Moreover, the failure of price, wage, and currency reforms10
The poor agricultural performance, food shortages, and resulting high inflation and low economic growth during 1984–87 were attributed to three factors. First, the output contract system did nothing to move the rural economy toward market-based prices, for either input or output. The state trading agencies still tried to dominate the marketable surplus of food staples at deteriorating terms of trade, in 1985 deteriorated the situation further. During 1985–88, the GDP growth rate was reduced to 4.6 percent on annual average. Agricultural growth decelerated to only 2.2 percent per annum during 1985–88 and was recorded at negative 1.8 percent in 1987, when food production decreased by 4.4 percent. This led to famine in some provinces as food per capita was only 281 kg. Inflation started at 91.6 percent in 1985 and accelerated to three-digit percentages for three years during 1986–88. Inflation hit a staggering 774.7 percent in 1986.
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Second, the agricultural cooperatives still retained the ability to increase or decrease the cooperative members’ share of the contracted amount by altering the system of payment for the input assigned to both themselves and the members. although peasant households, under the output contract system, were, in principle, free to sell their surplus in the free market (Fforde and de Vylder 1996).