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Asahi Shimbun: China provided North Korea with substantial amounts of food and fertilizer this year

Wednesday, November 4th, 2020

Benjamin Katzeff Silberstein

In a piece of news that should surprise no one, Asahi Shimbun reports that South Korean government sources say China provided North Korea with 5-600,000 tons of food aid and fertilizer this year. Although it wouldn’t entirely make up for the estimated shortfall, it is still a highly significant contribution:

But several South Korean government sources said China has provided North Korea with between 500,000 and 600,000 tons of food along with the fertilizer this year.

It also sent about 600,000 tons of corn and other types of grain between June and August, according to Chinese sources with inside knowledge of ties with North Korea.

Pyongyang requested more assistance in the aftermath of the summer typhoon damage and Beijing is considering sending an additional 200,000 tons of food, the sources said.

The South Korean sources focused on the volume of fertilizer shipped to North Korea as such assistance is considered highly unusual.

North Korean authorities equate one ton of fertilizer to 10 tons of food assistance, a former high-ranking North Korean government official said.

“Due to chronic shortages, fertilizer is highly prized in North Korea,” the official added. “The amount sent this year is equivalent to 5.5 million tons of food, which exceeds the yearly production of food. It was a very unusual level of assistance.”

Although North Korea is no longer in the grips of famine that raged in the late 1990s and claimed countless lives, the U.N. World Food Program has estimated that between 2018 and 2019 about 10 million North Koreans did not have enough to eat.

The situation is believed to be worse this year.

North Korea was plagued by flooding and other damage due to typhoons and torrential rain in summer after near-drought conditions in spring.

A source at a Chinese government-affiliated agency who is well-versed in issues involving North Korean agriculture said that the harvest estimate at planting time was between 3.5 million and 3.8 million tons for a shortfall of about 1.5 million tons.

Rice prices were kept stable through the release of grain stockpiled for emergencies, but the situation without China’s assistance was expected to be dire from next spring.

China’s decision to bail out its unpredictable neighbor may reflect a strategy to keep North Korea in its corner as Beijing’s confrontation with Washington worsens. In this regard, Beijing made a big fuss of its involvement in joining fighting in the Korean War on the 70th anniversary of China’s participation.

“China and North Korea have always shared interests in terms of their view of the United States, but that has strengthened recently,” said a North Korean source. “China is sending a message to the United States through its appeal of a honeymoon period with North Korea.”

With no signs of progress in denuclearization talks with the United States, the easing of economic sanctions against North Korea appears unlikely in the short term.

That suggests North Korea will continue to lean on China for support, analysts said.

“If North Korea receives support from abroad, it will no longer be able to say it is getting by with its own efforts,” said a South Korean expert on the North Korean economy. “But North Korea can continue to save face because China does not announce the assistance levels.”

(Article source: Takeshi Kamiya in Seoul and Yoshikazu Hirai in Shenyang, “China bailout to North Korea: massive food and fertilizer aid,” Asahi Shimbun, November 3rd, 2020.)

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North Korea’s disaster management: a comment about a comment

Wednesday, November 4th, 2020

By Benjamin Katzeff Silberstein

It might seem a strange topic to post about on the day after the US elections, but perhaps some readers might like a break from the incessant commentary for something completely different.

If so, I highly recommend the article that former ambassador James Hoare published yesterday on 38 North, partially as a comment to my earlier article about North Korean disaster management. Ambassador Hoare gives a highly interesting historical perspective partially based on his own experiences in the country, noting that deforestation is a problem on the Korean peninsula much older than North Korea itself. He also notes that North Korea is far from the only country where homes constructed near riverbeds are regularly flooded, and argues that North Korea’s flooding problems are, after all, not so unusual in an international context.

I fully agree with all of these points, and the historical context is very valuable and crucial for understanding the current situation. If anything, there are perhaps two points of minor disagreement that I have with Hoare’s text.

First, the current North Korean situation is in large part a result of changes that could have been avoided. Deforestation was acutely exacerbated during the Arduous March, because people had few other alternatives than to cut down trees for firewood and to clear the ground for farming. Deforestation and flooding, therefore, are not phenomena entirely endemic or “natural” neither to the Korean peninsula nor to North Korea in particular, because things were not always this way. There is nothing natural or inherently necessary about North Korea’s economic system, as the many former communist states who have adopted programs of systemic overhaul have shown. Natural disasters may be natural, but each state has a choice in how to meet them.

