Archive for the ‘Agriculture’ Category

North Korea’s grain imports tripled in 2017

Monday, March 5th, 2018

Institute for Far Eastern Studies (IFES)

North Korea’s grain imports from China last year showed a threefold increase over the same period of the previous year. Having analyzed a set of data released by the Chinese General Administration of Customs, Tae-jin Kwon, a South Korean expert on North Korean agriculture and the head of the Center for North Korea and North East Asia Studies of the GS & J Institute, disclosed this analysis to the Voice of America on February 14.

This means North Korean grain imports have more than tripled from 54,683 metric tons imported in 2016—the amount of imports totals $67.33 million, a 2.3-fold increase from $27.91 million in the previous year.

Wheat flour (81, 654 tons) made up 46 percent of the total North Korean imports, accounting for the largest part of the imports. This is followed by corn (57,887 tons) and rice (36,408 tons), along with starch and soybeans. In particular, corn imports grew more than 16 times compared to 3,125 tons the year before, and flour imports, which stood at 7,000 tons in the previous year (about twelvefold).

During December 2017, North Korea’s grain imports from China grew more than four times the amount it imported in the same period a year before. In particular, imports of flour increased to 25,000 tons, more than 22 times from the same period last year.

Last year, as the crackdown on the DPRK-China border tightened due to the international sanctions on North Korea, formal grain imports seem to have increased while the informal imports were restricted.

Although North Korea’s grain production in 2017 seems to have declined slightly from the previous year, its grain imports from China are expected to remain at the same level.

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Kim Jong-un’s new model farms

Thursday, February 8th, 2018

In the most recent issue of Kumsugangsan, the North Koreans highlighted the renovation work of Poman-ri (one of the eight scenic vistas of the songun era).

Here is the article:

A quick check with the imagery on Planet Labs does indicate that there was a new health complex built (normal at the town level, but only specially allocated at the village level), new apartment buildings constructed, and a school appears to have been renovated (also very common in North Korea these days).

Pictured above (Top): Poman-ri as seen on Google Earth in 2015-8-26 (Bottom): Planet imagery from 2018-2-3 showing renovated area.

This is not the first farm to be “renovated” in the Kim Jong-un era. It is also not the largest village to be renovated (so far it appears to be one of the smallest). So what is going on here? North Korea appears to be in the process of constructing new “model farms” in the KJU era. Previous “model farms,” such as Chongsan-ri in Nampho, are primarily associated with revolutionary works of Kim Il-sung or Kim Jong-il. These new farms, however, are intended to spearhead Sci-Tech achievements under Kim Jong-un which can be replicated across the country.

Jangchon-ri  (AKA “DPRK-Libya Friendship Jangchon Co-op Farm”) on the outskirts of Pyongyang appears to have been the first of Kim Jong-un’s new model farms. Consequently, it has received the most attention in the official media; it has been visited at least twice by Kim Jong-un; and it receives regular foreign tourists, journalists, and even foreign NGOs.

Images via Google Earth. Top dated 2014-3-13 (before). The bottom is dated 2015-5-20 (after)

KCNA reports from Kim Jong-un’s first visit to the farm after it was renovated (2015-6-30):

Kim Jong Un, first secretary of the Workers’ Party of Korea, first chairman of the DPRK National Defence Commission and supreme commander of the Korean People’s Army, gave field guidance to the Jangchon Vegetable Co-op Farm in Sadong District, Pyongyang City, whose looks have undergone a radical change to be a model and a standard of the socialist rural cultural construction.

He set forth a task to build the farm into an exemplary farm and icon of greenhouse vegetable production when providing field guidance to the farm associated with the immortal history of leadership given by President Kim Il Sung and leader Kim Jong Il in June last year. He guided the layout for the construction of Jangchon area several times and took benevolent measures for settling the issues arising in it.

He went round the mosaic depicting smiling Kim Il Sung, a monument to the revolutionary activities of Kim Il Sung and Kim Jong Il, the room for the education in the revolutionary history and the room dedicated to the history of the farm.

He recalled that the farm developed into a dependable producer of vegetables under the warm and meticulous care of Kim Il Sung and Kim Jong Il who made indefatigable efforts to the last moments of their lives to provide the Pyongyang citizens with fresh vegetables all the year round.

He went round the hall of culture, science and technology disseminating center, Jangchon health complex, modern dwelling houses and other places to learn about the construction in detail.

He praised the farm for building the hall of culture as well as a national art theatre so that the farmers may fully enjoy a cultural and emotional life and constructing a nice park and a leisure ground having a volleyball court, a swimming pool, a roller-skate ring and a fishpond.

He was satisfied to see the library, e-reading room and technology study room in the science and technology disseminating center and modern equipment in the soil analysis room and the room for examining damage done by insects.

Appreciating the successful construction of modern dwelling houses, in particular, he was pleased that the farm carried out the party’s policy of making an effective use of natural energy and turning the village into an orchard by equipping each house with solar water heater, solar cells and a methane gas supply system and planting fruit trees around each house.

He went round mud-walled plastic sheet greenhouses and arch-style chain greenhouses to learn in detail about the vegetable production and management of the farm.

He enjoyed a bird’s-eye view of the farm from the observation deck.

He praised the Pyongyang City for working an eye-opening miracle in the socialist rural cultural construction as required by the party and being able to proudly greet the grand festival in October.

He extended thanks in the name of the Party Central Committee to farmers of the farm and officials and other working people in Pyongyang City for making a positive contribution to turning the Jangchon area into a spectacular farm reminiscent of a rural city as required by the party.

It is the resolution and will of the party to bring about a radical turn in the rural cultural construction with this farm as an example and torch, he said, giving Pyongyang City an instruction to push ahead under a plan with the work to spruce up well the farms on the outskirts of the city on the basis of the successes and experience already gained.

He expressed expectation and belief that Pyongyang City would take the lead in the drive to implement the behests of the leaders and uphold the party policies in the future as a political, economic and cultural hub of socialist Korea having the mission to hold aloft the banner of the three revolutions-ideological, technical and cultural.

