North Korean Economy Watch

UNFAO
11/13/1997

Despite an improved harvest in North Korea, the country will enter 1999 with a large food deficit and will need to import 1.35 million tonnes of food grain, including 1.05 million tonnes as food assistance to meet the minimum nutritional requirements of the population, according to a joint report by the UN Food and Agriculture Organization (FAO) and the UN World Food Programme (WFP).

The report, based on the findings of a crop and food supply assessment mission that toured the country extensively last month, forecasts North Korea’s cereal production for 1998/99 at 3.5 million tonnes, some 30 percent higher than last year’s severely reduced crop.

But this harvest is only enough to cover minimum consumption needs for eight months. Apart from foreign exchange constraints that limit commercial imports, the general economic decline in the country and natural disasters have seriously compromised national food security.

“The food situation in DPR Korea (North Korea) remains precarious and the country urgently needs to address the underlying problems in the economy and agriculture if it is to avert serious problems in the future,” said the assessment team leader Mr. Abdur Rashid.

The report recommends that out of the 1.05 million tonnes of food aid needed, some 480,000 tonnes be targeted mostly to children, hospital patients and pregnant and nursing women. The remaining cereal shortfall of 574,000 tonnes will be needed to help the general population meet its minimum needs.

The report calls for immediate attention to be “focused on improving agricultural input supplies, mainly fertilisers, spare parts and fuel” to “enable the country to produce enough food to meet its minimum needs.”

“It is imperative that the international assistance to agriculture be increased substantially from its current low levels,” the report said, because “future food security in DPR Korea (North Korea) will crucially depend on solutions that address the major economic difficulties. In the absence of these, even without natural hazards, the food supply situation will remain highly precarious as the productivity in agriculture falls and the capacity of the country to finance commercial food imports dwindles and barter trade becomes a progressively less viable option.”

“Despite favourable weather this year, food production has not recovered sufficiently enough to avert serious food shortages,” said WFP’s Senior Program Coordinator for North Korea, Mr. Saeed Malik, adding, “The food crisis has been compounded by a complete run-down of the country’s economy.”

The natural disasters that struck North Korea from 1995 to 1997, including two years of flooding followed by serious drought and a typhoon, aggravated the underlying structural problems of the economy. The situation worsened further with the loss of favourable economic ties with the former USSR and other centrally planned economies in eastern Europe which had provided North Korea with large amounts of aid and trade benefits.

Today, the agriculture sector faces a lack of spare parts for broken machinery, shortages of fuel, irrigation difficulties and a shortage of pesticides. But, the shortage of fertiliser is the most serious problem for domestic food production, according to the report. North Korea’s three fertiliser factories have a total capacity of over 400,000 tonnes of nitrogen nutrient which could be enough for self-sufficiency, but the factories are obsolete, poorly maintained and face shortages of spate parts and raw materials, mainly fuel, causing fertiliser availability for 1998 to dwindle.

“The capacity of North Korea to provide adequate food for its population is constrained by the shortage of agricultural inputs such a fuel and fertiliser needed to produce food domestically and the reduced capacity of the economy to supplement domestic food production through commercial imports,” said the report, adding: “Food security in the country critically depends on general economic performance and the efforts to increase domestic food production.”

Other recommendations in the report include:

· Rehabilitation and development of the irrigation system and improved water management;

· Crop diversification to enhance soil productivity and reduce risk of crop losses in any one year due to adverse weather conditions;

· Research into effective crop rotation schemes including legumes to promote soil fertility and productivity; and,

· Research on seed improvement, and early and short-maturing and less chemical fertiliser dependent crop varieties.

· In the context of these recommendations, the UN Development Programme-led Round Table in support of Agricultural Recovery and Environmental Protection is an important initiative towards a strategic approach.

UNFAO
11/9/1997

The nutritional situation in North Korea remains fragile in spite of the country’s efforts to redress chronic food problems, United Nations food agencies said today in their latest comprehensive food assessment report.

“Given the scale of the problem and its root causes, future food supply prospects are almost entirely contingent on international food and rehabilitation assistance, economic growth and the ability of the country to integrate itself into the global economy,” the Food and Agriculture Organization (FAO) and World Food Programme (WFP) said in a report on their recent joint mission to North Korea.