Second, ambassador Hoare rightly points out that one should perhaps applaud the progress being made rather than to note that improvements have a long way to go. My article neither sought to decry nor applaud any improvements, but simply to show where things stand, based partially on conversations with several people who have themselves worked in natural disaster mitigation in the country.

And despite the improvements that have been made, there is a real and substantive risks that North Korea’s disaster management improvement plans and ambitions will stop at being just that. In this realm, there should be little doubt that the government’s ambitions are high and praiseworthy. The problem is that we have seen too many examples of ambitions without implementation to conclude that they will in fact be realized. Oftentimes, the policy process, opaque as it is, often appears to stall, and political interest and attention may wane. In this, too, North Korea is not alone in the world.

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North Korea’s summer floods, 2020

Monday, August 17th, 2020

By: Benjamin Katzeff Silberstein

Flooding has been sweeping across North Korea for the past few weeks. As has been usual for the past few years, state media has been very forthcoming in reporting the damage. At least partially, one might suspect this forthrightness is directed to an international audience, not least in China, to signal that North Korea hopes for aid. (Quietly, of course, behind the scenes, because officially, the country doesn’t want it.)

First and foremost, however, the target audience is – as usual – domestic, and the state seeks to reassure the people that the leadership is always watching out for them. Here’s the Rodong coverage of Kim Jong-un’s trip to a flood-damaged area:

Kim Jong Un, chairman of the Workers’ Party of Korea, chairman of the State Affairs Commission of the Democratic People’s Republic of Korea and supreme commander of the armed forces of the DPRK, inspected Taechong-ri Area of Unpha County, North Hwanghae Province hit by flood.

Due to several consecutive days of torrential rain and rainstorm recently caused by the seasonal rainy front, the waterway levee gave way in the area of Taechong-ri of Unpha County, leaving more than 730 single-floored houses and 600-odd hectares of rice field inundated and 179 blocks of dwelling houses destroyed.

After hearing the report on the situation of the Taechong-ri area of Unpha County where lots of dwelling houses and a large area of arable land were submerged, the Supreme Leader personally went to the spot to learn about the situation and clarified tasks and ways in detail for the recovery of the damaged area.

Saying that he was really relieved to learn that there was no casualty as all the residents of Unpha County were evacuated to the safe area in advance, he called on leading organs in the county including Party and power organs, working people’s organizations and public security organs to responsibly conduct the work of putting up the residents who lost their homes at offices including those at the Party committee and people’s committee of the county, public buildings and separate houses, to stabilize their living and comfort them.

He ordered the relevant field to submit a document on supplying every household in the afflicted area with the reserve food grain of the chairman of the State Affairs Commission.

It is of priority importance to quickly supply sleeping materials, daily commodities, medicines and other necessities to the flood-affected people to stabilize their living as early as possible, he said, entrusting this task entirely to the departments of the Party Central Committee and families of its officials.

He gave an order to organize the flood damage rehabilitation headquarters with cadres of the relevant departments of the Party Central Committee and the Ministry of the People’s Armed Forces, and instructed the headquarters to report to him after correctly calculating the materials and forces needed for the rehabilitation, while sizing up the flood damage on the spot for starters.

The central designing force should be sent to newly build 800 model houses in the farm village of Unpha County hit by the flood and the project be completed at an earliest date possible and on the highest level, he said.

Saying he decided to mobilize the people’s army for the rehabilitation again, he ordered the people’s army to form a necessary force and urgently deploy it and to give precedence to the arrangement of the wrecked houses, roads and the zones with the people of the county.

Stressing the importance to take measures to ensure materials such as cement necessary for the rehabilitation, he gave an instruction to use the strategic reserve supplies of the chairman of the State Affairs Commission to meet the calculated amount.

He appealed to the Cabinet, the State Planning Commission, ministries and national institutions to actively cooperate in the rehabilitation of the flood-hit Unpha County, well aware of the Party’s intention.

(Source: Political News Team, “Supreme Leader Kim Jong Un Inspects Flood-Damaged Area in North Hwanghae Province,” Rodong Sinmun, August 7th, 2020.) 

Indeed, damage has been quite bad, as Washington Post reports here, but it’s not clear as of yet how it will add up in comparison with previous years:

The International Federation of the Red Cross said the floods have left at least 22 people dead and four missing, citing the Democratic People’s Republic of Korea Red Cross and the country’s State Committee for Emergency and Disaster Management.

