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 2000The urban consumption rations were matched closely with the rural compul￾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 con¯icts between the government and the peasantry. Since the government gave priority to indus￾trial 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.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 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 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 respon￾sible 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 nation￾wide 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