Chinese farmers" paintings have their origins in the 1950s, when the communist party encouraged rural communities as well as the army to engage in art.
"People need art, and art needs more people."
It was this new understanding of art being exerted by common people, instead of bourgeois, academic professionals, that stood at the cradle of Chinese farmers" paintings. Some communes picked it up, in the beginning for recreational purposes, or as a well-meant means of propaganda, or to express their dreams of a better life. The farmers" vision of the Communist paradise was for them straight-forward and simple. Happiness were good crops, a stable full of healthy cattle, a nice home, healthy children, good and sufficient meals, electricity, and every now and then a bit of fun at local festivities.
There are even some older roots of Chinese folk art, like paper cuts or mural paintings and the Chinese New Years prints. Their influence can be recognized until our days.
During the Chinese Cultural Revolution, folk art was much subject to politics. Many folk art artists and artisans like those who produced the Chinese New Year prints, were more seen as part of the old "evils" that had to be eradicated. Others like the painting peasants from Huxian were seen as role models. Stefan R. Landsberger has written an interesting article titled Huxian Peasant Painters, and illustrated with some good examples of the interrelation of farmers paintings and the genre of the Chinese propaganda poster during the Cultural Revolution. Anyway, the farmers" paintings movements continued through the Cultural Revolution and the new era of reforms. And with the political and economic reforms at the beginning of the 1980s, the movement took a new upswing with international exhibitions and with Western tourists coming to China in large numbers.