Archive for the ‘Agriculture’ Category

The Way to Survive for Farmers

Saturday, June 21st, 2008

Daily NK
Jung Kwon Ho
6/21/2008

The price of rice in the jangmadang has been on the decline since June. The rice price which had risen to 3,000 won at one point is now at 2,400 won per unit (1kg in North Korea), which was the standard in the beginning of April. With the upcoming potato harvest season and spreading the news that U.S.’ food aid will come, the forecast has also been proposed that the food crisis will be mitigated from a climax in mid-June. However, even though it is not at a life and death situation, the hunger of citizens still continues. The Daily NK, through the testimonies of three witnesses who came out of North Korea between May and June, got a glimpse into the lives of North Korean citizens.

Mr. B is a farmer in a county, Hwanghae Province. He met with a reporter while visiting relatives in China early last month, when the food shortage was severe in North Korea.

B said that food in Hwanghae Province, traditionally a granary area, is absolutely insufficient. Since the mid-90s, food has not been adequately distributed and a vicious cycle of food crisis and a lack of an effort by farmers have been occurring.

Regarding the cause of the reduction in the volume of food production, B noted, “You could possibly name several reasons, but the most important factor is the lack of earnestness by farmers. It is difficult to find people who work with consciousness. There is no reason to work, because even if people work hard, there is no food provision. In the 80s, before Kim Il Sung’s death, the estimated corn yield per unit of an area (approx. 2.45 acres) was even up to 10 tons. After his death, the yield has been about 3 tons per unit area.”

In June in Hwanghae Province, the reaping of wheat and flour begins. Accordingly, the food crisis can temporarily recover. If wheat and flour are produced, around 20 kilograms are distributed. However, these are excluded from the total distribution from the autumn harvest.

He stated that North Korean farmers have been finding a way to get by on their own for last 10 years after the March of Tribulation in late 1990s, due to the unstable food provisions. He cited three methods of survival for farmers in Hwanghae Province: “private farming, pilfering grains of farms, and doing business.”

Furrows are allocated to farmers for private farming

Because distributed food for individuals has not been enough, he said that land has been allocated according to the number of family members so that private farming could be carried out. This means, the authorities distribute no filed of the farm, but furrows and footpaths in the farm, so that farmers could plant peas or potatoes between crops.

“The state was supposed to provide 280kg of unpolished grain after a year of farming by the farmers, but only 120~130 kg are provided, which is not sufficient for the year. So all kinds of other crops are planted in the furrows and shared among the people. Furrows do not have to be registered with the state, so they can be operated independently. In Jaeryong County, Hwanghae Province, such methods have first been adopted. Half of the Province has started to employ this method.”

In actuality, the production volume of potatoes planted among corn furrows exceeds that of state potato farms. Mr. B said, “Farmers are zealous about planting potatoes in the furrows, because it has to do with private profits. They share over 50kg amongst each other. This helps get over the difficult month of June.”

Mr. B said that 150kg of food was produced from private field cultivated on an inclined plane of a mountain and in his home site. He said, “After discussions with the mountain surveillance directors, they have agreed to give a 30% of their production, even plant some trees, and engage in farming. If the deal is not kept, however, the steep land on mountains is not given to them for the subsequent year.”

B explained that besides private farming, another critical method of survival for the citizens in Hwanghae Province is pilfering grain under the control of the state. For several years, national provision has not been carried out properly, so coping methods by farmers have also become more aggressive.

He said, “Before harvesting officially the farm’s crops, farmers pilfer grains on fields every night. These stolen grains are actually their lifeline for the next year. Farmers are saving corn and rice for a year in this way.”

He said that the amount of food secured by farmers via such a method is different from person to person, but in the Jaeryong plain, people have been able to secure up to one ton of food. Through that rice, people are able to acquire daily necessities and send them to relatives in the cities.

