Abstract
This paper describes how the Unified Purchase and Sale of Grain Policy has affected the grain trade in China’s rural areas. In general, it was broadly accepted that rural grain markets closed down after the government implemented the policy. However, it can be shown that, according to the regulations concerning the Unified Purchase and Sale of 1953, the State Grain Market existed at that point. Then, what is the State Grain Market and how is it different from well-known the Free Market of 1956 in rural areas?BR The reason the State Grain Market has not been sufficiently dealt with academically is that the Unified Purchase and Sale Policy was initially recognized as a policy that operated contrary to the free market, leading researchers to focus on the mechanics of the Free Market that operated in 1956. Previous studies often explained the background and outcomes of the market policy without an accurate definition of the Free Market. As a result, it was easy to presume that there was no grain trade between individuals in rural areas except for smuggling after the Unified Purchase and Sale of Grain Policy.BR However, rural areas have seen constant supply problems in the process of purchasing grain by the state. The cause of these issues was that the government overlooked the role of the grain trade in rural areas. Farmers often sold grain to use as funds for rural sideline production and, therefore, they had to repurchase grain afterward. Their economic activities were the basis for increasing farm income and the revitalization of the rural market. Moreover, the grain trade was a major part of rural trade. Once the grain trade was banned, the market system in rural areas collapsed, and the flow of goods between urban and rural areas was interrupted. However, the private grain trade among farmers made it difficult for the state to predict the amount of grain it could secure. Facing such a dilemma, the government felt it was forced to open the State Grain Market to solve the issue.BR This paper examines in detail how the State Grain Market was operated in rural areas after the implementation of the Unified Purchase and Sale Policy. This study also discusses the difference between the State Grain Market and the Free Market of 1956, explaining the background, implementation, and limitations of the two distinct policies in order to show the specifics of what occurred in the rural areas as the Unified Purchase and Sale Policy developed. It will also demonstrate how the socialist ideals of China in the 1950s were embodied in the implementation of the socialist transformation policies, its problems, and the supplementary systems that caused further issues.
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