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2008/07/03 10:57 KST
NORTH KOREA NEWSLETTER NO. 10 (July 3, 2008)

   *** OPINION FROM EXPERTS

NORTH KOREA'S FOOD SHORTAGE AND ITS SOLUTION

By Lee Young-hoon
Research Fellow, Northeast Asian Economic Studies Team,
Institute for Monetary & Economic Research, The Bank of Korea in Seoul

Due largely to the poor harvest inflicted by flood damage last year, North Korea's chronic food shortage surfaced again this year, about 10 years after the dismal situation of the late 1990s. As North Korea is a closed society, it is not easy to correctly evaluate how serious the food problem is at the moment. But the World Food Programme (WFP) and other international organizations supporting food for North Korea are concerned about the possibility of mass starvation from famine this year. Although there are voices against South Korea's food aid to its impoverished northern neighbor, an increasing number of people are calling for humanitarian assistance for the hungry North Koreans. In this story, we will look into the food situation and seek ways to its solution based on data publicized so far.

  
Situation of North Korea's Food Shortfalls

Grain production and imports in 2007 lagged far behind previous years. According to the Rural Development Administration (RDA), the total grain production last year amounted to 4.01 million tons, a reduction of some 500,000 tons from the previous year. The Unification Ministry calculated tentatively that the North obtained approximately 700,000 tons of grains from outside last year, including 400,000 tons of rice offered by Seoul. Accordingly, the total supply of grains, combined with domestic production and imports from overseas, was estimated at a mere 4.71 million tons.

   Here, we need to take a look at the food situations of the past in order to assess recent food problems in North Korea. The RDA's statistics revealed that the total supply of grains last year stood in the range of 4.41-5.12 million tons, similar to the period of the so-called "desperate march under trial" from 1995 to 1997. Hundreds of thousands of people were believed to have starved to death during that harsh period of famine.

   Meanwhile, the U.N. Food and Agriculture Organization (FAO) initially estimated the North's grain production last year at 3.8 million tons, but readjusted it to 3 million tons, an amount similar to the miserable period of the late 1990s. Given the limits of North Korean statistics, the total food supply in 2007 is believed to be no better than in the late 1990s.

   In fact, the North's mass starvation did not just occur during the period of the "arduous march," but also from 1994-2000. During that period, it is estimated that between 250,000 to 3 million died from famine. Based on these estimates, we cannot rule out the possibility that at least tens of thousands of North Korean residents will starve to death this year if there is no outside food assistance.

   But some people from South Korean society have denied the seriousness of the food shortfalls. They base their assertion on the calculation of the total grain demand. For example, they claim people would not starve to death if 3.8 million tons of grain is supplied, with each North Korean being given 546 grams of grain per day.

   There is another assessment that there will not be a tragic situation like the 1990s because the development of the North's market system has contributed to improving the food distribution structure. In fact, the food problems are attributable to the fragile distribution system in addition to the food shortage itself. Food rationing through the markets could be more efficient than the distribution system itself. Therefore, the food situation today is less severe than the latter part of the 1990s.

   In assessing grain demand, we need to notice that cereals are consumed not only for food, but also for processing, seed, animal feed and other purposes. The Korea Rural Economic Institute estimated North Korea's annual demand of grain at 5.2 million tons, including all the purposes mentioned. If we follow this standard, the shortage of North Korea's food for this year is estimated at 0.5-1.5 million tons.

   In relation to the market development, the markets usually contribute to improving the distribution structure, but on the other hand, expand the gap between rich and poor. If conditions get bad, the food situation will become worse for those in the poor and vulnerable classes who are unable to receive wages and food rationing, and who cannot afford to operate their own small businesses. The situation will be more serious under spiraling inflation.

   The South Korean civic aid group "Good Friends" reported in its North Korea newsletter that the general food situation is very bad except for major cities and main business firms. It reported deaths from all regions across North Korea, that even some parts of Pyongyang stopped food rationing, and that there is an increasing number of households relying on watery gruel.

   There may be different opinions on the grave situation of the food shortage. But grain price information is almost the same. Good Neighbors and Daily NK data show that the grain price since 2005 rose in a narrow range before the harvest season, and then decreased. However, the grain price has been on the increase until recently, when a sharp rise began in the latter half of last year. The rice price doubled to 1,500 North Korean won per kilogram in September last year from 750 won in March the same year. This year, it quadrupled to 3,350 won in May, four times higher than the same period last year.