The disaster adds to a troubling humanitarian situation in North Korea, whose weak economy has been further battered by the coronavirus pandemic.

The official Korea Central News Agency (KCNA) said at least 16,680 houses and 630 public buildings have been destroyed or flooded during the monsoon, with nearly 100,000 acres of crops damaged and many roads, bridges and railway tracks broken. A dam at a power station also gave way, it said.

(Source: Simon Denyer, “North Korea floods kill 22, approach nuclear reactor — but Kim doesn’t want help,” Washington Post, August 14th, 2020.)

Daily NK cites internal documents claiming that over 40 percent of terraced corn fields in North Hamgyong have flooded away. They also report, unsurprisingly, that the county visited by Kim personally is getting a disproportionate amount of attention and help:

Monsoon rains and strong winds have led to substantial damage in the grain-producing regions of North Korea’s west coast, leading to predictions that the country will face a poor harvest this year, Daily NK has learned.

“North Hamgyong Province is the center of the country’s corn production, but an [internal] statistical report on Aug. 3 said that 42% of terraced cornfields and farmland near rivers had been either washed away or flooded,” a source in North Hamgyong Province told Daily NK on Monday. “The report did not include data about farms tilled by individual farmers. Including those farms would mean that the actual damage [to farmland] is even greater.”

Regarding the situation in nearby South Hamgyong Province, the source told Daily NK that “South Hamgyong Province is the home of rice [production], but midway through the monsoon season approximately 30% of farmland has already been flooded.”

According to the source, the harvest this year in the region was actually better than last year until the start of the monsoon season. He pointed out, however, that “rice plants became inundated with water just as they were being fertilized, so there is talk that farmers will barely be able to meet the government’s autumn quota for military rice [rice going to the military].”

Farms in the coastal areas of South Pyongan Province have also suffered from flooding and crop damage, a source in the region said.

“There has been substantial damage to crops, with monsoon rains flooding fields in several areas near the central west coast and strong winds blowing over corn plants that were just beginning to mature,” the source said. “Farmland stretching across thousands of jongbo in Jungsan and Pyongwon have been damaged by salt water, which means we can’t expect normal harvest levels this year.”

One jongbo is equivalent to around 9,917 square meters.

Areas near Nampo, including Onchon and Gangso, were hit by monsoon rains and strong gales that felled telephone poles and roadside trees, according to the source, who also reported that dozens of farm houses have collapsed and their now-homeless former occupants have been evacuated to other structures on farms, including cultural halls and rooms used by work units.

RAPID CLEAN UP EFFORTS IN UNPA COUNTY

After North Korean leader Kim Jong Un visited North Hamgyong Province’s Unpa County to see the devastation wrought by a dyke that burst open, efforts to cleanup the damage are rapidly underway, a source in the area told Daily NK.

“The Supreme Leader came to inspect [the damage] in Unpa County personally, and the province has dispatched a storm trooper contingent made up of 300 party members along with another storm trooper unit made up of around 500 Kimsungilist-Kimjongilist Youth League members,” the source said.

“The authorities have also mobilized workers from various businesses in the province while [Unpa County] farmers, along with village and district-level inminban [North Korea’s lowest administrative unit], are working to process barren soil, build embankments, restore farmland and repair people’s homes,” he added.

People who have lost their homes in the area have been housed in cultural halls, guest houses, local inns or the houses of friends; however, county authorities have forced many to engage in the cleanup efforts, according to the source.

The military has mobilized soldiers to the area, including 280 soldiers selected from units under the “August 15 Training Center” along with two battalions from the 25th Brigade under Bureau 7 (a military engineers unit). The battalions have reportedly brought along mechanized equipment for the cleanup efforts. The soldiers have set up waterproof tents and are living in the area while cleaning up the damage.

On Aug. 7, Rodong Sinmun and other state-run media reported that Kim Jong Un visited Unpa County and ordered the construction of a new farming village to accommodate 800 families, as well as the release of grain reserves and emergency supplies for victims and those performing relief work.

The source confirmed that the authorities had ordered the completion of housing blocks accommodating two families each by Nov. 10.

“Military units along with the storm trooper units made up of provincial party members and members of the Youth League will build the houses,” the source said. “Overall responsibility for the project is held by both the Cabinet’s vice premier and the North Hwanghae Province Party Committee Director, and progress reports will be sent to the Supreme Leader.”

