North Korean Economy Watch

Over the last couple of decades, Pyongyang has shown a callous reluctance to part with its foreign currency reserves to acquire the necessary amount of food needed to sustain its population.  The DPRK government has, however, promoted a number of domestic initiatives, some financed locally and others with international assistance, intended to boost regional food security (and decrease individual mobility) which have cost it little in the way of scarce foreign currency. Some of these projects have been previously documented on this web page: The construction of regional fish and fruit farms, as well as large-scale land rezoning, land-reclamation (and here), and sea-scaping projects.

Today the Russian media reports yet another clever idea the North Koreans are pursuing to increase domestic food production: renting farmland in Eastern Russia.  According to RIA Novosti:

A delegation from North Korea, which is facing severe food shortages, has held talks with authorities of the Amur region in Russia’s Far East on leasing land to grow vegetables and grain, a regional official said on Thursday.

North Korea plans to rent several hundred thousand hectares of land in the Amur region, which has about 200,000 hectares of idle land in regional, municipal or private ownership.

“The North Korean authorities are planning an unprecedented agricultural project – to create a farm in the Far East to grow soybeans, potatoes, corn and other crops. Everything that Korean citizens need, because the issue of food shortages there are acute from time to time due to land shortages,” the official told RIA Novosti.

North Korean state media said the country’s chronic food problems have been exacerbated by heavy rains in June and July. A tropical storm washed away or inundated 60,000 hectares of land in farm regions.

Amur region minister of foreign economic relations Igor Gorevoi said the land must not be abandoned.

“We are also interested in investment in farm machinery and equipment. Another key condition is that the newly-formed Korean company must be registered in the Amur region, which means tax revenue for the budget,” he said.

The initial lease of the land, which is to be auctioned off, amounts to 50 rubles ($1.70) a year per hectare.

The Korean delegation plans to consider the terms of the lease next week.

North Korean leader Kim Jong-il, whose country faces increasing international isolation because of its nuclear program, visited Russia in August in his own armored train on a rare foreign trip and had talks with Russian President Dmitry Medvedev. Russia then promised to send 50,000 tons of grain to Pyongyang.

It will be interesting to see if this project can be realized.

Additional Information:

Kim Jong-il recently met Russian president Medvedev in this area.

Russia is sending 50,000 tons of grain to the DPRK in flood relief.

Read the full story here:
North Korea to rent farm land in Russia’s Far East
RIA Novosti
2011-9-1