He was accompanied by Hwang Pyong So, Choe Ryong Hae and Ri Jae Il.

The words in bold above indicate the types of facilities that are to be constructed at all of the new model farms. These types of facilities are already common at the city- and town-level, but still relatively rare at the village level. It would also be interesting to know if this farm (and other similar model farms) operate under different agriculture policies–such as de-facto family plots, or perhaps some flexibility to make agricultural decisions on the spot. Time will tell.

These types of projects are typically rolled out at the provincial level, so other than Jangchon-ri (Pyongyang) and Poman-ri (North Hwanghae), what other model farms can we point to that are being renovated under this policy?

1. Thaesong-ri (Nampho): This farm was featured on KCTV on 2017-9-21, and miraculously it has not been deleted by YouTube). KCTV described the village as a model village with new facilities that are pleasure to live and work in.

I have previously mentioned this village in Radio Free Asia.

2. Sokha-ri (North Phyongan): This farm was featured on KCTV on 2018-1-9, but YouTube has since deleted the material. Shame on them.

3. Sinchang-ri (South Hwanghae): This farm was featured on KCTV on 2017-9-20. This village has actually undergone at least two rounds of renovations. I believe the first round was done because the village is next to a popular road artery (North Korea has long been cleaning up villages long the main roads). The second round of renovations is due to the new model farm policy under Kim Jong-un.

Pictured above (Top): 2006-12-25 (Middle): 2014-3-20–showing completed first renovation (Bottom): 2016-10-23–showing completed second renovation in the new model farm style.

4. Jikha-ri (North Hamgyong):  This was also featured on KCTV on 2017-11-5, but has also been deleted by YouTube. I previously pointed it out to RFA on 2016-6-22.

Image above (Top): 2015-9-20 (Bottom): 2016-5-7–showing that the village is under renovation.

5. Phyongsu-dong (South Hamgyong): According to imagery on Planet.com, renovation of this farm has been completed, but I have not see it appear in the North Korean media to date. I previously mentioned it in RFA here.

6. Songchon-dong (Kangwon): This farm renovation has yet to appear in the official media (as far as I am aware). I previously reported in RFA that is sits just outside the security perimeter of Kim Jong-un’s Wonsan compound:

Image dates (Top): 2016-2-26 (Middle): 2017-2-14 (Bottom): Planet image from 2018 showing construction continues to progress.

This is not the only village to be renovated in Kangwon. However, I believe it is the only renovation project in the province related to this new series of model farms. Another village in south Kangwon Province, Thaebek-ri (38.574028°, 127.673046°), has also been renovated in the last few years, and several other farms in Kangwon were renovated as part of the Sepho Tableland Project.

Below is the information that remains TBD.

1. Manbok-dong (Rason): This area in Sonbong was formerly named Paekhak-ri, and it was the site where the North Korean government constructed new housing following floods in the summer of 2015. I could be wrong, but I believe that the post-flood housing is being pragmatically named as the new model farm in the city. However, I could be wrong. I searched for other village renovation in Rason on Planet Labs imagery and Google Earth, but did not find anything significant.

 

2. South Phyongan: I am still unsure which village in South Phyongan will be designated as the model farm to be built in this new style. I reported in RFA that lots of housing around Pyongyang Airport was being renovated back in May 2017, some of which is in South Phyongan, but none of these housing projects seem to match the new model farm design. According to a later KCTV report on 2017-11-20 (before it was deleted by Youtube), the Ministry of Coal Mining (석탄공업성), Ministry of Forestry (림업성), National Tourism Bureau (국가관광총국), and the Korea Oceanic Company (조선대양총회사) built new housing in the Pyongyang International Airport District. 1,000 homes were built earlier than scheduled and work was continuing on the remaining houses. However, it is possible that construction on the province’s new model farm has not yet begun in this province.

3. Jagang Province: I have searched the North Korean media, Google Earth imagery, and Planet imagery, but have not seen where construction on a new model farm has begun.

4. Ryanggang Province:  I have searched the North Korean media, Google Earth imagery, and Planet imagery, but have not seen where construction on a new model farm has begun.

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Kim Jong-un’s 2018 new year address

Monday, January 1st, 2018

Below I have posted the economic section of Kim Jong-un’s 2018 new year speech in English and Korean:

Comrades,

동지들!

This year we will mark the 70th anniversary of the founding of the glorious Democratic People’s Republic of Korea. To mark the 70th anniversary of their state with splendour is of real significance for the great people, who have raised with dignity the status of their socialist country, the greatest patriotic legacy of the great Comrades Kim Il Sung and Kim Jong Il, to that of a strategic state recognized by the world. [Translation note: In the Korean version below, Kim Il-sung and Kim Jong-il are not mentioned by name, only by title]

올해에 우리는 영광스러운 조선민주주의인민공화국창건 일흔돐을 맞이하게 됩니다.위대한 수령님과 위대한 장군님의 최대의 애국유산인 사회주의 우리 국가를 세계가 공인하는 전략국가의 지위에 당당히 올려세운 위대한 인민이 자기 국가의 창건 일흔돐을 성대히 기념하게 되는것은 참으로 의의깊은 일입니다.

We should make constant innovations and continued progress until we win the final victory of the revolution by carrying on the tradition of heroic struggle and collective innovation which adorned the founding and course of development of Juche Korea. A revolutionary general offensive should be launched to achieve fresh victory on all fronts of building a powerful socialist country by taking the historic victory in the building of the DPRK’s nuclear forces as a springboard for fresh progress.

우리는 주체조선의 건국과 발전행로에 빛나는 영웅적투쟁과 집단적혁신의 전통을 이어 혁명의 최후승리를 이룩할 때까지 계속혁신,계속전진해나가야 합니다.공화국핵무력건설에서 이룩한 력사적승리를 새로운 발전의 도약대로 삼고 사회주의강국건설의 모든 전선에서 새로운 승리를 쟁취하기 위한 혁명적인 총공세를 벌려나가야 합니다.

