Archive for the ‘Farmers markets’ Category

New market construction and renovation in North Korea

Thursday, May 19th, 2016

New-nampho-Market-2016-5-19

Pictured Above (Google Earth, 2016-2-2): Construction of what I believe to be a new market in Nampho.

I have identified a few other smaller examples in this Radio Free Asia article.

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New figures on markets in North Korea

Sunday, December 27th, 2015

By Benjamin Katzeff Silberstein

The last few months have seen quite the trickle of quantitative estimates on North Korea’s markets. A while back, South Korean intelligence said North Korea has 380 markets in total. Curtis Melvin counts them to 406. And then, a few days ago, Professor Lim Eul-chul of Kyungnam University put them at 750 (including street vendors).

It is unclear whether this is another intelligence branch or institution speaking, but what Yonhap terms “South Korea’s intelligence authorities” today claims that there are 306 markets. They also estimate that 1.8 million people use them every day, although those numbers are probably guesstimates more than anything else. Even though survey studies can say a lot about how often people use markets on average, it would seem almost impossible to weight these properly by region given the variation.

The report also includes a count of markets in each province:

By region, South Pyongan Province is home to the largest markets with 37, followed by South Hamgyong Province with 36 and North Pyongan Province with 34. North Korea’s capital of Pyongyang has 23 markets, the authorities said, without elaborating on how they obtained the information.

It is difficult to know what is meant by “markets” here: in other words, whether street markets are included or only formal ones. In any case, it isn’t particularly surprising that South Pyongan Province comes out as number one: the province has a major advantage for market trade in that it is close to Pyongyang. Traders that don’t have entry permits to Pyongyang can come and sell their goods to Pyongyang citizens who only live a relatively short bus ride away, or to other traders that will ship the goods for sale there.

Read the full article here:
S. Korea says up to 1.8 mln N. Koreans use markets per day 
Yonhap News
2015-12-27

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750 markets in North Korea, one scholar says

Monday, December 21st, 2015

By Benjamin Katzeff Silberstein

UPI reports that Lim Eul-chul of Kyungnam University puts the number of North Korean “gray” markets at 750. This number includes “alley vendors”, according to Lim, presumably another term for street markets:

There are now more than 750 “gray markets” in North Korea and one million people now make up the country’s consumer elite, a South Korean analyst said Tuesday.

Lim Eul-chul of the Institute for Far Eastern Studies at Kyungnam University said at a seminar for South Korean lawmakers grassroots enterprises in North Korea have increased, and businesses are diversifying.

“North Korean authorities also are involved in the markets,” Lim said.

On average, a North Korean city, county or region has an average of two marketplaces, bringing the national total to 500. If alley vendors are included in the tally, the total is 750, Lim said.

In larger cities like Chongjin, near the China border, there are about 12,000 vendor stalls and one city in South Pyongan Province is home to a marketplace that is more than 1 mile across, the analyst said.

The North Korean regime is an active participant in the unofficial marketplaces that began developing after the collapse of the state’s distribution system. Authorities enjoy a monopoly over the mobile phone market and related services, Lim said.

Other sought-after products in North Korean marketplaces include South Korea-made products that are smuggled into the country, as well as pizza and burgers.

It is unclear exactly how these numbers have been compiled. Lim appears to be using a very wide definition for what to count as a market. South Korean intelligence has previously put the number of markets at 380, while Curtis Melvin counts them to 406.

Read the full article:
More than 700 North Korea ‘gray’ marketplaces have emerged, analyst says
Elizabeth Shim
UPI
12-21-2015

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The limits of agriculture reform in North Korea

Friday, December 18th, 2015

By Benjamin Katzeff Silberstein 

Agricultural reforms in North Korea became a hot topic of discussion almost right away when Kim Jong-un took power in 2011. Only a number of months into his tenure, news began to come out of the country about attempts at agricultural reforms. It is unclear when (or even if) the June 28th Measures were finally extended to the whole country.

At the very least, three years in, it seems beyond reasonable doubt that North Korean agriculture has undergone major changes. These have been aimed at boosting production by creating better incentives for farmers to produce and sell more of their output to the state rather than diverting it to the market. The most important aspects of these reforms are the decreased size of work teams and new rules that let farmers keep 30 percent of their production plus any surplus above production targets, while the state takes the remaining 70.

