population subgroups or from dra- matic changes in relative prices, which caused some of the population to fail to acquire enough food While the entitlement approach has been accepted by many famine analysts proponents of the FAD approach have offered criticism. Instead of examining food availability at aggregate levels as Sen did, opponents emphasise local supply conditions. They argue that crop failures due to natural calamities often result in high food prices because of supply shortages, speculative behaviour, increased demand to deal with uncertainty, and sales of possessions to obtain food. Ultimately, the poor and those who are negatively affected by bad weather become famine victims because of reduced purchasing power. Since indebted to the participants in thos rs for their Robert marshall. Martin Ravallion I See, for example, Seaman and Holt(1980), Cutler(1984)and Bowbrick(1986). Ravallion(1997) provides a comprehensive description of the entitlements approach and its critics
FOOD AVAILABILITY, ENTITLEMENTS AND THE CHINESE FAMINE OF 1959±61 Justin Yifu Lin and Dennis Tao Yang Food availability decline and Sen's entitlement are two leading approaches in understanding causes of famine. Previous research based on case studies has given independent support to each approach. This paper analyses the Chinese famine of 1959±61 by considering jointly the urban bias and the decline in food availability as causes. We ®nd that both factors contributed signi®cantly to the increase in death rates during this famine. To our knowledge, this paper is the ®rst econometric study to assess the importance of famine causes using the entitlement approach. The problem of famines and food shortages has received much attention from economists because such crises continue to occur despite persistent progress in agricultural production technology. The traditional approach to famine analysis, which dates back to the writings of Adam Smith and Malthus, proposes that famines are primarily caused by a sudden decline in food availability (FAD). For example, a war or a natural calamity may decimate agricultural production in a particular geographic region and result in widespread food shortages that lead to famine. This supply-based FAD account was an accepted explanation for famines before the in¯uential work of Sen (1977, 1981a,b), who proposed a more general entitlement approach. Sen emphasised that famine was a situation in which a signi®cant number of people in a region failed to acquire enough food to eat. While a shortage in per capita food output may cause famine, it is only one of many possible causes. In his studies of several well known historical famines, Sen found that famines occurred even when per capita food output was maintained. Famines resulted either from sudden collapses in the endowments of population subgroups or from dramatic changes in relative prices, which caused some of the population to fail to acquire enough food. While the entitlement approach has been accepted by many famine analysts, proponents of the FAD approach have offered criticism.1 Instead of examining food availability at aggregate levels as Sen did, opponents emphasise local supply conditions. They argue that crop failures due to natural calamities often result in high food prices because of supply shortages, speculative behaviour, increased demand to deal with uncertainty, and sales of possessions to obtain food. Ultimately, the poor and those who are negatively affected by bad weather become famine victims because of reduced purchasing power. Since The Economic Journal, 110 ( January), 136±158. # Royal Economic Society 2000. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF, UK and 350 Main Street, Malden, MA 02148, USA. [ 136 ] An earlier version of this article was presented at Chicago, Duke, Hong Kong University of Science and Technology, and University of North Carolina. We are indebted to the participants in those seminars for their insightful comments. We are also grateful to Robert Marshall, Martin Ravallion, Dudley Wallace, and especially Costas Meghir and an anonymous referee for helpful suggestions. 1 See, for example, Seaman and Holt (1980), Cutler (1984) and Bowbrick (1986). Ravallion (1997) provides a comprehensive description of the entitlements approach and its critics.
LJANUARY 2000 THE CHINESE FAMINE OF 1959-61 137 crop failures initiate the chain of effects, the proponents of this approach argue that the best way to understand famines is to look at what happened food availabil Although Sen has amply demonstrated that famine could occur without reduction in per capita food supply, his measures of availability are defined at either national or highly aggregated regional levels, which may not directl refute the propositions of FAD proponents who emphasise local conditions. A formal assessment of the entitlement approach is further obstructed by other data limitations, such as the lack of records on personal property and detailed market commodity prices. More importantly, previous research has not meas ured separately the contributions of food supplies and other entitlement arrangements to a famine. As a result, we still do not know the relative importance of the famine causes o In this paper, we analyse the Chinese famine of 1959-61, where the drop in od availability and different arrangements of rights to food were both important factors. Under the centrally planned regime, China had an effective, urban-biased ration system in which city residents were given legally protecte rights to acquire a certain amount of food. In contrast, compulsory grain procurement quotas were imposed on the farmers. As a result, farmers were entitled only to the residual grain. In years of poor harvest, there was barely enough grain left in the village for the farmers after they fulfilled the quotas During the Great Leap Forward in 1959-61, Chinese agricultural production collapsed because of a sudden institutional change, natural calamities and a series of policy mistakes. The grain output dropped by 15%o in 1959 and reached only about 70% of the 1958 level in 1960 and 1961. Careful studies of the newly released data reveal that this crisis resulted in widespread famines and caused about 28-30 million excess deaths (Peng, 1987 and Ashton et aL. 1984). To analyse this catastrophe, we apply Sens entitlement approach to the centrally planned system. We formulate a framework that is amenable to empirical testing and that simultaneously considers per capita food supply and the right to food as determinants of famine. A panel data set for 28 Chinese provinces for the period 1954-66 is used for the empirical analysis. We use the percentage of rural population and pe capita grain output in a province as proxies for the degree of urban bias and 2 Sen's entitlement approach de food availability decline as a cause famine. What the entitlement approach opposes is to take food availability as the See Osmani(1995) for further discussions on the differences between the FAD approach and the entitlement approach. We owe this clarification referee 3 Due to data limitations, Sen(1981a)used national per capita grain output as the indicator for food ailabil of Ethiopian and Bangladeshi famines. Presumably, per capita food supply region is a more relevant indicator. For the great Bengali famine, Sen used food availability for the district, a more local indicator, as per capita availability measures. However, Bowbric questioned the reliability of the production figure Our focus is on the causation of famine. See Coate and Ravallion (1993) for discussions on insurance arrangements and Dreze and Sen (1989, 1990)for the role of government prevention and relief. Economic Society 2000