“Let us launch a revolutionary general offensive to achieve fresh victory on all fronts of building a powerful socialist country!” This is the revolutionary slogan we should uphold. All officials, Party members and other working people should launch an all-people general offensive to frustrate the challenges of the hostile forces who are making last-ditch efforts and raise the overall strength of our Republic to a new stage of development as they brought about a great upsurge in socialist construction overcoming all difficulties through the great Chollima upswing after the war.

《혁명적인 총공세로 사회주의강국건설의 모든 전선에서 새로운 승리를 쟁취하자!》 이것이 우리가 들고나가야 할 혁명적구호입니다.모든 일군들과 당원들과 근로자들은 전후 천리마대고조로 난국을 뚫고 사회주의건설에서 일대 앙양을 일으킨것처럼 전인민적인 총공세를 벌려 최후발악하는 적대세력들의 도전을 짓부시고 공화국의 전반적국력을 새로운 발전단계에 올려세워야 합니다.

A breakthrough should be made in reenergizing the overall economic front this year, the third year of implementing the five-year strategy for national economic development.

국가경제발전 5개년전략수행의 세번째 해인 올해에 경제전선전반에서 활성화의 돌파구를 열어제껴야 하겠습니다.

The central task facing socialist economic construction this year is to enhance the independence and Juche character of the national economy and improve the people’s standard of living as required by the revolutionary counter-strategy put forward by the Second Plenary Meeting of the Seventh Central Committee of the Party.

올해 사회주의경제건설에서 나서는 중심과업은 당중앙위원회 제7기 제2차전원회의가 제시한 혁명적대응전략의 요구대로 인민경제의 자립성과 주체성을 강화하고 인민생활을 개선향상시키는것입니다.

We should concentrate all efforts on consolidating the independence and Juche character of the national economy.

인민경제의 자립성과 주체성을 강화하는데 총력을 집중하여야 합니다.

The electric-power industry should maintain and reinforce the self-supporting power generation bases, and direct a great deal of efforts to developing new power sources. A dynamic campaign should be conducted to drastically increase thermal power generation, and lower the loss of electric power and increase its production as much as possible by maintaining and reinforcing imperfect generating facilitates. Provinces should build power generation bases to suit their local features and put power generation at the existing medium and small-sized power stations on a normal footing to satisfy the needs of electric power for local industry by themselves. Alternated production should be organized scrupulously throughout the country, and a vigorous struggle waged against the practices of wasting electric power to make effective use of generated electric power.

전력공업부문에서는 자립적동력기지들을 정비보강하고 새로운 동력자원개발에 큰 힘을 넣어야 합니다.화력에 의한 전력생산을 결정적으로 늘이며 불비한 발전설비들을 정비보강하여 전력손실을 줄이고 최대한 증산하기 위한 투쟁을 힘있게 벌려야 합니다.도들에서 자기 지방의 특성에 맞는 전력생산기지들을 일떠세우며 이미 건설된 중소형수력발전소들에서 전력생산을 정상화하여 지방공업부문의 전력을 자체로 보장하도록 하여야 합니다.전국가적인 교차생산조직을 짜고들며 전력랑비현상과의 투쟁을 힘있게 벌려 생산된 전력을 효과적으로 리용하기 위한 된바람을 일으키도록 하여야 합니다.

The metallurgical industry should further improve the Juche-oriented iron- and steel-making technologies, increase the iron production capacity and drastically raise the quality of metallic materials in order to satisfy the needs of the national economy for iron and steel. It is necessary to ensure a preferential, planned and timely supply of electricity, concentrated iron ore, anthracite, lignite, freight wagons, locomotives and funds for the metallurgical industry. By doing so, we can fulfil next year’s iron and steel production plans and make the industry Juche-oriented without fail.

금속공업부문에서는 주체적인 제철,제강기술을 더욱 완성하고 철생산능력을 확장하며 금속재료의 질을 결정적으로 높여 인민경제의 철강재수요를 충족시켜야 합니다.금속공업부문에 필요한 전력,철정광,무연탄,갈탄,화차와 기관차,자금을 다른 부문에 앞세워 계획대로 어김없이 보장하여 다음해 철강재생산목표를 무조건 수행하며 금속공업의 주체화를 기어이 완성하도록 하여야 하겠습니다.

The chemical industry should step up the establishment of the C1 chemical industry, push the projects for catalyst production base and phosphatic fertilizer factory as scheduled, and renovate and perfect the sodium carbonate production line whose starting material is glauberite.

화학공업부문에서 탄소하나화학공업창설을 다그치고 촉매생산기지와 린비료공장건설을 계획대로 추진하며 회망초를 출발원료로 하는 탄산소다생산공정을 개건완비하여야 합니다.

The machine-building industry should modernize the Kumsong Tractor Factory, Sungri Motor Complex and other factories to develop and produce world-level machinery in our style.

기계공업부문에서는 금성뜨락또르공장과 승리자동차련합기업소를 비롯한 기계공장들을 현대화하고 세계적수준의 기계제품들을 우리 식으로 개발생산하여야 합니다.

The coal and mineral production and rail transport sectors should make concerted efforts to make the country’s self-reliant economic foundations prove their effectiveness.

나라의 자립적경제토대가 은을 낼수 있게 석탄과 광물생산,철도수송에서 련대적혁신을 일으켜야 합니다.

Notably, the rail transport sector should make the best use of the existing transport capacity by making transport organization and control more scientific and rational, and maintain discipline and order in the railways as rigid as in the army, so as to ensure an accident-free, on-schedule rail traffic.

특히 철도운수부문에서 수송조직과 지휘를 과학화,합리화하여 현존수송능력을 최대한 효과있게 리용하며 철도에 군대와 같은 강한 규률과 질서를 세워 렬차의 무사고정시운행을 보장하도록 하여야 합니다.

A turn should be brought about this year in improving the people’s standard of living.

올해에 인민생활향상에서 전환을 가져와야 합니다.