   North Korea's price control system is not working effectively. In every marketplace entrance, there are signboards saying that corn and rice cannot be sold for more than 1,000 won and 2,000 won per kilogram, respectively. As food price skyrocket, average North Koreans cannot afford to buy commodity items such as clothes, footwear and other daily necessities.

  
Cause of Food Shortages

The root cause of the decrease in the total grain supply in 2007 and the rapid rise of grain prices are primarily attributable to delayed agricultural reform, a decrease in imports, and a farming policy that invited environmental destruction.

   More specifically, since 2007, farm workers have been stripped of even small patches of land that they were allowed to have in the past for their subsidiary farming work. Moreover, cooperative farm managers are often being punished for their "capitalistic thought" of treating farmland as their own private assets. The cooperative farm managers offered the farmland to individuals on a contract basis so they were able to solve their own food problems.

   Secondly, the North's nuclear weapon test conducted in 2006 served to decrease international handouts to North Korea. Worse yet, there is the possibility of reduced food aid from South Korea this year.

   Thirdly, the reduction in grain production in 2007 was the result of severe flood damage in August that washed away a great portion of farmland and left hundreds of people dead or missing.

North Korea's Flood Damage
Year 199520062007
Dead, Missing69150600
Houses damaged 96,000 households36,000 households 240,000 households
Inundated farmland 360,000 jeongbo 27,000 jeongbo 200,000 jeongbo

*one jeongbo is about 10,000 square meters
*data: Unification Ministry (quoting from a KCNA report)

The flood damage was the result of environmental destruction. Most of North Korea's hills and mountains became bald and barren as people converted them to rice patches and farms into high altitudes while cutting woods and groves for firewood. Subsequently, this caused frequent natural disasters in North Korea, resulting in famine. The International Federation of Red Cross' 2007 report on natural disasters revealed that, of the 1.2 million deaths from natural calamities worldwide, North Korea topped the list with 458,435 deaths for the 10-year period from 1997 to 2006.

  
Ways to Solve the Food Problem

To solve the food problem, North Korea's agricultural production structure needs to be basically improved through agricultural reform and forestation. Forestation is a long-term task that can be promoted together with a solution for the electricity shortage. But agricultural reform is a task that can be pushed forward if the government has determination. It is a known fact that individual farming is very efficient compared to collective farming. In the cases of China and Vietnam, the progress of agricultural reform brought about increases of income for residents and the expansion of investment resources. If the North had pushed ahead with agricultural reform continuously, the food situation would not be as serious as it is presently. Then it would have been easier for the socialist country to mobilize industrial capital and attain higher economic growth.

   Likewise, the food shortage facing North Korea today is not unrelated to the North's limited and passive promotion of reform and opening. Despite various measures for increasing food since the arduous march in the latter half of 1990s, North Korea still suffers from chronic food shortfalls. We can find the cause of the food shortage in the fact that the North's overall reform and opening has not yet been realized.

   Heaven helps those who help themselves. If the North Korean government does not conduct agricultural reform and relies on outside assistance, then its own residents, as well as international community, will turn it away. Moreover, it is not easy to depend on outside handouts in light of today's soaring grain prices worldwide.

   In the short term, the North Korean authorities should obtain food assistance through improving its external relations to prevent deaths from starvation. According to data from the Korea Trade-Investment Promotion Agency in Seoul, North Korea has brought in some 90,000 tons of grains from China, including wheat flour, from January to April this year. In addition, the North is to get 300,000 tons of grains from China and the WFP by the fall harvest season. On top of that, some 200,000 tons of rice out of the total 500,000 tons promised for Pyongyang by Washington will be brought into the country this year. This amount of grain will prevent a worst-case scenario like the arduous march in the latter half of 1990s, but the country is still not completely free from the risk of mass starvation.

   Recently, the South Korean government disclosed that it would consider providing food assistance even without the North's request if an emergency situation occurs. This is the expression of the Seoul government's acceptance of public opinion that humanitarian assistance is above reciprocity and transparency in its aid policy toward the communist country.

   The assessment of the emergency situation varies depending on which information is used. But we can say that even though a small number of people are dying from famine, it is an emergency situation. And if food assistance guarantees their lives, it will offer new momentum to improve inter-Korean relations, which have been strained for months.

   Civilian-level assistance needs to be pursued positively as well. It may be more desirable for civic groups, rather than the government, to help the famine-stricken country purely for humanitarian purposes. Civilians will show great interest in whether the food aid they provide is fairly distributed to miserable North Korean residents, becoming a tacit pressure for the transparency of food distribution. Helping North Koreans with sincere and a devoted spirit will definitely be another road leading to the national unification of Korea.

  (END)