crop failures initiate the chain of effects, the proponents of this approach argue that the best way to understand famines is to look at what happened to food availability.2 Despite the clarity of views at the theoretical level, the usefulness of the two approaches has not yet been rigorously examined in empirical analysis. Although Sen has amply demonstrated that famine could occur without a reduction in per capita food supply, his measures of availability are de®ned at either national or highly aggregated regional levels, which may not directly refute the propositions of FAD proponents who emphasise local conditions.3 A formal assessment of the entitlement approach is further obstructed by other data limitations, such as the lack of records on personal property and detailed market commodity prices. More importantly, previous research has not measured separately the contributions of food supplies and other entitlement arrangements to a famine. As a result, we still do not know the relative importance of the famine causes. In this paper, we analyse the Chinese famine of 1959±61, where the drop in food availability and different arrangements of rights to food were both important factors. Under the centrally planned regime, China had an effective, urban-biased ration system in which city residents were given legally protected rights to acquire a certain amount of food. In contrast, compulsory grain procurement quotas were imposed on the farmers. As a result, farmers were entitled only to the residual grain. In years of poor harvest, there was barely enough grain left in the village for the farmers after they ful®lled the quotas. During the Great Leap Forward in 1959±61, Chinese agricultural production collapsed because of a sudden institutional change, natural calamities and a series of policy mistakes. The grain output dropped by 15% in 1959 and reached only about 70% of the 1958 level in 1960 and 1961. Careful studies of the newly released data reveal that this crisis resulted in widespread famines and caused about 23±30 million excess deaths (Peng, 1987 and Ashton et al. 1984). To analyse this catastrophe, we apply Sen's entitlement approach to the centrally planned system. We formulate a framework that is amenable to empirical testing and that simultaneously considers per capita food supply and the right to food as determinants of famine.4 A panel data set for 28 Chinese provinces for the period 1954±66 is used for the empirical analysis. We use the percentage of rural population and per capita grain output in a province as proxies for the degree of urban bias and 2 Sen's entitlement approach does not oppose food availability decline as a cause (hypothesis) for famine. What the entitlement approach opposes is to take food availability as the only cause for famine. See Osmani (1995) for further discussions on the differences between the FAD approach and the entitlement approach. We owe this clari®cation to an anonymous referee. 3 Due to data limitations, Sen (1981a) used national per capita grain output as the indicator for food availability in the study of Ethiopian and Bangladeshi famines. Presumably, per capita food supply in a famine region is a more relevant indicator. For the great Bengali famine, Sen used food availability ®gures for the district, a more local indicator, as per capita availability measures. However, Bowbrick (1986) questioned the reliability of the production ®gures. 4 Our focus is on the causation of famine. See Coate and Ravallion (1993) for discussions on insurance arrangements and Dreze and Sen (1989, 1990) for the role of government in famine prevention and relief. # Royal Economic Society 2000 [ JANUARY 2000] 137 THE CHINESE FAMINE OF 1959±61
138 THE ECONOMIC JOURNAL LJANUARY the extent of food availability, respectively, in that province and assess their contributions to the observed cross-province differences in death rates. We find that, in normal years, the cross-province differences in the variables did not result in cross-province differences in death rates. However, in the famine period of 1959-61, both variables contributed significantly to the observed inter-provincial differences in mortality rates. To our knowledge, this paper is the first serious econometric study to assess the relative importance of famine causes using the entitlement approach. I. China's food procurement and entitlement In the entitlement approach, Sen (1981a, b) proposes that the acquisition problem is central to questions of hunger and starvation in the modern world Consider a person's endowment vector x, which may include the possession of land, labour services, health conditions, and the ownership of other proper ties. The person may produce his own food based on initial endowment, or he may exchange possessions in the market for a consumption bundle that includes food. This person starves if he fails to obtain enough food. This may occur either through a fall in the endowment vector x(direct entitlement failure), or through an unfavourable shift in the terms of exchanging proper ties for food(trade entitlement failure). Consequently FAD is not a necessary condition for famine. Towards testing his propositions, Sen recognised that there could be ambiguities in the specification of entitlement, and this problem could be compounded by data limitations. Instead of conducting statistical analysis, Sen relied heavily on the indices of rice-exchange rates and the price ratios of other products or services to rice as major indicators of changing entitlement relations. He found that sharp declines in the food- exchange rates for people in selected occupations explained many of the In contrast to the market environment where sen laid out his entitlement theory and applications, China had a planned economic structure where the cquisition and distribution of food were directly controlled by the central government. Rural people had to deliver quotas to procurement agencies at prices set by the government. A food rationing system existed in cities where urban residents had protected legal rights for certain amount of grain consumption. In this planned setting, Sens entitlement approach is still appropriate for understanding the causes of famine In the wake of the founding of the People's Republic in 1949, an in-kind gricultural tax was the main vehicle by which the state acquired grain from evolution with FAD approaches, see Osm uilibrium, for instance, entitle be well defined characterisations of a pers for additional explanation 7 In addition to Sen, Ravallion(1987)and Dyson( 1991)analysed higher food prices as a proximate C Royal Economic Society