Light-industry factories need to transform their equipment and production lines into labour- and electricity-saving ones and produce and supply more diversified and quality consumer goods with domestic raw and other materials, and provinces, cities and counties should develop the local economy in a characteristic way by relying on their own raw material resources.

경공업공장들의 설비와 생산공정을 로력절약형,전기절약형으로 개조하고 국내원료와 자재로 다양하고 질좋은 소비품들을 더 많이 생산공급하며 도,시,군들에서 자체의 원료원천에 의거하여 지방경제를 특색있게 발전시켜야 합니다.

The agricultural and fishing fronts should effect an upswing. We should introduce seeds of superior strains, high-yield farming methods and high-performance farm machines on an extensive scale, do farming scientifically and technologically so as to fulfil the cereals production plan without fail, and boost the production of livestock products, fruits, greenhouse vegetables and mushrooms. We should enhance our ship building and repair capacities, launch scientific fishing campaigns, and reenergize aquatic farming.

농업과 수산전선에서 앙양을 일으켜야 하겠습니다.우량종자와 다수확농법,능률적인 농기계들을 대대적으로 받아들이고 농사를 과학기술적으로 지어 알곡생산목표를 반드시 점령하며 축산물과 과일,온실남새와 버섯생산을 늘여야 합니다.배무이와 배수리능력을 높이고 과학적인 어로전을 전개하며 양어와 양식을 활성화하여야 하겠습니다.

This year the service personnel and people should join efforts to complete the construction of the Wonsan-Kalma coastal tourist area in the shortest period of time, push ahead with major construction projects including the renovation of Samjiyon County, the construction of the Tanchon Power Station and the second-stage waterway project of South Hwanghae Province, and channel steady efforts into the construction of houses.

올해에 군민이 힘을 합쳐 원산갈마해안관광지구건설을 최단기간내에 완공하고 삼지연군꾸리기와 단천발전소건설,황해남도물길 2단계 공사를 비롯한 중요대상건설을 다그치며 살림집건설에 계속 힘을 넣어야 합니다.

Building on the success we achieved in the forest restoration campaign, we should properly protect and manage the forests that have already been created, improve the technical conditions of roads, conduct river improvement on a regular basis, and protect environment in a scientific and responsible manner.

산림복구전투성과를 더욱 확대하면서 이미 조성된 산림에 대한 보호관리를 잘하는것과 함께 도로의 기술상태를 개선하고 강하천정리를 정상화하며 환경보호사업을 과학적으로,책임적으로 하여야 합니다.

Every sector and every unit of the national economy should enlist their own technical forces and economic potential to the maximum and launch a dynamic struggle to increase production and practise economy, so as to create a greater amount of material wealth.

인민경제 모든 부문과 단위들에서 자체의 기술력량과 경제적잠재력을 총동원하고 증산절약투쟁을 힘있게 벌려 더 많은 물질적재부를 창조하여야 합니다.

A shortcut to developing the self-sufficient economy is to give precedence to science and technology and make innovations in economic planning and guidance.

자립경제발전의 지름길은 과학기술을 앞세우고 경제작전과 지휘를 혁신하는데 있습니다.

The scientific research sector should solve on a preferential basis the scientific and technological problems arising in establishing Juche-oriented production lines of our own style, ensuring domestic production of raw and other materials and equipment, and perfecting the structure of the self-supporting economy. Every sector and every unit of the national economy should make a contribution to achieving production growth by intensifying the dissemination of science and technology and waging a brisk technological innovation drive.

과학연구부문에서는 우리 식의 주체적인 생산공정들을 확립하고 원료와 자재,설비를 국산화하며 자립적경제구조를 완비하는데서 제기되는 과학기술적문제들을 우선적으로 풀어나가야 합니다.인민경제 모든 부문과 단위들에서 과학기술보급사업을 강화하며 기술혁신운동을 활발히 벌려 생산장성에 이바지하여야 하겠습니다.

The Cabinet and other economic guidance organs should work out a realistic operational plan to carry out the national economic plan for this year and push forward the work for its implementation responsibly and persistently. Positive measures should be taken by the state to ensure that the socialist system of responsible business operation proves its worth in factories, enterprises and cooperative organizations.

내각을 비롯한 경제지도기관들은 올해 인민경제계획을 수행하기 위한 작전안을 현실성있게 세우며 그 집행을 위한 사업을 책임적으로 완강하게 내밀어야 합니다.국가적으로 사회주의기업책임관리제가 공장,기업소,협동단체들에서 실지 은을 낼수 있도록 적극적인 대책을 세워야 합니다.

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The December 2017 sanctions on North Korea: business as usual?

Saturday, December 23rd, 2017

By Benjamin Katzeff Silberstein

Many of the steps in the additional sanctions added by the UN Security Council resolution 2379 on December 22nd, 2017, were expected. Targeting oil and petroleum, export incomes, as well as revenues from foreign workers, are all natural steps if the international community wants to pressure North Korea. It’s still rather unclear what the end-goal is, but if sanctions are intended to make things more difficult for the North Korean economy, they can certainly have an impact to that end. These are the main points:

  • Exports of refined petroleum products will be capped at 500,000 barrels per year.
  • Crude oil transfers will be limited to 4 million barrels/year.
  • Within two years, UN member states are to have expelled all North Korean workers and managers.

When analyzing how this will impact North Korea, there are two sides to the story. On the one hand, as with all sanctions against North Korea, China (and to some extent, Russia) would likely not have agreed to them if they had believed that they created a real risk of severe social instability in North Korea that would risk spilling over its own borders. At the same time, it seems like the US intention is to create economic difficulties so severe that the North Korean regime will crack and agree to negotiate the existence of its nuclear deterrent, at least according to the official, outward line. These two objectives appear to be mutually exclusive in the long run.

Moreover, China and Russia appear to have extracted some significant concessions in negotiating the resolution. North Korean workers are to be expelled no later than within two years, which is not an insignificant time frame. Perhaps by then, things will have changed enough for sanctions to be renegotiated. The cap of 4 million barrels is close to what China is commonly estimated to be transferring in terms of crude oil per year to North Korea (3.64 million). So North Korea will hardly be fully starved of oil. Fuel has never been in abundant supply in the country.

