Farmers Receive First Cash Since 2004

Daily NK
Jung Kwon Ho

The North Korean authorities apparently started paying farmers as of the 16th, starting with Migok Collective Farm in Sariwon, North Hwanghae Province.

In North Korea, the amount of work each farmer does is calculated and expressed in a numerical value, which is called “labor grade (노력공수).” After the harvest has been gathered, the state’s requirement is handed over, and then farmers are distributed food according to their labor grade, while surplus cash is also supposed to be distributed dependent upon a farmer’s labor grade and the profits of the farm as a whole.

Around the time of the July 1st Economic Management Reform Measure in 2002, cash was distributed in this way, but between 2005 and 2008 there was nothing.

For office and factory workers, payment began on the 17th at approximately the level of the July 1st Economic Management Reform Measure.

A source from South Pyongan Province reported to The Daily NK on the 23rd, “From the 16th, they started delivering cash to those farms which fulfilled the state’s grain production plan. For other farms, which could not accomplish the state’s plan, the authorities gave a subsidy.”

Since some collective farms have received an unusual amount of cash, it has become the talk of the town. In the case of the Migok Collective Farm in Sariwon, an average of 150,000 won per farmer was paid in cash.

Kim Jong Il conducted an onsite inspection of Migok Collective Farm in October, and it is considered a model case because it exceeded its state production target. Hence the unusually generous payments.

Farmers working for the Ryongyeon Collective Farm, which also achieved the state’s plan, got around 100,000 won each.

Despite this apparent state generosity, the source pointed out, “This cash distribution covered only those farms which accomplished state production targets. Since this year’s farming went sour, there are less than ten farms that achieved their targets across the whole country.”

Collective farms which failed to achieve the state’s goals got just 5,000 won per worker.

“This cash distribution seems to be just a one-off measure to straighten out the confusion after the redenomination and to soothe farmers,” the source also asserted.

Regardless, the cash will slow the entry of food into the markets, the source pointed out, saying, “This cash distribution and subsidies will make food circulation difficult in the short term.”

“When farmers do not hold any cash in their hands, their grain flows into the markets. For the time being farmers will not sell rice and food in the market because they have enough pocket money. It causes rising food prices.”

Additionally, the North Korean authorities still have not announced state prices since the redenomination, and they continue to heavily regulate the market. Therefore, food traders are watching the market situation without selling any food.

The logical market principle, that when harvested grain circulates in the market food prices go down, may therefore not hold true this year, and vulnerable classes’ will become more food insecure as a result.

However, the authorities are trying to assure farmers that there will be continuous measures to give them further benefits.

According to the source, “more benefits for farmers” implies a revised grain procurement policy.

He explained, “Until now, the authorities purchased rice for 20 won per kilogram from the farm and sold it for 45 won to the people. However, from now on, the procurement price will be 44 won and supply price to workers and the people will be 18-20 won.“


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