These changes have been met with optimism among some. However, no one really knows exactly what impact these reforms have had. North Korean agriculture may be faring better than it used to – although this is also doubtful – but even so, it is too simplistic to assume that government reforms in agricultural management are doing all the work. As long as North Korea’s agriculture continues to be centrally planned by the state, there will be limits to how much better it can get no matter what reforms the state implements.

To see why, consider some of the news that have been coming out of North Korea in the past few months, as reported by Daily NK. In late November, the online daily reported that in despite by multilateral aid organizations, North Korea had seen relatively good harvests this year. However, the increased harvests, according to people inside the country, were not caused by changes in the agricultural management system of state-operated collective farms.

Rather, the North Koreans interviewed for the story claimed that private plot farmers had been better able to protect their crops from adverse weather impacts by using water pumps and other equipment. Even though trends like these alone probably have a limited impact, this shows that many circumstances other than state management matter.

A few weeks later, Daily NK published another interview carrying a similar message. According to sources inside the country, harvests from collective farms have declined, while private plot production has gone up (author’s emphasis added):

The amount of food harvested this year from the collective farms has “once again fallen short of expectations,” he said, adding that the farmers who work on them have criticized the orders coming down from the authorities, saying that “if we do things the way they want us to, it’s not going to work.”

Although the regime has forced people to mobilize, the source asserted that farm yields are not increasing. So, then, “the best thing to do would be to further divide the land up among individuals,” he posited.

Our source wondered if individual farms were not more successful because each person tending them personally grew and watered their plants. Currently, farmers must follow directives regarding the amount of water they can use on collective farms. He warned that if the system is not completely overhauled, crop yields will fail to improve.

In other words: as is so often the case, management orders from above often do not align with the reality on the ground.

One should be careful not to draw too many general conclusions based on individual interviews, but this is a well known general problem in all planned economies. Even with the best intentions, the state can never be fully informed about conditions and resources on the ground in an entire society.

This is one of the many reasons why economic central planning falters. We have seen this, too, with Kim Jong-un’s forestry policies. The state gives orders that have unintended consequences on the ground, because information is lacking. No central planning team can be fully informed about the reality prevailing throughout the system. The information problem becomes particularly dire in authoritarian dictatorships like North Korea, where people at the lower end of hierarchies often have strong incentives not to speak up about implementation problems when orders come from the top.

Ultimately, no matter what management reforms the North Korean regime implements, the country’s economic system remains the basic stumbling block. As long as central planning continues to be the ambition of economic and agricultural policies, there will be a limit to the success that agricultural policies can reach. We may expect to see agricultural reforms continuing, but as long as the system remains, they can hardly be revolutionary.

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A 2014 visit to Rajin’s old marketplace

Wednesday, December 2nd, 2015

National Unification Broadcasting (국민통일방송) published this video of the old Rajin Marketplace (filmed in Spring of 2014).

Since filming, the North Koreans have opened a new marketplace to replace this one. Here is a satellite image I published with RFA showing the old market and the new:

RFA-Rajin-Market-2015

The old marketplace is inside the yellow box on the left. The new market is inside the yellow box on the right.

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A particularly good year for North Korean harvests? Not thanks to the state, says one citizen

Friday, November 27th, 2015

By Benjamin Katzeff Silberstein 

The flurry of divergent messages on North Korea’s food situation continues. While multilateral agencies have warned that this year’s food deficit might be particularly bad, news from inside North Korea tell a different story. The Daily NK reports that citizens speak of a particularly good harvest this year, despite the drought:

On the 24th, a Daily NK reporter spoke with a source in Yanggang Province, who informed us that although the Rodong Sinmun has been urging citizens and the nation on a daily basis to work hard to restore the damage that resulted from the tempestuous weather earlier in the year, so far there are no reports of lower-than-average rice harvest numbers.

An additional source in North Hamgyong Province reported the same trend in his region.

Small plot farmers have been particularly attentive to ensuring that their crops received adequate water supplies, with many using hand or motorized water pumps and water turbines for irrigation. “Some people are even saying that as a result of the careful attention paid by these farmers to protect their crops from the weather, this year’s rice harvest is looking better than average,” he said.

But it isn’t economic reforms by the state that is causing the bumper harvest, the article says. It’s hardly a shocker that people don’t trust the North Korean government too much:

However, the number of people working hard to ensure the success of the rice harvests on collective farms is dropping. This is in large part due to the fact that despite reassurances from the state that farmers will receive sizable allocations of the harvest for their own use, for the past several years this has not been the case.