Last but not least, smuggling routes are already well-established. Recall Ri Jong-ho’s claims that North Korea buys 300,000 tonnes of fuel products from Russia each year through brokers abroad, largely under the radar. Such transfers are not impossible, but very difficult, to track and stop. Both Russia and China can claim with some truth that they cannot control all sanctions breaches by entities within its borders, particularly enterprises who aren’t all too law-abiding in normal times. Particularly given the poor state of relations between the US and Russia, and the US and China, it is unlikely that either of the two countries will dedicated significant resources to fully track and prevent sanctions breaches, beyond normal procedure. Also, North Korea has been under various forms of sanctions since at least 2006, and even before that, was never an integrated part of established and open world trade. They’ve existed under harsh conditions long enough to learn and adapt their strategies.

On the other hand, North Korea is not immune to sanctions pressure. No country is. Even if smuggling and other ways of getting around sanctions can compensate for some of the losses, transaction costs likely increase. In other words, those who still choose to sell items like fuel to North Korea now have space to demand a higher mark-up for the additional risk. There are also presumably added transaction costs liquefying coal to generate oil.

The government has the resources and the know-how to largely get what they need, but North Korean businesses at the mid- or lower levels will find it much more difficult to keep up with the added costs and effort needed. This is has been true for each sanctions round through this year and last.

Ordinary North Koreans have been impacted by sanctions for long — this did not start with the sanctions that target goods such as oil and fuel. The opportunity cost of what could have been without them was still present. Of course, one can reasonably argue that the fault lies with the regime, for continuing its development of nuclear weapons and missiles, and not with the international community. But that sanctions would somehow not effect North Korean society while hitting against the regime seems implausible.

Lastly, we can note that both exchange rates and rice prices on North Korean markets have decreased over the past few weeks. There may be additional stress present among some spheres of society, but it seems like no major sense of crisis is at hand.

 

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Sanctions, and the weakness of North Korean food security

Wednesday, October 18th, 2017

By Benjamin Katzeff Silberstein

While some Pyongyangites started off the week by checking out plasma-screen TV’s at a consumer goods fair, Daily NK published an ominous story that reminds the reader of the dark 1990s. Rumors are now circulating of a starvation death in Hyesan:

An increasing number of North Koreans are suffering from the effects of food insecurity and malnutrition, according to inside sources who spoke with Daily NK. A rumor is circulating in Ryanggang and North Hamgyong provinces that the body of someone who starved to death has been seen near the train station in Hyesan City.
“More than a handful of people have come forward and said that they saw the body of someone who starved to death near the Hyesan train station. The food situation was relatively good for the past few years, so it’s such a shame that we’ve returned to dire circumstances so suddenly,” a source in Ryanggang Province told Daily NK.
A source from North Hamgyong Province similarly reported that “a rumor is swirling around the market that a starved body was discovered. There are so many people talking about it that it’s being viewed as a fact.”
The source added that the credibility of the rumors is high, saying, “There was a severe drought at the beginning of the year in North and South Hamgyong provinces and Ryanggang Province. The corn and rice harvest did not meet its targets, amounting to approximately half the volume produced last year.”
Full article:
Food insecurity riles North Korea’s poorest provinces
Kim Chung Yeol
Daily NK
2017-10-18

As crude as it may sound, one cannot draw sharp conclusions from one unconfirmed death by starvation in a North Korean city. But the fact that people think conditions bad enough to believe such rumors to be true says something about the instability of food supply in North Korea right now.

For several years, the supply of food in North Korea has looked remarkably stabile compared to the 1990s. A combination of more freedom for the markets to operate, more leeway for farmers in how they operate, produce and sell their goods (and procure inputs such as fertilizer), larger and more consistent imports from China – these are all factors that have led to better food security overall in North Korea. Market prices have sent a clear message on this.

But perhaps “stabile” was the wrong way to describe food supply. “Consistent” may have been a better way of looking at it. A system is hardly stabile when a combination of relatively usual events for the country – bad weather and changing geopolitical conditions – can shake its core.

As usual with these dynamics, it would be wrong to attribute the changes to one single factor. That is, we cannot say that sanctions –> starvation in some automatic fashion. Rather, several trends have coincided and caused the dire situation:

First, North Korea has experienced a very troubling drought early on in the farming season. As Andy Dinville shows at 38North, using satellite data, weather conditions have been particularly bad this year, significantly harming this year’s harvest.

In any normal year since the early 2000s, when market mechanisms seriously became a routinized part of North Korea’s agricultural economic system, it seems that the effects of a drought could have been offset at least in part by increased imports from China, or other sorts of shifts.

Which brings us to a second factor, namely sanctions and the current tensions, and China’s enforcement of economic pressure on North Korea. Not only does this mean that overall trading conditions are difficult, and that Chinese sellers are wary of trusting that they’ll actually receive payments from North Korean buyers. It also means that goods such as fertilizer for farming are more difficult to acquire. Like the Daily NK article notes:

“Last year, North and South Hamgyong and Ryanggang provinces endured a flood of epic proportions and this year there was a drought, so the agricultural situation in both regions is poor. Additionally, because of the sanctions, it has been harder to procure different kinds of fertilizer necessary for farming, so this has exacerbated the damage.” he continued.
Third, the geopolitical instability naturally makes for a nervous market overall. The price of corn, for example, is up by 47 percent compared to last year. It is important to note that this sort of change in market prices has not been observable during the many instances in the past when international aid organizations have warned of food shortages in North Korea. Hoarding is a natural behavior on any market when actors believe a shortage is looming in the near future. It is a stark sign of the shift in China’s behavior from previous rounds of sanctions that North Korean markets now seem to confirm that China is putting real and heavy economic pressure on the country. The loopholes may still be there but they are much more narrow than usual.
As winter approaches, things aren’t likely to get any easier. Fuel shortages will make heating more difficult and expensive than usual for average North Koreans, particularly as the state soaks up oil and fuel from the market, raising prices further. Things may well get much worse before they get any better.
UPDATE 2017-10-24: 
A reader with extensive experience working on North Korean food security emailed a somewhat skeptical note regarding the food production decrease estimates I cite above. The main point is: even if food production goes down, it may not spell disaster as the past few years harvests have been exceptionally good in comparative perspective. I quote an excerpt here with the reader’s permission:
It really doesn’t look like there is much difference between positive and negative trends, particularly if you just look at the end of August. And his [Dinville] data compares the 2017 harvest with the 2016 harvest, which was probably the best harvest in 30 years. So even if 2017 is a bit lower than 2016, it will still be a relatively stable year and much, much better than 2001. There were no major disasters in the country, as well, aside from the drought and the effects of the flooding from last fall in a few counties in the northeast. My takeaway from his [Dinville’s] data is that there were a few fields (the red “strongly negative” portion) that couldn’t be irrigated sufficiently but we shouldn’t extrapolate to the entire country harvest. Kitchen gardens have also expanded in the country and can help to mitigate a poor harvest, at least for some families.
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FAO warns of worst North Korean drought since 2001

Thursday, July 20th, 2017

Benjamin Katzeff Silberstein

FAO sounds the alarm bells yet again this year about drought in North Korea:

20 July 2017, Rome- DPR Korea’scrop production for 2017, including staple rice, maize, potatoes and soybean, has been severely damaged by prolonged dry weather conditions, threatening food security for a large part of its population, according to anew FAO updateprepared in collaboration with the European Commission’s Joint Research Centre.

Rainfall from April to June in key crop producing areas in Democratic People’s Republic of Koreawere well below the long-term average, severely disrupting planting activities and damaging the 2017 main season crops.

“So far, seasonal rainfall in main cereal producing areas have been below the level of 2001, when cereal production dropped to the unprecedented level of only two million tonnes, causing a sharp deterioration in food security conditions of a large part of the population,” said Vincent Martin, FAO Representative in China and DPR Korea.

Food shortages during ongoing lean season

The severe dry spell also affected the 2016/17 early season crops which were harvested in June and include wheat, barley and potatoes. According to FAO’s latest estimates, production of 2017 early season crops has plunged by over 30 percent, from the previous year’s level of 450 000 tonnes to 310 000 tonnes.

Despite the fact that the early season harvest accounts for only 10 percent of the total annual cereal production, these crops are an important source of food during the lean season from May to September.

Concerns over the 2017 main season crops

Although rains in the first half of July provided some relief, they were generally too late to allow normal planting and development of the 2017 main season crops, to be harvested in October-November.

The lack of rain is expected to have a serious impact on main season crops in the major cereal producing areas, including the provinces of South and North Pyongan, South and North Hwanghae and Nampo City, which normally account for close to two-thirds of overall main season cereal production.

With forecasts of reduced production of the 2017 main season crop, the food security situation is expected to further deteriorate during the 2017/18 marketing year and cereal import requirements are likely to increase.

Immediate interventions

“Immediate interventions are needed to support affected farmers and prevent undesirable coping strategies for the most vulnerable, such as reducing daily food intakes,” said Martin. “It is critical now that farmers receive appropriate and timely agricultural assistance, including irrigation equipment and machinery.”

According to the report, it is also essential to immediately start rehabilitating and upgrading irrigation schemes to reduce water losses and increase water availability.

Increased food imports, commercial or through food aid, would be required during the next three months at the peak of the lean season, ensuring adequate food supply for the most vulnerable, including children and elders.

Full article:
DPR Koreas food production hit by the worst drought since 2001
Food and Agriculture Organization of the United Nations
2017-07-20

It is worth noting that many question marks exist on the FAO’s overall methodology. I’ve written about some of these issues before, here and here. Surely, market prices appear to be pointing up in North Korea this summer, but not toward any unprecedented levels. I see no reason to doubt what FAO says about weather conditions, but the consequences for North Korea’s food supply are less clearly outlined, especially since WFP and FAO, for political reasons, often are not able to fully take the market sector into account in their assessments.

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North Koreans suffering under drought

Monday, July 3rd, 2017

Benjamin Katzeff Silberstein

From Daily NK:

Previously we reported that many residents of North Hamgyong Province were more worried about flood than drought due to traumatic memories of the widespread flooding last year. But in other regions, farmers are deeply concerned about the ongoing drought.
People are saying that it will be difficult to farm in most regions due to the lack of water. According to sources in Taehongdan County and Paekam County in Ryanggang Province, the underground water sources that were once used for drinking water have dried up due to an unprecedented and severe drought.
Ryanggang Province is famous for being the location of Mt Paektu. But Taehongdan County and Paekam County are notorious for water supply issues, as a majority of the land is contains large volumes of sand. Due to this environment, underground water sources have diminished quickly this year, and the valley streams are said to be filled with residents collecting water from early dawn.
The regions near Mt Paektu suffer from a lack of water every year, but is this year worse than normal?
Yes, the water shortages are a chronic problem, so residents resort to underground water, using a manual pump. But now the underground water supplies have dried up. Residents are deeply concerned, wondering when they can finally live without having to worry about basic necessities. When one thing improves, like the food security issue, something else goes wrong. People know that farming will be very difficult if the drought continues.
Ryanggang Province is not the only region suffering from drought. According to Daily NKs sources, rice planting has generally started at a later date than last year in most regions. People are said to be digging wells under the scorching summer sun in their desperate search for new sources of water.
It seems that not only farmers, but also ordinary people are suffering from the drought. Can you provide more details?
According to a resident in Taehongdan County, Ryanggang Province, the drought has been severe since early spring this year and the furrows are all covered with dust. The farmers have no specific measures to cope with the situation, as the pumping facility is dilapidated and there are not many places to draw water from.
The 10.18 Collective Farm in Undok is also suffering under the drought. Residents have to walk tens of kilometers to draw water, as the village streams are parched.
Some merchants are purchasing drinking water in large volumes and selling it at a slightly cheaper price. The drinking water is said to be selling like hotcakes in the markets. So the solution to the urgent need for drinking water has come through the markets and private vendors.
That is good to hear. The merchants are adapting quickly to the changing environments.
Yes. Merchants are most aware of the needs of the rest of the population, as they survive off good trading decisions.
This is actually helpful for the residents as they can purchase drinking water at an affordable price. So its a win-win situation.
However, a constant supply of water from the markets is not possible, so some residents are said be installing water pumps from place to place to draw underground water.
Residents in rural areas must find it difficult to constantly purchase water with their limited budgets. How much does drinking water cost?
Mineral water was originally purchased mostly by people traveling by train or merchants going on long-distance business trips using servicha (transportation and delivery services). Also, some of the donju purchased mineral water, thinking that local tap water might be contaminated. However, most residents have been using water from wells, spring water, or underground water drawn by pump and because the underground water all dried up so fast, people have no choice but to purchase mineral water.
The bottled mineral water brands currently available in North Korea include Paektu Spring Water, which is jointly produced by a North Korean company and a foreign company, Ryongak Spring Water, which is produced in Pyongyang, and Sindok Spring Water, produced in Onchon County, South Pyongan Province. Of these three, Sindok Spring Water is said to be the most popular.
Sindok Spring Water is claimed to be high quality and is supplied to Kim Jong Uns family and high-ranking officials. Merchants are selling the water at 500-550 KPW per bottle, which is 100 KPW lower than usual.
Full article:
North Korean residents suffering under severe drought
Unification Media Group/Kang Mi Jin
Daily NK
2017-07-03
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Ten million live in food insecurity in North Korea, UN says. But what does that really mean?