AN UNPA COUNTY-FOCUSED RELIEF EFFORT

North Korea is also holding a nationwide campaign to raise funds for the relief work and the construction of new houses in Unpa County, according to the source.

“Even though the damage [by the monsoon rains] is not limited to Unpa County, inminban around the country have been told that they must offer assistance to the area by sending support packages for affected residents and soldiers engaged in construction work by Aug. 13,” the source told Daily NK.

While the required contribution differs by region, the figure is believed to be KPW 20,000 for each household in Pyongyang’s Mangyongdae District and KPW 10,000 or 2.5 kilograms of rice for each family in Kaechon, South Pyongan Province. Families in Sariwon, North Hwanghae Province, have been told to either contribute KPW 15,000 per household or provide labor in lieu of a monetary payment.

On Monday, Korea Central News Agency and other state-run media reported that vehicles carrying the reserve grain sent by Kim Jong Un had arrived in Unpa County. The article was accompanied by photos of residents welcoming the delivery.

“This [kind of delivery] happened once before during the General [Kim Jong Il]’s reign, but people were deeply moved because it is the first time they have been provided with such a gift under Kim Jong Un,” the source said, adding, “Those in other regions are envious.”

(Source: Ha Yoon Ah, “N. Korea moves to cleanup monsoon damage across grain-producing regions,” Daily NK, August 12th, 2020.)

Resources for relief efforts are scarce. As Radio Free Asia reports here (in Korean), enterprises as well as private citizens are being ordered to contribute.

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What explains North Korea’s puzzling price stability?

Friday, July 17th, 2020

By Benjamin Katzeff Silberstein

Looking at the latest market price data from North Korea, things do not look like external conditions dictate that they should. Food prices are…low. Very low. In fact, for the July 1st price report, the average rice price for the three North Korean cities was the lowest on record since April 2019. Gasoline prices haven’t been this low since June of 2018. (Click for larger graphs.)

Average rice prices for Pyongyang, Sinuiju, and Hyesan. Data source: Daily NK.

Average gas prices for Pyongyang, Sinuiju, and Hyesan. Data source: Daily NK.

 

By themselves, these prices are not so surprising. Prices generally fluctuate with seasonal variation, in North Korea as everywhere else. Both gas and rice prices tend to drop around this time of year, at least over the past few years.

But there is nothing normal about 2020. In addition to harsh sanctions, Covid-19 has made almost everything more difficult to acquire from abroad, from fertilizer and food, to machine parts for industry. So these lower prices are puzzling, in a way because they would seem to indicate stability and normalcy at a time when there is nothing stabile and normal about the situation.

There are (at least) two possible explanations:

One is that North Korea’s external conditions are indeed steadily improving, and returning to some sort of normalcy. Strong signs suggest that trade between North Korea and China is picking back up, as relations deteriorate between the US and China and the North Korean issue becomes less and less central on the global stage. As Daily NK has reported, North Korea has been importing items such as construction materials and food from China, both in June and July. Gas prices, moreover, may partially be untouched by Covid-19 because much of the trade goes through a pipeline near Dandong.

Another possibility is that prices are going down because people simply cannot afford higher prices. This report on train ticket prices is perhaps instructive. In the words of one source inside North Korea: “Despite the fall in the number of train passengers, [black market vendors] seem to believe that raising prices would [make it harder to sell tickets],” the source said. “In other words, you could say that a ‘market price’ [for tickets] has appeared that train riders are willing to accept.” In other words, if consumers on a given market have a reservation prices – the highest price they’re willing to pay – underneath what sellers would really charge given the supply at hand, sellers can either cut down on their profit or minimize their losses by selling at a lower prices than those dictated by economic conditions.

As always, information is in short supply, and these market prices raise more questions than they answer.

Update, 23/7/2020:

Part of what’s so puzzling about all this is that reports keep suggesting that the regime is cracking down continuously and with growing vigor against cross-border smuggling and the like. According to this report by Daily NK, Pyongyang recently ordered provincial authorities to intensify their border monitoring.