After “repeated failures by the authorities to fulfill stated promises,” he asserted, farmers have concluded that it makes no difference to them personally whether the collective farms do well or not.

Read the full article:
Despite Mother Nature, a bumper year for rice harvest
Lee Sang Yong
DailyNK
11-26-2015

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North Korean authorities using market prices for policy

Monday, November 16th, 2015

According to the Daily NK:

The North Korean authorities officially determine product prices in North Korea. However, according to inside sources, these prices are being ignored more and more in favor of prices determined by market forces. Instead of official price designations, the authorities have posted ‘price ceilings,’ but they are not strictly enforcing them.

In a telephone conversation with the Daily NK on November 13th, a source from North Hamgyong Province said, “Official prices have almost completely disappeared from the markets. Reflecting this trend, even the market management offices located in each official marketplace are listing ‘price ceilings’ instead of official prices.”

Daily NK spoke with a source in South Hamgyong Province who confirmed this to be the case there as well.

“Furthermore, the price ceilings are being determined by the market rates, so the meaning of these regulations is fading. For example, if the going rate for rice at any given time is 5,000 KPW [0.58 USD] per kilogram, than the price ceiling would be set at something like 4,500- 5,000 KPW [0.52-0.58 USD],” she said.

“These ceiling prices are indeed posted, but they are not enforced. Ministry of People’s Safety [which act as the North’s police forces] officers are not able to command merchants to lower their prices. The atmosphere is such that if they even tried, they would likely be insulted and cursed at by the vendors.”

She added, “At the market, it has been quite some time since people realized that the official prices are meaningless. If a buyer asked a merchant for the official price of a given product, that merchant would likely to scold the buyer for not having proper control of his mental faculties.”

In a true indication that the national prices are being disregarded on a wide-scale level, even the authorities have shown signs that they are interested in understanding how market rates work.

For example, from Provincial People’s Committees, cabinet ministers are being kept abreast of the local market rate for product prices on a daily basis. “They are trying to understand the exact market prices for given quantities of goods like electronics and foodstuffs,” the source explained.

When asked to describe how ordinary North Korean folks were reacting to this news, she said, “People are saying things like, ‘The authorities explain that they want to understand rice prices so they can think of measures to improve the lives of the people, but that just makes us laugh. The best thing they can do to help is to stay out of the way.’”

Read the full story here:
Authorities tacitly recognize market-determined prices
Daily NK
Lee Sang Yong
2015-11-16

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The (Market) Forces of History in North Korea

Friday, October 30th, 2015

By Benjamin Katzeff Silberstein

The market is a common topic for debate in history. How did it impact the rise of the anti-slavery movement in the US and the UK? What impact did economic conditions have in the French Revolution? These questions are, and should be, asked in the current debate about North Korea’s socioeconomic development as well.

But despite the hope of many, the market might not simply be a story of growing individualism and disconnect from the power of the state. While such a trend may well be at work, it could also be the other way around.

This was recently illuminated through an interesting story by Reuters. In a visit to Pyongyang, they took a look at how markets and everyday business transaction function in North Korea at the moment. As they note, it is telling that a reporter from an international news agency can make transactions in the open, with a government minder by his side, at the black market rate. Business that previously had to be done in the shadows now happens in the open:

Shoppers openly slapped down large stacks of U.S. dollars at the cashier’s counter. They received change in dollars, Chinese yuan or North Korean won – at the black market rate. The same was true elsewhere in the capital: taxi drivers offered change for fares at black market rates, as did other shops and street stalls that Reuters visited.

The most obvious conclusion is that the state is adapting itself to the bottom-up development of the market. Indeed, this is the way the story is often told. In this narrative, the government is only reacting to developments and has long lost the economic policy initiative.

But one could also see a government that is confident enough to relax the rules. It just isn’t a certain fact that the state and the market are two opposing entities.

First, connections to the state still seem to be good for those wanting to trade on the market. For example, according to the surveys conducted by Stephan Haggard and Marcus Noland that laid the foundation for Witness to Transformation (2011)party membership is still considered one of the best ways to get ahead in North Korea (or at least it was at the time when the surveys were conducted). A somewhat similar trend can be discerned in survey results presented by Byung-Yeon Kim of Seoul National University at a conference at Johns Hopkins SAIS in late September this year. Kim’s results also indicate that there is a strong positive correlation between party membership and participation in both the formal and informal economy.