During falls in North Korea, it is a well-known fact that the farmers and the state frequently scramble for grain. As a result, the North Korean authorities, since three years ago, have dispatched nation widely the People’s Safety Agency Political College students and have engaged in food recovery operations.

“Hide the food in a pigsty.”

B said, “Even a few years ago, there were a lot of people whose food were confiscated by the students, but the situation is different now. However, even last year, food was not preserved in the homes, but was hidden under the floor of pigsties or buried underground and covered with garlic fields. During last year’s harvesting season, the citizens benefitted this way and have been able to get by until now.”

However, he said that people who are who is honest and forthright or the elderly inevitably have a difficult time in the battle for pilfering grain.

Mr. B added, “Going out to the fields at night and gathering enough food before the harvesting period is a life and death matter. Without stealing, one ends up starving, so who would just sit there?.”

He additionally introduced a different style of persons belonging to a farm besides farmers. He said “There are about five traders in agricultural districts per work unit which consists of 50 households.” According to him, the managers of work units call them “8.3.” The name stuck after Kim Il Sung’s decree on August 3rd that necessities of daily life were to be independently produced in factories or work units. These people are often deployed by farms to be in charge of civilian projects ordered by the state. When the state demands necessary commodities, money or food from farmers under the pretext of support for the army or national construction, these traders take charge of the management.

They are the ones who go around to secluded villages and purchase 2~3 tons of corn and pea from the villagers in exchange for rice, oil, seasonings and flour, which usually produces a profit of 50 to 100 won per kg. But they have to sell over 15kg per day in order to buy a kilogram of corn.

B said, “Most of the people get by from private farming, theft, or doing business, but a minority do not even have any know-how to do that, so are in adversity. They have to endure the spring shortage period, skip meals, or eke out an existence on porridge. As a last resort, they borrow food at a high rate of interest and get by. Such a pattern is repeated the next year, so their debt only increases and they end up in even more desperate situations.”

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North Korea’s continuing social change

Friday, June 20th, 2008

The Daily NK posted a fascinating interview with a local North Korean merchant.  He provides interesting anecdotes of everyday life:

Tongil Market (Featured in A State of Mind):

Nowadays, the way to survive is selling in the jangmadang (market). With the exception of the residents of the Joong-district and its vicinity, who are often mobilized to national events, seven out of 10 households do business in the jangmadang. In the Pyongyang Tongil (unification) Market alone, the number of people doing business is between 5,000~6,000 people. The size of a street-stand is approximately 50cm by 50cm large. There are also about 2,000 people selling outside of the market.”

“There are people also selling in the alleyways. The Tongil Market usually consists of people from the Tongil Street, so merchants from the other regions cannot do business there. In the Tongil Market alone, there are around 8,000 people [doing business]. Because the Market is so large, the cadres from the other regions frequently come to buy goods.”

Even in North Korea, capital enhances worker productivity: 

Mr. A said that in the markets, the sale of industrial goods (all kinds of products such as clothing brought from China) and cosmetics are supposed to be lucrative. The traders usually bring in about 5,000 won per day and 15,000 won per month. Such an amount of money can buy about 2kg of rice per day. The people who make a lot of money are the marine product merchants. They make around 7,000~8,000 won per day. Marine products are often purchased by officials who have money and rice.

The people in the lowest class do not have the capital to do business, so a majority of them sell noodles or food. They make about 1,500 won per day, which can purchase about a kilogram of corn. People who sell food sell rice, sidedishes, and snacks on site. To them, selling is a battle to survive.

Coping mechanisms:

Mr. A relayed that not-so-affluent households raise several domestic cattle, collect medicinal herbs or brew liquor to sell. The remnants of the liquor are used as livestock feed. Selling two bottles of liquor made of corn as raw material generates about 500 won in profit. However, the authorities have strictly been regulating brewing liquor in homes, resulting in difficult situations. If exposed for making liquor, both the person-in-charge and the People’s Party Unit chairman are banished to the countryside.