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The North Korean economy is doing badly, but keep some perspective

Tuesday, June 23rd, 2020

By: Benjamin Katzeff Silberstein

Sanctions and Covid-19 have fused together to put the North Korean economy in what can only reasonably be described as an awful situation. Trade first plummeted through sanctions, and then even further because of North Korea’s and China’s anti-Covid19 measures. And the fall continues, as these figures in Hankyoreh show:

Figures from the Korea International Trade Association (KITA) and Chinese customs authorities reviewed on June 18 show a major drop in the value of North Korean goods being exported to the Chinese market: US$10.7 million in January and February (-71.7% year on year), US$600,000 in March (-96.2%), and US$2.2 million in April (-90%). The value of North Korean exports to China, which stood at US$2.63 billion in 2016, has fallen since economic sanctions were toughened, decreasing to US$1.65 billion (-37.3%) in 2017 and US$195 million in 2018 (-88.2%). Exports rebounded in 2019, to US$285 million, but that was still less than a tenth of the value of exports in 2016.

But how bad are things?

Bloomberg ran an article yesterday with the angle that the North Korean economy is the “worst” in two decades, and that this is why the country is lashing out against South Korea with renewed vigor. To support the former claim, it cites figures claiming that the country’s economy will contract by a total of 6 percent this year due to the combination of sanctions and Covid-19.

But how reasonable is this take?

There is no doubting that things are bad, but some context is badly needed. One of course cannot equate an economic contraction with the overall situation. (Never mind that any number on this will be qualified guesswork at best.) A contraction is only the economy shrinking, and it means nothing if we don’t know what the starting point is. In 1997, North Korea was perhaps at the height of a devastating famine, after the economy crumbled following the collapse of the Soviet Union, and China vastly scaling back support.

Today, North Korea may be in an economic crisis of sorts. But it entered it on the back of several years of steadily increasing exports to China. These exports, in fact, grew by more than a factor of ten between 1998 and the record year of 2013. So the situation is so different that a comparison is hardly meaningful.

This is also true for the food situation. According to numbers from the World Food Program and the Food and Agriculture Organization, whose data is questionable but highly valuable, food production stood at 3.3 million tonnes in 2008, not an unusually low figure for the time. Contrast this with the projection that this year’s harvest will be 4.6 million tonnes. Not great, lower than it should be, lower than a few years ago, yes. But still not nearly the level of the disaster years.

Also, it is crucial to remember that even in ordinary times, a not insignificant proportion of trade with China occurs off the books. Throw an increasingly lower Chinese sense of caring what the US thinks about its sanctions implementation into the mix and you’ve got, well, likely a lot more trade happening under the radar. This is what news reports from inside North Korea have been saying for quite a while.

Not that things aren’t bad, or that North Korea’s recent actions have to do with sanctions (they almost certainly do). But don’t forget about context or proportions.

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Why Kim Jong-un “came back” at a fertilizer factory

Wednesday, May 6th, 2020

By: Benjamin Katzeff Silberstein

The choice of a fertilizer factory inspection as the place for Kim Jong-un to “return” after his three-week absence was no coincidence. On May 2nd, Rodong Sinmun reported that Kim had toured and cut the tape at the Sunchon Fertilizer Factory. To do this in the month of May especially is highly symbolic, and we should understand it as a signal that Kim and the state are very serious about alleviating North Korea’s perpetually difficult food situation.

Sure, in the budget report at the Supreme People’s Assembly in the middle of last month, the claim was repeated of a bumper harvest last year. This claim is extremely unlikely to be true, as the numbers show, but should not be read literally in any case. Indeed, given North Korea’s economic situation, the food situation is remarkably stable, although always difficult. But still, these two claims aren’t necessarily inherently contradictory. Kim can claim a bumper harvest while also working to stabilize the food situation over the long run. Fertilizer has long been an achilles’ heel for North Korean agriculture, and historically the country has been highly dependent on chemical fertilizer. One of the main catalysts for the famine in the 1990s was the Soviet Union and China cutting of oil subsidies. North Korea’s ability to produce such fertilizers, whose production process is very energy-intensive, subsequently collapsed. The Rodong article announcing Kim’s “return”, unsurprisingly, highlights the completion of the fertilizer factory as a victory for North Korea’s independence and self-reliance.

This focus on fertilizers is not unique in North Korean media. Just the other day, on May 5th, an article in Rodong lauded the factory construction as a crucial step for North Korea to remain independent and reject “reform and opening”. Another the same day covered a new organic fertilizer factory in Sinyang County. Articles about fertilizer factories – particularly organic ones – have been highly prolific, especially since around 2016. That focus also isn’t new. The extensive use of chemical fertilizer damaged North Korea’s soil badly, and Kim Jong-il once gave an entire speech wholly focused on the supremacy of organic fertilizers.