the extent of food availability, respectively, in that province and assess their contributions to the observed cross-province differences in death rates. We ®nd that, in normal years, the cross-province differences in the variables did not result in cross-province differences in death rates. However, in the famine period of 1959±61, both variables contributed signi®cantly to the observed inter-provincial differences in mortality rates. To our knowledge, this paper is the ®rst serious econometric study to assess the relative importance of famine causes using the entitlement approach. 1. China's Food Procurement and Entitlement In the entitlement approach, Sen (1981a,b) proposes that the acquisition problem is central to questions of hunger and starvation in the modern world. Consider a person's endowment vector x, which may include the possession of land, labour services, health conditions, and the ownership of other properties. The person may produce his own food based on initial endowment, or he may exchange possessions in the market for a consumption bundle that includes food. This person starves if he fails to obtain enough food. This may occur either through a fall in the endowment vector x (direct entitlement failure), or through an unfavourable shift in the terms of exchanging properties for food (trade entitlement failure). Consequently FAD is not a necessary condition for famine.5 Towards testing his propositions, Sen recognised that there could be ambiguities in the speci®cation of entitlement, and this problem could be compounded by data limitations.6 Instead of conducting statistical analysis, Sen relied heavily on the indices of rice-exchange rates and the price ratios of other products or services to rice as major indicators of changing entitlement relations. He found that sharp declines in the foodexchange rates for people in selected occupations explained many of the famines.7 In contrast to the market environment where Sen laid out his entitlement theory and applications, China had a planned economic structure where the acquisition and distribution of food were directly controlled by the central government. Rural people had to deliver quotas to procurement agencies at prices set by the government. A food rationing system existed in cities where urban residents had protected legal rights for certain amount of grain consumption. In this planned setting, Sen's entitlement approach is still appropriate for understanding the causes of famine. In the wake of the founding of the People's Republic in 1949, an in-kind agricultural tax was the main vehicle by which the state acquired grain from 5 For an assessment of the entitlement approach that describes its conceptual apparatus, the evolution of Sen's analysis, and the contrast with FAD approaches, see Osmani (1995). 6 In the absence of a market-clearing equilibrium, for instance, entitlement may not be well de®ned. There is also a great deal of ambiguity in characterisations of a person's possessions. See Sen (1981b) for additional explanations. 7 In addition to Sen, Ravallion (1987) and Dyson (1991) analysed higher food prices as a proximate cause of food entitlement collapse. 138 [ THE ECONOMIC JOURNAL JANUARY # Royal Economic Society 2000
2000 THE CHINESE FAMINE OF 1959-61 areas 8 Grain markets existed alongside the state grain distribu system. In 1953, the central government introduced a system of Unified Procurement and Unified Sale for grain and oil-bearing crops, which broug procurement and distribution under its direct control, as a way to suppress food prices. Interprovincial grain trade by private traders was virtually eliminated. Accompanying the Unified Procurement and Unified Sale was rigid household registration system, which deprived the rural population of the right to move to urban areas and thereby put the country-to-city migration under the government's tight control. The aim of these schemes was to extract as much agricultural surplus as possible to facilitate the heavy-industry-oriented development strategy that had resulted in an increased demand for grain and other agricultural products for urban food consumption and exports. Under Unified Procurement and Unified Sale, the central government set the target for purchase of grain nationwide before a production season began. The target depended on the planned urban consumption needs, urban reserves, indus- trial materials and international trade. The target filtered down through provinces and lower levels of government until it reached the basic production units and became mandatory quotas. The quotas specified the quantity of ompulsory deliveries as well as their prices set by the state. When quotas were fulfilled, peasants were free to sell the remaining surplus to the state procure- nent departments or at state-regulated grain markets. In practice, however, because the state often procured to the maximum possible extent, farmers were left with little surplus(Walker, 1984) After harvests, grain procurement agencies in each locality collected the quotas and delivered the grain to the state. The central government then distributed the grain to the urban population in each province at subsidised prices. To control urban food demand and to facilitate the distribution of food targeted groups, food ration coupons were introduced in 1954(Walker, 984). In August 1955 the government established a more formal system and et up ration standards according to age, employment and other demographic characteristics. In subsequent years, the ration norms were adjusted, and the scope of rationing was extended to other agricultural products, including soy beans, coarse grains, cotton cloth, edible oil, and pork. cultural taxes were used by the government as 1938 in the Shansi-Gansu- Ningxia liberated Perkins, 1966). The rate was set at 12% normal yield in the early 1950s. The ate fell to 1970 and then to 5% in 1978(Perkins an f, 1984). The share of grain acquired through taxes declined over time in total grain procurement. The demand came from several sources. First, the urban population increased dramatically from 57.65 million in 1949, to 71.63 million in 1952, and to 99. 49 million in 1957. Second. since over 70% of <ports had been agricultural and processed agricultural products before the mid-1970s, the apacity to import capital goods for ind th of agricul riculture was the main source of raw materials for many industries, such as textiles and food For example, in 1956 the ion of grain for unusually hard labourers ranged between 22.5 and 27.5 kilograms (kg) wit al average of 25 kg: d labourers, it ranged betweer 17.5and22k d between 13 kg and 17 kg with ween 12 kg and 14.5 kg with a ational average of and high school it ranged between 13 kg and of 16 en,1982,p.206) c Royal Economic Society 2000
rural areas.8 Grain markets existed alongside the state grain distribution system. In 1953, the central government introduced a system of Uni®ed Procurement and Uni®ed Sale for grain and oil-bearing crops, which brought all grain procurement and distribution under its direct control, as a way to suppress food prices. Interprovincial grain trade by private traders was virtually eliminated. Accompanying the Uni®ed Procurement and Uni®ed Sale was a rigid household registration system, which deprived the rural population of the right to move to urban areas and thereby put the country-to-city migration under the government's tight control. The aim of these schemes was to extract as much agricultural surplus as possible to facilitate the heavy-industry-oriented development strategy that had resulted in an increased demand for grain and other agricultural products for urban food consumption and exports.9 Under Uni®ed Procurement and Uni®ed Sale, the central government set the target for purchase of grain nationwide before a production season began. The target depended on the planned urban consumption needs, urban reserves, industrial materials and international trade. The target ®ltered down through provinces and lower levels of government until it reached the basic production units and became mandatory quotas. The quotas speci®ed the quantity of compulsory deliveries as well as their prices set by the state. When quotas were ful®lled, peasants were free to sell the remaining surplus to the state procurement