Beekeeping is seasonally supposed to be lucrative. In May when the acacia flowers start to bloom, the number of people who collect honey in the mountains increases. In the surrounding areas of Pyongyang, there are at least trees on the mountains, so beekeeping has been feasible. One person can collect about 100kg of honey per month by keeping around 15 beehives. The honey is usually consumed by people who want to use it in medicine or by officials.

Work overseas:

“The utmost goal of workers in Pyongyang is to go to another country to earn money. Recently, they have even gone to the Middle East, Southeast Asia, Africa, and the Democratic Republic of Congo. Once they leave, they do not return for three years. They can go back or stay in Pyongyang. Workers who have gone to Russia or to Congo for farming come back with 10,000~20,000 dollars in three years.”

“With that money, they can buy a house and prepare a significant amount of capital for business. Those who have gone abroad not only do the work ordered by organizations, but also engage in private farming, do business and save as much money as they can. There have been a quite a few people around me who have gone abroad recently to make money this way. Out of 100 male workers, there is at least one or two. In order to go overseas, one has to pay 300~400 dollars in bribes.”

Read the full article here:
Doing Business Is a Battle
Daily NK 
Jung Kwon Ho
6/18/2008

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DPRK food prices falling?

Thursday, June 19th, 2008

The Daily NK reports food prices are falling in North Korea on news that international aid is due to arrive—proving that although the politics might not make much sense, the economic actors are rational: 

The price of rice in Pyongyang ha[d] risen to 3,000 won per 1kg, but since late May, the high-quality polished rice has been around 2,500 won, the medium quality rice around 2,400 won and unpolished brown rice around 2,300 won. Wild rice imported from Northeast Asia has been around 2,300 won. [Which was the price in April].

The price of corn is still around 1,500 won. Rice is not lacking in the jangmadang [markets], but corn has been. The reason for that is that last year, there was a rumor that planting soy and making tofu is lucrative, so everyone planted soy instead of corn.”

UPDATE: The article does not suggest that the food situation is getting better.  People are also economizing their consumption which mutes demand to some degree (eating two meals a day for instance). 

Read this very interesting article here:
Doing Business Is a Battle
Daily NK 
Jung Kwon Ho
6/18/2008

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DPRK economy shrinks for second year: Bank of Korea

Tuesday, June 17th, 2008

North Korea does not publish economic data.  The size of North Korea’s economy is estimated by South Korea’s Central Bank (Bank of Korea), the US Central Intelligence Agency (CIA), and other think tanks such as the Sejong Institute (Lee Jong Seok)

According to a recent report by the Bank of Korea, North Korea sufferd its second full year of economic contraction (as defined by GDP), 1.1% in 2006 and 2.3% in 2007.  The bank estimates North Korea’s 2007 gross national income (GNI/GNP) at $26.7 billion, per capita GNP at $1,152 (assuming population of 23 million).  If you are interested in knowing the difference between GNP and GDP, click here.

Here are some highlights from the report:

Agriculture, forestry & fisheries marked a 9.4% decrease following a 2.6% decrease in 2006

Mining increased 0.4% in 2007, down from 1.9% increase in 2006

Manufacturing increased 0.8%, higher than 0.4% 2006 increase. -1.7% growth in light industry, due to the decrease in food products and beverages. +2.3% growth in heavy industries led by expansion of metal and machinery products.

Electricity, gas & water production increased 4.8%, (+2.7% in 2006), from hydroelectric and steam power generation.

Construction production -1.5%, (-11.5% in 2006), from reduced non-housing construction and civil engineering.

Services +1.7%, (+1.1% in 2006). Hotel, restaurant, transport, post & telecom industry expanded.

Trade volume (goods) fell 1.8% to $2.941 billion, 1/248 South Korea’s. Exports fell 3.0%, imports fell 1.3%.

These estimates are based on trade figures obtained from the Korea International Trade Association, Korea Trade and Investment Promotion Agency, fuel and food aid figures from aid groups such as the International Red Cross and the World Food Program, as well as information provided by frequent visitors.