Just like the focus on fertilizers, it’s no coincidence that it happens in May. This month marks the beginning of the main planting season in North Korea. The food security situation is already concerning, not least with the country’s coronavirus prevention measures keeping crucial shipments of agricultural inputs such as seeds reportedly backed up and waiting to enter the country. China has previously provided crucial fertilizer aid to North Korea (in addition to grain shipments), and perhaps still does so. But with China highly concerned about keeping re-infections out, as well as watching out for its own stability first and foremost, it may be more reluctant than it otherwise would to provide aid to North Korea to make up for a difficult harvest, should it be necessary.

Moreover, a significant question mark remains around North Korea’s fertilizer production efforts. Oil is still a central input for fertilizer manufacturing, as well as for irrigation efforts. How does North Korea intend to operate and power factories such as the one Kim visited in the long run? Regardless of what factories it builds, resources scarcity will continue to be a significant stumbling block for now.*

 

*(For some reading related to this issue, see the recent debate between Hazel Smith and James Kelly at PacNet.)

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Fertilizer shortages in North Korea due to border lockdown

Wednesday, April 1st, 2020

Benjamin Katzeff Silberstein

Reports Daily NK:

North Korea’s farms in the country’s breadbasket are suffering from a lack of fertilizer and other agricultural supplies amid the shutdown of the Sino-North Korean border, Daily NK sources have reported.

“Farms are lacking agricultural supplies throughout the province even as we are heading into the planting season,” a North Hwanghae Province-based source reported on Mar. 31.

North Korean farms typically focus on preparing for the year’s farming during January to March, acquiring needed fertilizer, pesticides and other supplies.

The country’s agricultural sector, however, relies on imports of agricultural supplies and typically trading companies are putting on all their efforts into acquiring supplies during this period.

With the closure of the Sino-North Korean border and a general halt in trade and smuggling across the border, however, farms are not getting the supplies they need this year.

“North Korean authorities are telling farms to figure out things themselves, even telling them to make their own electricity,” the source said. “Farmers are upset.”

North Korean officials have moved to increase supplies of fertilizer to farms by ordering fertilizer factories throughout the country to increase their production beyond this year’s original production quotas.

“Factory managers are full of anxiety because they have to create massive amounts of fertilizer – more than they are accustomed to,” the source noted.

North Korean cities and counties typically have their own fertilizer factories. Most of these factories, however, are small-scale and are unable to produce enough to supply all the farms in their respective areas.

(Source: Ha Yoon Ah, “N. Korea’s farms face shortages of fertilizer and other supplies,” Daily NK, April 1st, 2020.)

More than immediate rice prices rising, this sort of news is perhaps the most concerning in the long run, and we’ll only begin to see the effects in a few months.

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North Korea and the coronavirus: why internal controls may be working

Tuesday, February 25th, 2020

By: Benjamin Katzeff Silberstein

At this point, it seems unlikely that not a single case of the coronavirus would have reached North Korea, despite government media claims. The border to China is quite porous even when controls are tight, and the provinces bordering North Korea had seen, as of last week, some 200 cases. The government has ordered schools shut for one month starting five days ago, on February 20th. Unsurprisingly, it has taken special care to protect Pyongyang from the virus, and face mask distribution goes first to the one percent.

The economic effects of all this are very troubling. As this blog has previously noted, markets and society overall seem to be taking the border closure much more seriously than sanctions, and have reacted with much more anxiety than when new rounds of sanctions measures have been levied by the international community in the past. Prices have climbed quite drastically, as we shall look at in some detail in this post. They have risen by much more in Hyesan than in the rest of the country, which tells us something interesting about the government’s internal controls. That differences in market prices are increasing could be a sign that internal controls on travel across provincial boundaries are being enforced quite effectively. When traders cannot as effectively move their goods to where demand is the highest, prices will increase. One also has to bear in mind that Hyesan is very dependent on trade with China to begin with, and we should therefore expect prices there to increase disproportionately.

(My apologies for the awkward look of the graphs — please click for full size!)

In normal times too, prices tend to be higher in Hyesan than in other cities. But usually not by that much. Notice what happens around  January, though: prices skyrocket all over the country but they do so by much more in Hyesan.