departments or at state-regulated grain markets. In practice, however, because the state often procured to the maximum possible extent, farmers were left with little surplus (Walker, 1984). After harvests, grain procurement agencies in each locality collected the quotas and delivered the grain to the state. The central government then distributed the grain to the urban population in each province at subsidised prices. To control urban food demand and to facilitate the distribution of food to targeted groups, food ration coupons were introduced in 1954 (Walker, 1984). In August 1955 the government established a more formal system and set up ration standards according to age, employment and other demographic characteristics.10 In subsequent years, the ration norms were adjusted, and the scope of rationing was extended to other agricultural products, including soy beans, coarse grains, cotton cloth, edible oil, and pork. 8 Agricultural taxes were used by the government as early as 1938 in the Shansi-Gansu-Ningxia liberated regions (Perkins, 1966). The rate was set at 12% of the `normal' yield in the early 1950s. The rate fell to 6% in 1970 and then to 5% in 1978 (Perkins and Yusuf, 1984). The share of grain acquired through taxes declined over time in total grain procurement. 9 The demand came from several sources. First, the urban population increased dramatically from 57.65 million in 1949, to 71.63 million in 1952, and to 99.49 million in 1957. Second, since over 70% of China's exports had been agricultural and processed agricultural products before the mid-1970s, the country's capacity to import capital goods for industrialisation depended on the growth of agriculture. Third, agriculture was the main source of raw materials for many industries, such as textiles and food processing. 10 For example, in 1956 the monthly ration of grain for unusually hard labourers ranged between 22.5 and 27.5 kilograms (kg) with a national average of 25 kg; for hard labourers, it ranged between 17.5 and 22 kg with a national average of 20; for light labourers, it ranged between 13 kg and 17 kg with a national average of 16 kg; for white collar employees, it ranged between 12 kg and 14.5 kg with a national average of 14 kg; and for college and high school students, it ranged between 13 kg and 16.5 kg with a national average of 16 kg (Chen, 1982, p. 206). 2000] 139 THE CHINESE FAMINE OF 1959±61 # Royal Economic Society 2000
140 THE ECONOMIC JOURNAL LJANUARY The urban consumption rations were matched closely with the e rural compu sory quotas. The former represented protected legal rights for city residents and the latter represented coercive burdens on the rural people. Under the procurement and ration system, there were serious conflicts between the government and the peasantry. Since the government gave priority to ind ial development, it pursued a heavy procurement policy to feed the expand- ing city population, to provide raw materials, to accumulate city grain stocks and to export grain for foreign exchange. However, more grain acquisition implied a greater extraction from agriculture, which unavoidably created strong opposition. Despite conflicts, the government was always successful in acquiring grain for cities, relying on effective administrative and political methods . A production unit's mandatory quota, specified prior to an agricultural season,generally depended on the production unit's normal outputs in previous years and its current consumption needs. In normal years, farm households would be left with enough food to meet subsistence needs. If the decline in grain output was a local phenomenon, the national or provincial government might reduce quota obligations or even deliver grain relief to the farm households in the areas with bad harvests. However if there was a severe reduction in food supply nationwide, rural people would endure most of the consequences, and a famine was likely to occur in rural areas because the government's predominant concern was urban food supply. Given the above institutional arrangements in China, local food output declines and the urban- biased grain distribution system could be the fundamental causes of the Chinese famine 14 The above discussions give useful hints for identifying proxies and bservations for analysing the relative importance of famine causes in the Chinese context. First, the entitlement was related to a household,'s legal status as urban or rural. The urban households were entitled to grain rations guaranteed by the state, whereas the rural households had the right only to the residual grain supply after fulfilling quota obligations. Second, the relative i Walker(1984)provided various accounts of rural opposition to the Unified Purchase and Unified ale schedule. Crimes were committed against the coercive acquisition and people who were sible for the crimes were sentenced, with penalties including imprisonment and even death. The bility caused by grain procurement caught the attention of Mao Tse-tung who expressed concerns his writings. Mao(1967) recorded: 'Old women blocked the road and would not allow the grain to taken away.'and.. At the time you(Minister of Agriculture) said there was no grain problem but i said there was 12 For instance, the formation of large-scale agricultural organisations enhanced the control adres over large quantities of grain. To achieve promotions, the cadres had incentives to trocurement policies. As noted by Perkins and Yusuf (1984, p. 4), the foremost feature of China development has been the gowernment's capacity to implement village-level programmes on a wide basis through bureaucratic and party channels. 1s Similar urban-biased food distributi rangements were also observed in fomer ocialist countries in Eastern Europe and former Soviet Union. 'In years of poor harvest even seeds for the next year and foodstuff for the farmers'own consumption were barely left in the village. ( Kornai, 1986, 1071-2) e an interesting contrast between India and China. He observed that China was more successful in eliminating malnutrition for the population while India had a better record in avoiding major famines. Sen attributed these observations to differences in political institution C Royal Economic Society 2000
The urban consumption rations were matched closely with the rural compulsory quotas. The former represented protected legal rights for city residents and the latter represented coercive burdens on the rural people. Under the procurement and ration system, there were serious con¯icts between the government and the peasantry. Since the government gave priority to industrial development, it pursued a heavy procurement policy to feed the expanding city population, to provide raw materials, to accumulate city grain stocks and to export grain for foreign exchange. However, more grain acquisition implied a greater extraction from agriculture, which unavoidably created strong opposition.11 Despite con¯icts, the government was always successful in acquiring grain for cities, relying on effective administrative and political methods.12 A production unit's mandatory quota, speci®ed prior to an agricultural season, generally depended on the production unit's normal outputs in previous years and its current consumption needs. In normal years, farm households would be left with enough food to meet subsistence needs. If the decline in grain output was a local phenomenon, the national or provincial government might reduce quota obligations or even deliver grain relief to the farm households in the areas