Tuesday, May 16th, 2017

By Benjamin Katzeff Silberstein

A new report published by World Food Program and other UN institutions (Food Insecurity Information Network), detailing food insecurity in the world in 2016 as a whole, says the following about the situation in North Korea:

  • 4.4 million (or 17 percent of the North Korean population as a whole) is in “crisis, emergency and [or?] famine”.
  • 5.6 million (or 22 percent of the population) lives in a “stressed” situation when it comes to food.
  • This brings the entirety of the population living in food insecurity to ten million.

North Korea is the only country in all of East Asia with food insecurity, the report says.

It is unclear where the data comes from. According to the report, it could either have come from government sources in North Korean or from the World Food Program, but the report itself does not specify this.

A few things are worth noting. First and most importantly, particularly at a time when news reports abound about the rising middle classes and the new consumption habits of the wealthy, it is crucial to remember that a significant proportion of the North Korean population still live lives far away from the relative luxury of Pyongyang.

Second, though there is no reason whatsoever to doubt that a significant part of the North Korean population lives in severe hardship, harvests do not appear to be declining. On the contrary. According to the WFP’s 2017 needs assessment for North Korea,

“[w]hile official Government harvest data for 2016 has not yet been released, FAO estimates that rice production in 2016 increased by 23 per cent compared to the previous year when there was drought, but remains below the previous three-year average.”

Third, the World Food Program’s methodology for estimating these figures is rather unclear and problematic. For example, in the above-mentioned assessment of North Korean needs and priorities for 2017, released earlier this year, the WFP classifies all those depending on the Public Distribution System (PDS) as “suffering from food insecurity and undernutrition, as well as a lack of access to basic services.”

Presumably, this is derived from the fact that PDS distribution (of grains and staple foods, which is basically all it distributes) fluctuates through the year and is fairly unpredictable. But with the growing prevalence of the markets, it is unclear whether even those who the WFP claim “depend” on the PDS, really get the main portion of their food from the system. Over the past few years, public distribution of food has become an increasingly marginal (though certainly not unimportant) part of the food supply, and assuming that 18 million North Koreans experience food insecurity simply because they are beneficiaries of the public distribution system seems questionable at best. Obviously, the only way to understand food security overall would be to look at sources of food overall, not just one channel of supply.

Fourth, one overall problem with data on food security in North Korea remains the involvement of the North Korean government in the data collection. That is not to say that the North Korean government pushes the food production estimates upward to make itself look more successful. On the contrary, at times it probably exaggerates food needs in order to receive more outside assistance. Rather, the political nature of food, markets and the economic system makes it difficult to get trustworthy assessments of the food situation in the country. Only in one paragraph in its short version of North Korea’s needs estimates for 2017 does the World Food Program even allude to the markets:

In addition to the PDS, households are increasingly reliant on markets for their foods, except cereals. Farmers’ markets are distribution channels for a wide range of foods and basic necessities. In addition to swaps and bartering, markets involve large numbers of small transactions, often led by women.
Markets enable households to sell produce from their kitchen gardens; vegetables, maize and potatoes, as well as some small livestock.

Given the extent to which marketization has prevailed in North Korean society for over close to three decades, language like this seems to conflict with an overwhelming body of information about the centrality of the markets in the system today.

And, of course, there is the elephant in the room: North Korea’s economic system itself. As Amartya Sen famously pointed out, famine and food insecurity does not first and foremost stem from a lack of food overall, but from skewed entitlements. In other words, resources exist, but the problem is who gets them. In North Korea, the regime continues to refuse overarching and fundamental reforms of the economic system. As Fyodor Tertitskiy convincingly argued in a recent piece in NK News, the systemic changes in the North Korean economy of the past few years is most likely the work of bureaucrats within the state hierarchy, rather than a push by Kim Jong-un. In short, there are a lot of things the regime could change about the economy, to improve access to food and diminish food insecurity, but which it does not do.

This makes language like this, also from the WFP’s 2017 needs assessment, so problematic (my emphasis):

There are many complex, intertwined reasons for the high rates of undernutrition in DPRK, including challenges in producing sufficient food. The majority of the country is mountainous, only 17 per cent of land is good for cultivation.
Agriculture also remains dependent on traditional farming methods. Food production is hampered by a lack of agricultural inputs, such as quality seeds, proper fertilizer and equipment. In addition, changing weather patterns have left DPRK vulnerable to droughts and floods, which have affected agricultural production.