This is particularly evident when we look at price differences. Normally, prices are between 5–10 percent higher in Hyesan than in both Pyongyang and Sinuiju. Since the border closure, however, they have gone beyond 20 percent over both cities, according to price observations from the past few weeks. 
Again, the border closure to China may be a central part of the explanation. But rice itself isn’t typically a good that North Korea relies so much on Chinese imports for. We don’t know the precise proportions, but likely, most rice consumed in North Korea in an ordinary year is grown within the country. A likely conclusion is, therefore, that the closure of provincial borders within North Korea is being enforced with some efficiency, making it much more difficult for market traders to transport goods such as rice between different markets in the country. This adds to the already stark economic difficulties from the closure of the border to China. Many other prices have risen drastically as well: gas prices in Hyesan are now 46 percent higher than in late December of last year, and 38 percent higher in the country as a whole. The government has attempted, reportedly with some success, to institute price controls on the markets, but as the story goes with such state attempts in general, they are unlikely to last as black markets arise to respond to shortages.

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Almost a year after the alarm bells: following up North Korea’s food crisis (and an aid success story?)

Thursday, February 20th, 2020

By Benjamin Katzeff Silberstein

There exists two very radically different narratives on North Korea’s food situation and harvest of last year. The strangest pat of the story is that the state, likely through its different arms, are able to hold both stories at once. The first was the one trumpeted out by the North Korean government and international aid agencies last year (as well as some scholars), that North Korea was facing a famine. The second one is from Kim Jong-un’s plenum speech in late December, where he claimed that North Korea’s harvest was the largest one “on record“.

The Red Cross (IFRC) released an assessment report last month, and though it leaves many questions unanswered, it’s a fascinating and much more detailed read than most assessments of North Korea’s food situation over the past two years. I list some of the highlights below.

First, the most remarkable finding of the report is perhaps how big of a difference aid and support to irrigation can make. I have previously written that the most likely reason the food situation turned out better than expected is that China stepped in with aid. This still seems to be the most plausible scenario, but it is also possible that aid came not in the form of food deliveries, but in equipment and fuel for irrigation, most likely it was a mix of both. If the report is to be believed, and I see no reason to doubt its veracity and methodological grounding, we can extrapolate that improving irrigation can more than double harvests in certain environments. The table below comes from page 5 of IFRC, “DPR Korea: Drought and Food Insecurity Final Report DREF Operation n° MDRKP013,” 17 January, 2020, http://adore.ifrc.org/Download.aspx?FileId=286144, accessed February 20, 2020:

(Note: mt/ha = metric ton/hectare. Click to enlarge.) 

As the table shows, expected versus actual harvests of early crops more than doubled in three of the communities surveyed. One farmer interviewed in the report says that thanks to the IFRC water pumps, their harvest was the best in a decade in the end, and not the worst, as the international community first projected. The total cost of the operation was the equivalent of less than $250,000 for a strong impact on communities holding 34,414 people. Scale that up by 100 and we have $25 million for measures that could drastically help around 3.5 million people. And so on and so forth. Of course, this isn’t a precise or grounded calculation by any means, but it does give a sense of the proportions at hand. $25 million is a third of what North Korea spent on tobacco imports from China last year. Remedying difficult farming conditions isn’t necessarily all that expensive, but can be very, very effective. (Before drawing any certain conclusions from this, do be sure to read the report. It highlights the specific conditions of the localities in question.) It is often said that North Korea’s geographical features make it naturally inhospitable to agriculture and food production, but efficiency and capacity could be vastly improved through investments in agricultural infrastructure.

Second, even with the improvements that came after the initial food crisis alarm bells, none of them make it even remotely likely that Kim Jong-un’s claim of the “best harvest on record” was true. The report highlights some of the difficult weather conditions the country faced in 2018 and 2019. For example:

The agricultural production this yea r(2019) in DPRK was seriously impacted by the after-effects of the droughts that have occurred consecutively over the past 5 years.The situation was worsened by th elittle snowfall last winter and almost no rainfall in the 1st quarter of this year. The unusually low levels of precipitation continued in April and May,combined with higher than usual temperatures. As a result, the water levels in the reservoirs are much lower than normal. These conditions have remained the same during the summer months.

(Source: p. 3 of the report.)

Third, the report raises several intriguing questions about the IFRC in North Korea. To the best of my understanding, the IFRC has a chapter in North Korea but like all organizations in the country, it is for all intents and purposes a government entity. The report references its personnel several times — ” DPRK RCS has a good volunteer network established in these areas” (p. 2), “the team also coordinated with and consulted the Red Cross branches, local authorities, and the State Hydro-Meteorological Agency” (p. 2), “workshop…with community people” (p. 8), et cetera — and it would be very interesting to learn more about how the organization functions on the ground, how its staff are recruited, what “volunteer” actually means, et cetera.