with bad harvests. However, if there was a severe reduction in food supply nationwide, rural people would endure most of the consequences, and a famine was likely to occur in rural areas because the government's predominant concern was urban food supply.13 Given the above institutional arrangements in China, local food output declines and the urbanbiased grain distribution system could be the fundamental causes of the Chinese famine.14 The above discussions give useful hints for identifying proxies and units of observations for analysing the relative importance of famine causes in the Chinese context. First, the entitlement was related to a household's legal status as urban or rural. The urban households were entitled to grain rations guaranteed by the state, whereas the rural households had the right only to the residual grain supply after ful®lling quota obligations. Second, the relative 11 Walker (1984) provided various accounts of rural opposition to the Uni®ed Purchase and Uni®ed Sale schedule. Crimes were committed against the coercive acquisition and people who were responsible for the crimes were sentenced, with penalties including imprisonment and even death. The instability caused by grain procurement caught the attention of Mao Tse-tung who expressed concerns in his writings. Mao (1967) recorded: `Old women blocked the road and would not allow the grain to be taken away ...' and ` ... At the time you (Minister of Agriculture) said there was no grain problem but I said there was.' 12 For instance, the formation of large-scale agricultural organisations enhanced the control of rural cadres over large quantities of grain. To achieve promotions, the cadres had incentives to enforce procurement policies. As noted by Perkins and Yusuf (1984, p. 4), the foremost feature of China's rural development has been the government's capacity to implement village-level programmes on a nationwide basis through bureaucratic and party channels. 13 Similar urban-biased food distribution arrangements were also observed in former socialist countries in Eastern Europe and former Soviet Union. `In years of poor harvest even seeds for the next year and foodstuff for the farmers' own consumption were barely left in the village.' (Kornai, 1986, pp. 1071±2). 14 Sen (1983) made an interesting contrast between India and China. He observed that China was more successful in eliminating malnutrition for the population while India had a better record in avoiding major famines. Sen attributed these observations to differences in political institutions. 140 [ THE ECONOMIC JOURNAL JANUARY # Royal Economic Society 2000
2000 THE CHINESE FAMINE OF 1959-61 14l price of grain to other commodities had limited power in explaining starvation in China because grain was rationed in urban areas and the grain market in rural areas during a famine was too thin to be meaningful. Third, because interprovincial grain trade by private traders was prohibited and the central verne nt did not have the capacity to deliver relief to rural areas during the period of a sharp decline in grain output nationwide, the subsistence of farmers in a province during that period depended on the food production in that province. These specific institutional arrangements provide a convenient way to tes he validity of FAD or entitlement as an appropriate approach for under standing famines. The per capita grain output in a province can be used as the proxy for food availability in that province. If FAD is the appropriate approach food availability would be the only variable responsible for the famine deaths In the Chinese setting, a persons entitlement to food was legally determined by his/her residence status. The proportion of rural population in a province represented the proportion of population in that province who did not h legally protected rights to food. It is a proxy for the degree of urban bias in that province. If Sens entitlement approach is the right framework to under- stand the causes of a famine, the urban bias might also be a significant variable in determining famine deaths in addition to food availability To be specific, the hypothesis we seek to test in the regression analysis can be summarised as follows In a famine in China, the death rate in a province is positively related to the proportion of rural population in that province (urban bias hypo- thesis) and negatively related to per capita grain output in that province (food availability hypothesis) We will use the serious famine that occurred in 1959-61 in china as our ase study. In the next section, we document grain production declines, issues of procurement, and the resulting famine. In Section 3, we conduct a statistical assessment of the relative effects of food availability and urban bias on the observed deaths from this human disaster 2. Collectivisation and Demographic Crisis: 1959-61 Chinas agricultural collectivisation started in 1952. The farming institution was changed from household farms to mutual aid teams, to elementary operatives and then to advanced cooperatives that consisted of about 150 households. The advanced cooperative was the major farming institution by 1957. Agricultural output increased continuously in the period 1952-7 with an average annual growth rate of 4.6%. Encouraged by this success, the Commu- nist party decided to adopt a bolder approach to mobilise surplus labour to re a household's property and exchange c Royal Economic Society 2000
price of grain to other commodities had limited power in explaining starvation in China because grain was rationed in urban areas and the grain market in rural areas during a famine was too thin to be meaningful. Third, because interprovincial grain trade by private traders was prohibited and the central government did not have the capacity to deliver relief to rural areas during the period of a sharp decline in grain output nationwide, the subsistence of farmers in a province during that period depended on the food production in that province. These speci®c institutional arrangements provide a convenient way to test the validity of FAD or entitlement as an appropriate approach for understanding famines. The per capita grain output in a province can be used as the proxy for food availability in that province. If FAD is the appropriate approach, food availability would be the only variable responsible for the famine deaths. In the Chinese setting, a person's entitlement to food was legally determined by his/her residence status.15 The proportion of rural population in a province represented the proportion of population in that province who did not have legally protected rights to food. It is a proxy for the degree of urban bias in that province. If Sen's entitlement approach is the right framework to understand the causes of a famine, the urban bias might also be a signi®cant variable in determining famine deaths in addition to food availability. To be speci®c, the hypothesis we seek to test in the regression analysis can be summarised as follows: In a famine in China, the death rate in a province is positively related to the proportion of rural population in that province (urban bias hypothesis) and negatively related to per capita grain output in that province (food availability hypothesis). We will use the serious famine that occurred in 1959±61 in China as our case study. In the next section, we document grain production declines, issues of procurement, and the resulting famine. In Section 3, we conduct a statistical assessment of the relative effects of food availability and urban bias on the observed deaths from this human disaster. 2. Collectivisation and Demographic Crisis: 1959±61 China's agricultural collectivisation started in 1952. The farming institution was changed from household farms to mutual aid teams, to elementary cooperatives and then to advanced cooperatives that consisted of about 150 households. The advanced cooperative was the major farming institution by 1957. Agricultural output increased continuously in the period 1952±7 with an average annual growth rate of 4.6%. Encouraged by this success, the Communist party decided to adopt a bolder approach to mobilise surplus labour to 15 We do not need to worry about how to measure a household's property and exchange entitlements as these two variables were not important determinants of the rights to food in the speci®c socialist setting in China. 2000] 141 THE CHINESE FAMINE OF 1959±61 # Royal Economic Society 2000