Mountains and bad weather are not factors unique to North Korea. Geography is not destiny, and there is no shortage in the world of countries that have overcome difficulties in their natural environment through good policy. One has to understand the difficult spot that the WFP and other UN institutions work in, given North Korea’s politically sensitive and tense context. But one can only hope that the WFP is clearer about pointing out systemic deficiencies in the North Korean economy when they talk to officials behind closed doors, than they are in public statements.

All this said, North Korea is an extremely difficult environment to navigate for international aid organizations. The women and men on the ground certainly do their best to accomplish good things, and make accurate measurements in a challenging environment. But it is important to keep these and other methodological issues in mind before drawing any major conclusions about North Korea’s food situation.

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North Korean merchants resisting price controls on markets

Tuesday, March 21st, 2017

By Benjamin Katzeff Silberstein

Reports Daily NK:

Food prices in the past closely mirrored the ups and downs of rice prices in North Korea. For example, if rice prices climbed by 1,000 KPW per kg, then corn prices could also be expected to rise by approximately 500 KPW. But that trend is beginning to change.
In addition, North Korean rice prices used to exhibit sensitivity to currency exchange rates, but rice prices have recently been falling and climbing independently of the exchange rates.
To calm volatility, the authorities have entered the markets and attempted to control prices, but merchants have widely rejected these measures. Merchants who sell similar products have been collaborating with one another to set prices or decide when to withhold products from sale.
Merchants know that the authorities attempts to crackdown on the marketplace usually fizzle out over time, said a separate source in Ryanggang Province. The vendors will pretend to agree and listen to the authorities, but then they will secretly raise the prices.
As rumors spread that large shipments of pork were being smuggled in, shrewd merchants refrained from putting pork up for sale because they were expecting the price to rise. They then sold large quantities at a higher price, before the prices gradually began to fall again, she continued.
One expert believes that this development signals how prices have moved out of the domain of the authorities and under the influence of the black market.
The price volatility we are currently seeing in North Koreas markets is a common element for underdeveloped countries, said Professor Lim Eul Chul, from the Institute for Far Eastern Studies (IFES) at Kyungnam University. He went on to explain that pricing decisions by individual actors involved in market activity are becoming increasingly relevant, but the authorities are having trouble keeping up with the information.
In the past, market agents carefully watched the authorities reactions when setting prices, but the markets have developed and now it is the authorities who are following behind. Big merchants have the power and sway to move the market and control prices. We can expect this trend to continue, he concluded.
Full article:
Merchants resist price controls
Kang Mi Jin
Daily NK
2017-03-20
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North Korean rice prices have dropped drastically one year after the sanctions. Why?

Wednesday, February 8th, 2017

By: Benjamin Katzeff Silberstein

Prices for rice have fallen in North Korea. Daily NK, which tracks prices of rice and foreign currency in three North Korean cities, reported in the beginning of this week that rice prices have fallen thanks to continued development of the market economy and a steady flow of goods to and from China. This has happened despite expectations that the sanctions that the UN passed one year ago would cause inflation.

In theory, the sanctions were supposed to curb trade with China because they targeted North Korea’s crucial minerals trade. In practice, a steady stream of news from the border suggests that trade has continued, albeit with periodic squeezes, following a familiar pattern of China’s sanctions implementation waxing and waning.

This makes a lot of sense. A better functioning and more efficient market should logically lead to lower prices, as should increased trade with China, given the increase in supply. But neither of these two factors explains the timing. There are several other elements to take into consideration when analyzing price changes in North Korea. I am not making any certain claims here about the relatively drastic shift in prices, but rather, pointing to a few factors that may have contributed.

First, one must ask: how big is the drop? The short answer is: pretty big, but not unprecedented. The following graph shows the last and first price observations in the Daily NK market prices database for every year since 2010–2011. (I’ve excluded 2009–2010 because of the distortions that the 2009 currency reform creates in the data.) It shows that a similar price drop happened between 2011 and 2012 as well.

Graph 1: rice prices in North Korea, last and first year observations. Graph by NKeconwatch.com. Data from Daily NK.

This latest price point, however, is not a historic low-point. We’ll see if prices continue to drop over the weeks, but as of now, there are fairly near time points when prices have been lower, such as April 2014 (see graph further down).

Prices are seasonal to a degree. Though the market system and the public distribution system (PDS) obviously function under very different mechanisms, the following graph from the World Food Program’s 2013 food and crop assessment (the latest exhaustive one they published, to my knowledge) underscores the point that supply varies depending as the harvest draws farther and closer, and suggests that overall supply tends to be particularly good in December and January in other years as well:

Figure copied from World Food Program Food and Crop Assessment in the DPRK, November 2013, showing seasonal variations in government grain distribution.

Overall, the story under Kim Jong-un’s tenure seems to be one of price stability. Since around the spring of 2014, prices have moved in a fairly delineated fashion (as visible in the right half of this graph):

Rice prices, average of three cities, 2012–2017. Data from Daily NK, graph by NKEconwatch.com.

Second, though it would be intuitively easy to conclude that the drop in prices was caused by better functioning market mechanisms and agricultural management changes, this doesn’t seem to be the whole story. Again, such changes are crucial and may well have played a large role in the greater price stability of the past few years. But they would not explain this sudden shift.

Instead, the story seems to partially be the opposite, one of government action. A few days ago, Voice of America reported that PDS distributions in January of this year have, according to a World Food Program official, gone up by around ten percent as compared to the same period last year. Both in September and November, the North Korean government imported significantly larger quantities of rice than usual. These imports presumably go out through state channels rather than the private markets.

So while it’s impossible to isolate different effects from one another, it looks like the state can still have a significant impact on the food economy, even with the strong and continuously evolving market sector. This impact seems particularly likely this time around, given the sudden drop in prices. Only time will tell whether drop continues, or if prices continue to bounce within the limits of the past few years.

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