Second, the government is making money off of the market. DailyNK recently reported that the fees charged by state authorities for market stalls was raised. They also noted that regulations of the markets seemed to have gotten more detailed over the years. As noted in this report published by the U.S.-Korea Institute at SAIS, the space that the government allocates to markets has consistently increased in the past few years. Not only have official markets grown, many of them have also been renovated and given better building structures.

All in all, this paints a picture of a government that controls markets while allowing them more space to function. It is not clear that formerly black market activity happening in the open means that the market is gaining ground at the expense of the state. They may well be moving together. That is good news for those hoping for stability, but bad news for those banking on a market-induced revolution. Despite the hope of many that the market will cause the demise of the regime, the role of the market force in North Korea’s history is far from clear.

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Stall fees raised for market vendors

Wednesday, October 7th, 2015

According to the Daily NK:

Daily NK has learned that the fees vendors pay for the right to sell goods varies depending on their goods and is now applicable to stall and street merchants alike. Home appliances and industrial items carry the most expensive stall fee, according to inside sources. This is because these products tend to be large, they sell for a high price, and they have good profit margins.

In a telephone conversation with the Daily NK on the 6th, a source in Yanggang Province said, “The stall fees for market traders are either 1500 KPW [0.18 USD], 1000 KPW [0.12 USD], or 500 KPW [0.06 USD] according to the size and type of product. The fees for sellers on the street are based solely on the type of product, since size is less of a factor for those outside the market.”

Daily NK crosschecked this news with an additional source in the same province and a separate source in South Pyongan Province.

She explained that the small stalls are approximately 1.5 meters wide and are mainly used by food and fish vendors. Medium-sized booths [1000 KPW] are good for sellers of rice, cigarettes, and other household goods while the largest booths are 2.5 meters wide and home to the appliance and industrial goods sellers; these set a given merchant back 1500 KPW.

“As the number of stalls in the marketplace has increased, so have the profits for the authorities, who collect on the fees. In the past, the stall fees were uniform for all sellers, but now the regime has found a way to make more money by customizing the pricing model according to the stall size and the product’s profit margin.”

“Just a few years ago, there was very little regulation of the market. In this lax environment, we saw large increases in the number of market vendors and street sellers. Sellers could move about freely between areas and markets to try to get the best price. Now things are much stricter. To sell X, you first have to pay the fee to sell X.”

“Additionally, both market sellers and street merchants have to pay a fee now. In the past, the fee was exclusively for sellers in the marketplace, but now everyone has to fork over the cash in order to get a badge or label authorizing them to sell that day. Inside the marketplace, the market managers make the rounds at least once a day to make sure everyone is abiding the rules,” she said.

“Now they also make rounds outside of the market at least twice a day to make sure all those merchants are paying for the right to sell. The fees for street merchants are 500 KPW for vegetables and 1000 KPW for light goods. The market managers aggressively police the area to ensure that everyone has the appropriate credentials.”

According to the source, the market traders are only checked once a day because it is easier to track them down and verify that they’ve paid the stall fees. Outside traders go all over the place to sell their goods, which is why the market managers go out twice a day to check on them.

Read the full story here:
Stall fees raised for market vendors
Daily NK
Kang Mi Jin
2015-10-7

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Growth and Geography of Markets in North Korea

Tuesday, October 6th, 2015

By Benjamin Katzeff Silberstein

Some shameless self-promotion: the U.S.-Korea Institute at Johns Hopkins SAIS released a report yesterday where I (with the help of Curtis and others) study how North Korea’s formalized markets have grown over time, and how they are distributed geographically using satellite imagery from Google Earth. The report is available here. These are the main findings:

  • With a few exceptions, formalized markets have grown in North Korea over the past few years. In some cities, they have more than doubled, while other cities have seen only nominal or no changes. Only Pyongsong, the capital of South Pyong’an Province, has seen a significant decline in aggregate market space.
  • There exists only a weak correlation between population size and aggregate market space. The correlation between aggregate market space per capita and proximity to Pyongyang, a large driver for demand in the North Korean economy, is also relatively weak. 

The largest aggregate market space per capita can be found in cities in the southwestern part of the country. This suggests that trade on formal markets may be driven by other factors than those commonly assumed, such as sea route trade and agriculture.

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