142 THE ECONOMIC JOURNAL LJANUARY sA art of a apital formation. 6 In 1958, large-scale communes were formed as nationwide Great Leap Forward movement.Contrary to expecta- ions, however, agricultural production plunged dramatically for three succes- sive years and widespread famine ensued. During 1959-61, the death rate per thousand people increased dramatically while the crude birth rate per thou- sand people declined equally precipitously(see Fig. 1). 8 Economists have attempted to explain the causes of the sudden reduction in agricultural output. Conventional hypotheses include three successive years of bad weather, bad policies and bad management in the communes, and incentive problems due to the unwieldy, large size of the communes(Eckstein 1966: Chinn, 1980: Ashton et al., 1984 and Perkins and Yusuf, 1984). Lin 1/1000 Birth Rate Death Rate 5H+++++++++++++++++++ 194919541959196419691974197919841989 Fig. l. Birth Rate and Death rate in China, 1949-1989. Source: State Statistical Bureau(1990, p. 2) Ib Projects of capital formation include constructing irrigation systems, such as dams and reservoirs, building infrastructure, or the like Mechanisation was also used as a rationale for increasing the size of a 11 The principal characteristics of the Great Leap Forward may be summarised by policies related to technology, management and planning, and industries and ideology. See Riskin (1987) for additional As shown in Fig. 1, the changes in population trends started in 1958. However, the increase in the eath rate and the decline in the birth rate were likely to have been the result of massive mobilisation over China in 1958 as one of the most mportant compo g furnaces, which were set up in backyards for producing steel by m of the traditional iron- mponents of the Great Leap Forward movement Since the technique was extremely labour-intensive, people did not have time or did not give enough attention to health care and reproduction C Royal Economic Society 2000
increase capital formation.16 In 1958, large-scale communes were formed as part of a nationwide Great Leap Forward movement.17 Contrary to expectations, however, agricultural production plunged dramatically for three successive years and widespread famine ensued. During 1959±61, the death rate per thousand people increased dramatically while the crude birth rate per thousand people declined equally precipitously (see Fig. 1).18 Economists have attempted to explain the causes of the sudden reduction in agricultural output. Conventional hypotheses include three successive years of bad weather, bad policies and bad management in the communes, and incentive problems due to the unwieldy, large size of the communes (Eckstein, 1966; Chinn, 1980; Ashton et al., 1984 and Perkins and Yusuf, 1984). Lin 16 Projects of capital formation include constructing irrigation systems, such as dams and reservoirs, building infrastructure, or the like. Mechanisation was also used as a rationale for increasing the size of a collective. 17 The principal characteristics of the Great Leap Forward may be summarised by policies related to technology, management and planning, and industries and ideology. See Riskin (1987) for additional descriptions. 18 As shown in Fig. 1, the changes in population trends started in 1958. However, the increase in the death rate and the decline in the birth rate were likely to have been the result of massive mobilisation for producing steel by means of the traditional iron-casting furnaces, which were set up in backyards all over China in 1958 as one of the most important components of the Great Leap Forward movement. Since the technique was extremely labour-intensive, people did not have time or did not give enough attention to health care and reproduction. Fig. 1. Birth Rate and Death Rate in China, 1949±1989. Source: State Statistical Bureau (1990, p. 2). 142 [ THE ECONOMIC JOURNAL JANUARY # Royal Economic Society 2000
2000 THE CHINESE FAMINE OF 1959-61 143 (1990) proposed a game theory explanation that the main cause of the agricultural collapse was the deprivation of the peasants right to withdraw from the collectives. This switch in the form of organisation changed the incentive structure for the peasants and consequently undermined agricultural productivity. In this paper, we do not investigate the determinants of the sudden drop in output; instead, we focus on the consequences of the supply shock. More specifically, we analyse the relative importance of food availability and legal entitlement to food in causing the subsequent famine Statistical figures in Table I reveal that there were sharp reductions in grain availability for the period 1959-61. Prior to the collapse, the total grai output continued to increase, reaching a record high in 1958 with 200 million tons. In 1959, total supply suddenly dropped by 15% and, in the following two years(1960 and 1961), it was even worse, reaching only about 70% of the 1958 level. There was slow recovery from the slump in the subsequent years. The 1958 grain production level was not regained until 1966 During the food crisis, grain availability per person declined even more severely because, in the first two years, grain exports reached historical heights As shown in Table l, net grain export increased from 2.7 million tons in 1958 to 4.2 million tons in 1959. When combined with the decline in output, this resulted in a 17% and a further 13% reduction in per capita food supply in two consecutive years. Pressured by the food emergencies, China imported 4.5 Table 1 Grain Output, Procurement and International Trade QuotayOutput Per ca (million tons)(million tons) (%) (million tons) grain(kg/year) 169.52 47. 25.87 19275 40.22 20.87 195.05 1958 200.00 25.92 4.2 1961 160.00 32.42 9 21. 4.5 252.3 187.50 4.7 194.53 20.16 4.0 273.7 214.00 19.35 Source: State Statistical Bureau,(1990, P. 12, P. 26). Ministry of Agriculture, Planing Bureau(1984, 434) i9 Here and in the subsequent analysis, we use data between 1934 and 1966. This specific period is taken for consideration because important de c statistics such as death rate. are ome provinces prior to 1954. The period ends in 1966, the beginning of the Cultural Revolution, when the nation entered a distinctly different historical era c Royal Economic Society 2000
