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).
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10 By 1985, spiraling inflation forced a reform proposal to solve the problem of high free market prices “at a stroke,” because otherwise it might have further worsened the state’s control over resources. A combination of currency reform, increased state prices, and higher wages was introduced; however, this partial reform effort also could not help stabilize the central planning economy because the state could not procure enough commodities under hyperinflation due to huge in-cash subsidies to SOEs (Beresford and Fforde 1997). In many cases, peasants returned land to the cooperatives, and put more effort into their personal 5 percent plots of land. It is estimated that during 1983–87, peasant households received only 16–17 percent, or even 13 percent in some places, of the contract output, an amount that could not possibly compensate production expenses (Vo 1990). Finally, agricultural stagnation was further exacerbated by insufficient state investment.