“Failing these requisites, food availability and health and nutritional standards will continue to fall markedly,”

Living standards in North Korea have significantly declined in the last four years as the availability of food per person has shrunk, while serious health problems have increased because resources, drugs and essential supplies are unavailable. A vicious circle of poor nutrition compounding poor health and vice versa has become deeply entrenched, the report said.

“Widespread starvation has only been averted by concerted national efforts and the unprecedented volume of humanitarian food assistance provided by the international community,” according to the report.

The mission, which visited North Korea 9-19 October, said the food supply situation “will remain precarious over the next 12 months despite some improvement in rice production this year, due principally to increased fertiliser use, adequate irrigation supplies and the absence of serious pest and disease attacks.”

However, the report cautioned, the gains in rice production were more than offset by the reduction in maize output as the area cultivated fell sharply.

Based on population figures provided by North Korea’s government, grain demand for food and other uses for 1999/2000 is said to be 4.76 million tonnes. This leaves a deficit of about 1.29 million tonnes, of which the government is expected to import 300,000 tonnes commercially. A further 370,000 tonnes is covered by food aid imports in the pipeline, leaving 623,000 tonnes of grain that will need to come through assistance programmes. The food deficit has not significantly changed since the last year’s FAO/WFP crop and food supply assessment mission to North Korea.

According to the FAO/WFP report, there are signs that economic sanctions on North Korea by leading industrialized countries may be further relaxed, which could lead to recovery in the economy and rehabilitation in agriculture. “This inevitably will have a significant and positive impact on sustainable food security.”

UNFAO
9/12/1997

The United Nations food agencies today expressed “very serious alarm” over food shortages in the Democratic People’s Republic of Korea (North Korea) where drought and a destructive typhoon have aggravated the effects of two years of floods.

“These catastrophic events will undoubtedly have serious and long reaching repercussions in the country’s already grave food supply situation,” the Food and Agriculture Organization (FAO) and World Food Programme (WFP) warned in a report on a mission to North Korea.

North Korea will now have to depend to an even greater extent on international assistance for food, agricultural rehabilitation and vital inputs of seed and fertilizers.

“Without these interventions the human consequences are likely to be dire,” the report said.

The mission, which visited North Korea 16-26 August, said drought has devastated crops throughout the country. Typhoon Winnie caused extensive damage last month to rice in coastal areas in the west where tidal waves destroyed dikes and seawater invaded cropland.

“Guarded optimism expressed earlier for some recovery in food production this year is now replaced by very serious alarm at food security prospects for the coming months and year ahead,” the report said.

In preliminary estimates, pending the visit of another FAO/WFP mission to North Korea in connection with next month’s harvest, the report said the country could lose 1.25 million tons of maize even if there is adequate rainfall this month. With rain, the rice crop could be down by 342,000 tons, without rain by 630,000 tons.

“Imports from commercial channels are likely to become increasingly strained due to growing and chronic economic difficulties and the lack of foreign exchange,” the mission said.

“As the general health of the population has now already been highly weakened by the shortage of adequate food in recent years, especially amongst vulnerable groups, the anticipated shortfall this year is likely to have far-reaching implications that go beyond the devastation of 1995 and 1996.”

WFP, which has been providing emergency food aid to North Korea since 1995, has appealed for donations of US$144.1 million to provide the country with 333,200 tons of food during the period between April 1997 and March 1998. Contributions as of 1 September totalled 322,500 tons or 97 percent of the appeal.

The food is being distributed to 2.6 million children aged 6 or younger, some 250,000 farmers and workers and their 850,000 dependants taking part in flood rehabilitation projects and up to one million hospital patients.

The UN agencies say the ability of North Korea to provide adequate food to its population continues to be hampered by two basic facts: the resources it has available to produce food domestically and the ability of the economy to provide inputs for agriculture and supplement the food supply with imports when there are production shortfalls.

According to the FAO/WFP report, future food security in the country depends as much on general economic performance as on efforts to increase output in agriculture.