In 1978, 18 farmers in Xiaogang village, in east Anhui Province, signed a secret agreement to divide communally owned farmland into individual pieces called household contracts, thus inadvertently lighting the torch for China's rural revolution. Today they are considering pooling their farmland again to create an even more efficient economy.

Yan Junchang, one of the 18 farmers, is now 67 years old. He was the leader of the production team in Xiaogang Village and currently he is the honorary director of the Memorial Hall of the All-round Contract System.

Before 1978, Xiaogang was infamous for its poverty. Almost all the local families had to roam the countryside begging after the autumn harvest. The village population was only 120 before 1958 and 67 villagers died of hunger during the Great Leap Forward from 1958-60. In Fengyang County, where Xiaogang is located, one in four people perished – 90,000 in all. "But no civil servant suffered from hunger in our region," Yan said.

"Villagers tended collective fields in exchange for 'work points' that could be redeemed for food. But we had no strength and enthusiasm to work in collective fields due to hunger. We even didn't have time because we were always being organized by governmental work teams who taught us politics," Yan recalled. "It was then that I began to consider contracting land into individual households."

"I was selected as the deputy leader and later as the leader of our production team in 1962. The grain output in our village was 15,000 kilograms per year before launching the household contract system. Food was not adequate to feed everyone. Families boiled tree leaves, bark and any edible wild plants; we ate whatever we could find. After consulting with some other villagers, I made up my mind to contract land to individual households no matter what penalty would be imposed on me. We didn't want to starve anymore," Yan said.

In 1978, 18 villagers at Xiaogang risked their lives to sign a secret agreement that divided the then People's Commune-owned farmland into pieces for each family to cultivate. They promised that each household would deliver a full quota of grain to the state and to the commune, and keep whatever remained.

However, their secret was disclosed the following spring. Some people accused Xiaogang's villagers of "digging up the cornerstone of socialism." Luckily, Fengyang Prefecture's Party Secretary, Wang Yuzhao, was open-minded. Yan had an audience with Wang, who had heard of Xiaogang's efforts and had been told that its harvests looked favorable. He promised to protect the village as long as their practice didn't spread. Later, Yan’s action received strong support from the then Party chief of Anhui Province, Wan Li, during a period of time when no official endorsement was given by the central government.

"Comrade Wang asked if I was a CPC member when visiting our village. I said no," Yan recalled, "He then praised my courage and agreed to allow us to practice the contract system for 3 years."

Grain output increased to 90,000 kilograms in 1979, over six times as much as the previous year. The per capita income of Xiaogang climbed to 400 yuan from 22 yuan.

With the rural reform policies that followed, Xiaogang villagers began to enjoy a much better life. Allocating farmland to each household fired local enthusiasm for agriculture production. All farmland, some abandoned for years, was cultivated, and the years of starvation gradually ended. "I have five children. My family used to live a poverty-stricken life in old tumble down thatched cottage with doors made of straw. In 1993, we moved into a brick house. We had money to purchase farm machines, watches and a TV set," said Yan.

Despite the great improvement in their standard of living, the residents of Xiaogang are still far from wealthy. "I spent all my family's income to pay various taxes years after we contracted some 3 hectares of farmland. Then, from 1990, young people started heading to cities in order to work as migrant workers," Yan said.

Unfortunately Xiaogang didn't capitalize on its first-mover advantage. The area never developed the factories that could offer higher-paying jobs, and transportation remains poor.

But Xiaogang began to show new vigor when a group of new village leaders such as Yan Deyou came to the forefront. In 1997, Yan Deyou, the Xiaogang Village Party branch secretary, visited Changjiang Village in Zhangjiagang City, Jiangsu Province and gained useful experience. A road was completed in Xiaogang with financial support from Changjiang. With more help from Changjiang, Xiaogang residents began to grow grapes and develop other industries.

"We were the first to implement the family contract responsibility system, but later we missed out on other opportunities for further development. Now agricultural taxes are canceled, and farmers receive 30 yuan per mu (15 mu = 1 hectare) in subsidies from the government. We really appreciate that. But individual farming is no longer generating prosperity. We need to combine forces to create a more efficient economy," Yan stated.