Art 38 the common program of the people's republic of china 1949-1954

Article 38 of the Common Program

Supply and Marketing Cooperatives, designed to knit together rural production and demand through a hierarchy of general stores that purchased members’ farm goods or handicrafts and retailed basic necessities crafted by both rural and urban workshops. each SMC functioned as a reliable buyer/seller, paying and charging current market rates, a pointed contrast to the often-predatory deals rural merchants offered – springtime cash payments that required fall crop deliveries at low-end prices, the year’s balance paid after deducting advances and interest. Many SMCs did arrange credit for members on generous terms, but chiefly they dealt with goods shipped to or drawn from a set of newly-created, national-scale, specialized trading corporations (STCs for grain, cloth, lumber). SMCs thus emphasized trade over finance. Initially, they competed with private merchants and retailers, but by the mid-1950s had largely superseded them, helped by tightened regulations on agricultural marketing. Some 20,000 SMCs operated across China by 1949, “concentrated in the older liberated areas,” most sponsoring just one shop. Their numbers increased to 33,000 in 1952, as membership soared, from 10 million to nearly 140 million; utilizing 99,000 stores that recorded a fifth of all rural retail sales. Managers were supposed to obey strict rules and guidelines set in Beijing; but as so often, local cadres followed less demanding paths. To raise adequate capital they set members’ share prices so high that poor families were excluded, or allowed wealthier individuals to ignore the mandated limit of a single share per person. Like their capitalist cousins, credit managers routinely favored those least likely to default, not hard luck members dearly needing funds for seed and fertilizer. Rules about elections for management committees and annual rotations of their personnel also seemed to vaporize. Last, SMC buyers proved risk-averse, unwilling to update shop inventories or stock new products for fear of accumulating unwanted goods. They also avoided, until the last minute, concluding agreements to provide trading companies with specific quantities of local wheat, rice, or soybeans, as they could not predict what share of any household’s harvest they could purchase vs. what share moved through private channels. Late in 1953, the central government transformed market relations to end these uncertainties. Scranton (n y) Pages 11-12-13[Cite] Fig. 38.1: Cooperative supply consumer goods 1952-1954