(1990) proposed a game theory explanation that the main cause of the agricultural collapse was the deprivation of the peasants' right to withdraw from the collectives. This switch in the form of organisation changed the incentive structure for the peasants and consequently undermined agricultural productivity. In this paper, we do not investigate the determinants of the sudden drop in output; instead, we focus on the consequences of the supply shock. More speci®cally, we analyse the relative importance of food availability and legal entitlement to food in causing the subsequent famine. Statistical ®gures in Table 1 reveal that there were sharp reductions in grain availability for the period 1959±61.19 Prior to the collapse, the total grain output continued to increase, reaching a record high in 1958 with 200 million tons. In 1959, total supply suddenly dropped by 15% and, in the following two years (1960 and 1961), it was even worse, reaching only about 70% of the 1958 level. There was slow recovery from the slump in the subsequent years. The 1958 grain production level was not regained until 1966. During the food crisis, grain availability per person declined even more severely because, in the ®rst two years, grain exports reached historical heights. As shown in Table 1, net grain export increased from 2.7 million tons in 1958 to 4.2 million tons in 1959. When combined with the decline in output, this resulted in a 17% and a further 13% reduction in per capita food supply in two consecutive years. Pressured by the food emergencies, China imported 4.5 19 Here and in the subsequent analysis, we use data between 1954 and 1966. This speci®c period is taken for consideration because important demographic statistics, such as death rate, are missing for some provinces prior to 1954. The period ends in 1966, the beginning of the Cultural Revolution, when the nation entered a distinctly different historical era. Table 1. Grain Output, Procurement and International Trade Year Output (million tons) Quota (million tons) Quota/Output (%) Net export (million tons) Per capita grain (kg=year) 1954 1955 1956 1957 1958 169.52 183.74 192.75 195.05 200.00 50.89 47.54 40.22 45.97 51.83 30.02 25.87 20.87 23.57 25.92 1.7 2.1 2.5 1.9 2.7 278.5 295.5 302.8 298.7 299.0 1959 1960 1961 170.00 143.50 147.50 64.12 46.54 36.55 37.71 32.43 24.78 4.2 2.7 ÿ4.5 246.7 212.7 230.8 1962 1963 1964 1965 1966 160.00 170.00 187.50 194.53 214.00 32.42 36.99 40.14 39.22 41.42 20.26 21.76 21.41 20.16 19.35 ÿ3.9 ÿ4.5 ÿ4.7 ÿ4.0 ÿ3.6 243.6 252.3 272.6 273.7 291.9 Source : State Statistical Bureau, (1990, p. 12, p. 26). Ministry of Agriculture, Planing Bureau (1984, p. 434). 2000] 143 THE CHINESE FAMINE OF 1959±61 # Royal Economic Society 2000
144 THE ECONOMIC JOURNAL LJANUARY million tons of grain in 1961 which helped to reduce the food deficiency Since that year, China has become a grain importer While the massive food shortage was a plausible cause of the famine, another important factor was the food entitlement to the farm population. Table shows, despite the sharp decline in grain supply, the total procurement reached a peak of 64.12 million tons, which drastically raised the quota-output ratio from 25.9% in 1958 to 37.7% in 1959. The quota-output ratio remained it 92.4% in 1960 despite further reduction in grain output. As a result, the excessive procurement severely reduced the food supply to which rural people were entitled. 20 The large quantities of grain acquisition in 1959-60 were due to several plausible reasons. First, the newly launched industrial Great Leap Forward increased the demand for grain not only for use as raw materials and sources of export but also for consumption in cities. Riskin (1987) documented that the employment in state industries tripled from 7. 8 million in 1957 to 23.16 million in 1958, with a net inflow of 15.68 million agricultural labourers. I Consequently, with larger population in the cities, the state had to raise it compulsory quota. In the winter of 1958-9, however, urban grain supplies began to fall short of the planned allocations. To guarantee the success of the Great Leap Forward, Chairman Mao made an important speech in the spring of 1959 and described the nation as one chessboard,, a policy that reaffirmed the central planning of grain and gave a high priority to city grain supplies over rural localities. This policy was rigorously implemented in 1959(Walker, 1984). A second possible reason for heavy procurement was the bumper harvest of 1958, which made the central government believe that China had solved its 'grain proble simply increased procurement to claim its own share of the harvest Nevertheless, a careful examination of evidence favours the first explana- tion,i.e,,that the central government harshly squeezed the peasantry on behalf of urban residents. The evidence simply does not support the explana- tion that the excessive deprivation of grain resulted from misjudgments of supplies. Fierce procurement campaigns were conducted by the government in 1959, and at the same time the government realised that peasants were using all means available to prevent the state from taking their grain 22The strong local resistance would have quickly corrected any illusion of a produc tion miracle. but the state continued to take ce actions. The state utilised effective political strategies to induce rural to hand over grain and See Peng(1987) for additional information on inter-provincial differences in per capita grain ouput, gover Irement,and grain availabilit Dther studies indicate similar magnitudes of urban immigration. Ashton et aL.(1984)re nat the net inflow of urban population was about 31 million between 1958 and 1960. Walker described that, between the end of 1957 and the end of 1958, urban population increased by at least 13 million, or approximately 13%. Bernstein (1984)provided similar migration numbers as Ashton et and pointed out that most of the inflow took place in the second half of 1958. Actions taken by the peasantry were found in Mao's writings (1967). They hid things cellars ed sentries .. ate turnips during the day an ealed rice at night. See Walker (1984)and Bernstein(1984)for additional descriptions. C Royal Economic Society 2000
million tons of grain in 1961 which helped to reduce the food de®ciency. Since that year, China has become a grain importer. While the massive food shortage was a plausible cause of the famine, another important factor was the food entitlement to the farm population. Table 1 shows, despite the sharp decline in grain supply, the total procurement reached a peak of 64.12 million tons, which drastically raised the quota-output ratio from 25.9% in 1958 to 37.7% in 1959. The quota-output ratio remained at 32.4% in 1960 despite further reduction in grain output. As a result, the excessive procurement severely reduced the food supply to which rural people were entitled.20 The large quantities of grain acquisition in 1959±60 were due to several plausible reasons. First, the newly launched industrial Great Leap Forward increased the demand for grain not only for use as raw materials and sources of export but also for consumption in cities. Riskin (1987) documented that the employment in state industries tripled from 7.8 million in 1957 to 23.16 million in 1958, with a net in¯ow of 15.68 million agricultural labourers.21 Consequently, with larger population in the cities, the state had to raise its compulsory quota. In the winter of 1958±9, however, urban grain supplies began to fall short of the planned allocations. To guarantee the success of the Great Leap Forward, Chairman Mao made an important speech in the spring of 1959 and described the nation as `one chessboard', a policy that reaf®rmed the central planning of grain and gave a high priority to city grain supplies over rural localities. This policy was rigorously implemented in 1959 (Walker, 1984). A second possible reason for heavy procurement was the bumper harvest of 1958, which made the central government believe that China had solved its `grain problem'. The government simply increased procurement to claim its own share of the harvest. Nevertheless, a careful examination of evidence favours the ®rst explanation, i.e., that the central government harshly squeezed the peasantry on behalf of urban residents. The evidence simply does not support the explanation that the excessive deprivation of grain resulted from misjudgments of supplies. Fierce procurement campaigns were conducted by the government in 1959, and at the same time the government realised that peasants were using all means available to prevent the state from taking their grain.22 The strong local resistance would have quickly corrected any illusion of a production miracle, but the state continued to take coercive actions. The state utilised effective political strategies to induce rural cadres to hand over grain and 20 See Peng (1987) for additional information on inter-provincial differences in per capita grain output, government procurement, and grain availability. 