Notwithstanding the questions that reports such as this one give rise to, they are crucial resources for knowledge on North Korean agriculture and food production.

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Did North Korea really see its best harvest “on record last year?

Friday, January 17th, 2020

By: Benjamin Katzeff Silberstein

As I and Peter Ward discovered some weeks ago, the claim by Kim Jong-un that North Korea had its “best harvest on record” did not make it into the English-language summary of Kim’s plenum speech put out by KCNA. Several media outlets have picked up on this claim, and that is not surprising. Not even a year ago, last spring and summer, both the North Korean government and UN organs sounded the alarm bells that North Korea’s harvest was so disastrous as to suggest a famine might be looming.

So what happened?

First of all, it should be noted, as always, that one must be extremely cautious in studying data on anything related to the North Korean economy. Most people who follow North Korea are well aware of this but especially when it comes to an issue like this, one cannot be cautious enough.

I focus here on the claim by Kim that the harvest was the best “on record”. It may well have been a good harvest, or at least a much better one than anticipated. This seems to be the case. The only attempt I’ve seen at a numerical estimate comes from South Korea’s Rural Development Administration. They estimate that North Korea’s harvest grew by around two percent in 2019 over 2018. This sounds fairly plausible and could perhaps be explained by weather conditions unexpectedly improving, or fertilizer donations from China, and the like. Or the government and FAO’s projections were simply wrong from the beginning.

To understand why it is so unlikely that this year’s harvest would be the best on record, we have to look at what ‘the record” really says. The following graph shows North Korean harvest figures between 1990 and 2017, as recorded by the FAO. These figures are not independently recorded or verified but, to the best of my knowledge, generated by FAO in cooperation with the North Korean government, or provided directly by the government. Usually, that would be a problem, but here, it’s actually quite helpful since it helps us analyze the claim about the “record”.

Graph by NK Econ Watch/Benjamin Katzeff Silberstein. Data source: FAOSTAT.

I downloaded these numbers from the FAO database some months ago. For whatever reason, I’m unable to access the data at their website at this time of writing, and therefore, can’t fill in the data further back. This data also differs somewhat from other data on North Korean harvests from the World Food Program and FAO. Still, they match quite closely with other data the two organizations have published in recent years about North Korean food production. Again, keep in mind that this data is produced and published in concert with the North Korean government. In that sense, these numbers are the “record”.

Over the past few years, estimated harvests have gravitated between four and five million tons in milled rice equivalent.  (You can read more here about what that actually means.) In 1993, North Korea’s record of harvests notes 7.5 million tons. Harvests hovered around 8 million tons in the 1980s – again, to the best of my recollection, as I can’t access the FAO statistics database numbers of North Korea at this time of writing.

Graph by NK Econ Watch/Benjamin Katzeff Silberstein. Data source: WFP/FAO. 2019 is a projected figure.

For Kim’s claim to be true, therefore, this past year’s harvest would have had to go from around five million tons in 2018, to surpassing eight million tons in 2019. I am no agricultural economist, but Kim would likely need something like a miracle of nature for this to happen. I am not aware of North Korea’s landmass suddenly doubling, for example, or the amount of arable land increasing by one third overnight. Therefore, Kim’s claim is most likely, beyond reasonable doubt, simply not true. Note also that outlets such as Daily NK have reported that the government has taken predatory measures against grain trade as a result of what the outlet describes as “poor agricultural yields”.

In other words, there is very little to back up the claim made by Kim (and subsequently by North Korea-affiliated Choson Sinbo). This claim is a break with a pattern over the past few years, where North Korean media has been very frank – often, probably exaggerating – in describing difficulties and damage caused by flooding and inclement weather. There are several reasons why this may have changed with regards to the harvest. For one, food security a very basic need for any country. With bad food security, North Korea appears weak in the face of sanctions. It would hardly be the first time the North Korean government lied for strategic, propaganda purposes. It is also possible that harvests were much better than anticipated, and that Kim’s claim is merely a strong exaggeration. Perhaps “best on record” should be read as a superlative, rhetorical claim rather than a literal one. At the end of the day, we simply don’t know, and the ways of the inefficient North Korean bureaucracy are mysterious.

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