Between 1952 and 1957, China's total agricultural output value increased at an average annual rate of 4.6 percent, while its population grew at an annual rate of 2.4 percent. This resulted in a per capita agricultural growth rate of 2.2 percent. During the next twenty years the agricultural growth rate stood at 2.1 percent, slightly higher than the population growth rate of 1.9 percent (DesForges, 99). China's agricultural growth rate could not keep up to its growing population, so economic development suffered.
During this time, the agricultural sector contributed large sums of funds to the industrial sector. It was estimated that as much as 21.5 percent of rural income flowed into the state treasury every year from 1952 to 1978. This resulted from inequalities between the prices of industrial products and agricultural products, a sum almost equivalent to China's total public owned assets (DesForges, 98).
Even though agricultural growth did occur during this time (see table 1), it grew too slowly and grew slower than other comparable less developed countries were growing at this time. China was investing too much into the industrial sector and too little into the agricultural sector. Before 1979, China's investment in agriculture as a percentage of total investment in capital construction accounted for between six and eleven percent. This small investment into agriculture was made possible by keeping the standard of living of farmers at the lowest possible level. In 1978, the per-capita net income of a farming family was only 91.64 Yuan (equivalent to $10.29 American today), of which 72.26 Yuan was distributed in food produce and only 19.38 Yuan in cash. In the twenty years prior to 1978, an average farmer's net income increased at an annual rate of only 2.8 percent (DesForges, 100). During this period, central planning was the basis of the relationship between China's agricultural and industrial sectors.