21 Other studies indicate similar magnitudes of urban immigration. Ashton et al. (1984) reported that the net in¯ow of urban population was about 31 million between 1958 and 1960. Walker (1984) described that, between the end of 1957 and the end of 1958, urban population increased by at least 13 million, or approximately 13%. Bernstein (1984) provided similar migration numbers as Ashton et al. and pointed out that most of the in¯ow took place in the second half of 1958. 22 Actions taken by the peasantry were found in Mao's writings (1967). They hid things in `secret cellars, ... posted sentries. ... ate turnips during the day and concealed rice at night.' See Walker (1984) and Bernstein (1984) for additional descriptions. 144 [ THE ECONOMIC JOURNAL JANUARY # Royal Economic Society 2000
2000 THE CHINESE FAMINE OF 1959-61 punished those who resisted orders. The formation of large-scale people's communes provided opportunities to the cadres to mobilise large amounts of grain(Bernstein, 1984). The result of the procurement campaign in 1959 was astonishing. The state managed to increase grain collection by about 24%even though actual grain output plunged by 15%o Accompanying the sharp reduction in food supply and excessive procure ment was massive famine in China for three consecutive years between 1959 and 1961. However. this famine went unnoticed outside of China until the release of important demographic data by the Chinese government in the early 1980s. In a careful study of the population statistics by interpolating between pre- and post famine mortality levels, Ashton et al.(1984)concluded that'the number of excess deaths during the crisis amounts to about 17. 3 million deaths over the age of 10 and 12.2 million deaths under age 10, giving a tota of almost 30 million excess deaths. Measured by number of deaths, this disaster is, undoubtedly, the worst famine in the history of the world Table 2 presents summary statistics for the period 1954-66 on the Chinese population, its death rate, and birth rate, including separate accounts for rural nd urban areas. Largely an agrarian economy, the share of rural population ras above 80% in the entire period. The death and birth figures clearly demonstrate a major demographic catastrophe between 1959 and 1961. The national death rate increased from 11.98 per thousand in 1958 to 14.59 per Table 2 Summary Statistics of Population, Death Rate and Birth Population Death Rate c Nation Country Nation City Country Nation Ci Year( millions)(%)(%)(0.1%)(0.1%)(0.1%)(0.1%)(0.1%)(0.1%) 1954 60266 13.786.313.188.0713.713797424537.51 1956 628.28 14.685.411 1184319037.8 659.94 672.0 184 14.5910.9214.6 662.0 25.4313.77 1962 67295 17.382.710.028.2810 370735 37.27 691.72 70499 840 10.04 43.19 1.61150 39.1432.1740.27 745.4217981.18835.599.4735.0520.8536.71 Source: State Statistical Bureau, Statistical Yearbook of China 1991, Beijing: State Statistical Press, 1991 PP talk in ok given by the Food and Agricultural orgar n of the united Nations still would not beli at the famine actually occurred in China. In 1960, he had travelled for two weeks from the northe the south of countries. However, his trips were restricted to cities, and he did not visit the rural areas c Royal Economic Society 2000
punished those who resisted orders. The formation of large-scale people's communes provided opportunities to the cadres to mobilise large amounts of grain (Bernstein, 1984). The result of the procurement campaign in 1959 was astonishing. The state managed to increase grain collection by about 24% even though actual grain output plunged by 15%. Accompanying the sharp reduction in food supply and excessive procurement was massive famine in China for three consecutive years between 1959 and 1961. However, this famine went unnoticed outside of China until the release of important demographic data by the Chinese government in the early 1980s.23 In a careful study of the population statistics by interpolating between pre- and post famine mortality levels, Ashton et al. (1984) concluded that `the number of excess deaths during the crisis amounts to about 17.3 million deaths over the age of 10 and 12.2 million deaths under age 10, giving a total of almost 30 million excess deaths.' Measured by number of deaths, this disaster is, undoubtedly, the worst famine in the history of the world. Table 2 presents summary statistics for the period 1954±66 on the Chinese population, its death rate, and birth rate, including separate accounts for rural and urban areas. Largely an agrarian economy, the share of rural population was above 80% in the entire period. The death and birth ®gures clearly demonstrate a major demographic catastrophe between 1959 and 1961. The national death rate increased from 11.98 per thousand in 1958 to 14.59 per 23 During discussions at a recent talk in Bangkok given by one of the authors, a senior of®cial from the Food and Agricultural Organisation of the United Nations still would not believe that the famine actually occurred in China. In 1960, he had travelled for two weeks from the northeast to the south of China and did not observe the usual signs that he observed in the incidence of famine in other countries. However, his trips were restricted to cities, and he did not visit the rural areas. Table 2. Summary Statistics of Population, Death Rate and Birth Rate Population Death Rate Birth Rate Year Nation (millions) City (%) Country (%) Nation (0.1%) City (0.1%) Country (0.1%) Nation (0.1%) City (0.1%) Country (0.1%) 1954 1955 1956 1957 1958 602.66 614.65 628.28 646.53 659.94 13.7 13.5 14.6 15.4 16.2 86.3 86.5 85.4 84.6 83.8 13.18 12.28 11.40 10.80 11.98 8.07 9.30 7.43 8.47 9.22 13.71 12.60 11.84 11.07 12.50 37.97 32.60 31.90 34.03 29.22 42.45 40.67 37.87 44.48 33.55 37.51 31.74 31.24 32.81 28.41 1959 1960 1961 672.07 662.07 658.59 18.4 19.7 19.3 81.6 80.3 80.7 14.59 25.43 14.24 10.92 13.77 11.39 14.61 28.58 14.58 24.78 20.86 18.02 29.43 28.03 21.63 23.78 19.35 16.99 1962 1963 1964 1965 1966 672.95 691.72 704.99 725.38 745.42 17.3 16.8 18.4 18.0 17.9 82.7 83.2 81.6 82.0 81.1 10.02 10.04 11.50 9.50 8.83 8.28 7.13 7.27 5.69 5.59 10.32 10.49 12.17 10.06 9.47 37.07 43.37 39.14 37.88 35.05 35.46 44.50 32.17 26.59 20.85 37.27 43.19 40.27 39.53 36.71 Source : State Statistical Bureau, Statistical Yearbook of China 1991, Beijing: State Statistical Press, 1991, pp. 79±80. 2000] 145 THE CHINESE FAMINE OF 1959±61 # Royal Economic Society 2000