More information here:
Full report by Bank of Korea  and data (recomended)

North Korea’s Economy Shrank in 2007, Second Annual Contraction
Bloomberg
Heejin Koo
6/17/2008

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How much food do they need?

Tuesday, June 17th, 2008

A few weeks ago, I speculated that no one knows how much food the North Koreans really need, even the DPRK government.

On one side of the debate, the UN World Food Propgram claims that North Korea has a 1.67 million ton grain shortfall leaving 6.5 million individuals at risk.  These are North Korea’s numbers and the WFP/FAO is required to accept them.

On the other side of the debate, Marcus Noland and Stephan Haggard argue the DPRK’s grain shortage is closer to 100,000 metric tons.  The discrepancy arises because the UN’s estimate is based on individuals needing 460 grams of grain per day to sustain life, but in reality, grains are supplemented by potatoes and other vegetables, lowering the amount of aid needed to sustain the population.  Their calculations are explained here.

South Korea’s National Intelligence Service and Ministry of Unification buttress the Noland/Haggard assertion that things are not as bad as the UN numbers suggest (Daily NK). 

In an effort to document the state of affairs via field research, the UN WFP is conducting a survey across 50 counties in the DPRK.  According to the BBC:

Staff from the UN World Food Programme have been given rare access to North Korea’s countryside to assess the seriousness of food shortages there.

The audit, being carried out across more than 50 counties, comes at a critical time.

Some recent reports suggest that the country may be on the brink of famine.

North Korea is estimated to have a shortfall of 1.6 million tonnes of grain because of last year’s flood-affected harvest.

But a true picture of the scale of the crisis is very difficult to determine.

Twelve WFP staff and eight US aid agency workers are now fanning out through North Korea, albeit with government minders, visiting hospitals, schools and individual households.

Their work is expected to take two weeks, by which time the world should have a much clearer understanding of the true nature of North Korea’s food crisis.

Here is the World Food Program’s North Korea Page.  I have not found anything on the survey team, methodology, or operations.  I will post something here if I do.

Read the full artilces here:
Balance of Principle and Flexibility Are Needed When Providing Food Assistance to North Korea
Daily NK
Choi Choel Hee
6/16/2008

Asia’s Other Crisis
Newsweek
Stephan Haggard and Marcus Noland
6/26/2008

UN assesses N Korea food supply
BBC
John Sudworth
6/17/2008

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Border guards and North Korea’s food shortage

Monday, June 16th, 2008

Last autumn, Chinese rice sold for 900 won/kg in northern North Korea.  The Chinese Yuan’s appreciaiton, combined with food export restrictions, caused North Korean rice prices to increase to about 2,000 won/kg this year.

Where does this money go, and what can these prices tell us?

According to an article in the Daily NK, this is how the retail rice price breaks down: 

37,600  won = purchase price for 25kg sack of Chinese rice
10,000 won = DPRK border guard bribe
+ 3,750 won = Chinese smuggler commission (150 won/kg x 25kg)
51,350 won = Korean smuggler purchase price (2,054 won/kg x 25kg)
+ 3,750 won = Korean smuggler markup (150 won/kg)
55,100 won = Retail vendor purchase price (2,204 won/kg x 25kg)

If the above numbers are true, combined middlemen commissions (Chinese and Korean smugglers) comprise just 13% of the retail price, bringing them just over $1USD per 25kg bag (appx 3,000 won=$1USD).  This indicates the field is fairly competitive.   In fact, border guards make more than both the Chinese and North Korean smugglers combined, for much less effort.  In all fairness to the border guards, they have families to feed as well and each probably paid a hefty amount for his job.  Besides, if they were not so corruptible, North Korean food prices would be higher.  Since North Korea can’t get rid of their border guards, the next best thing we can hope for is lots of corrupt ones.  If the market is competitive, North Korean consumers could see rice prices fall up to 18%.

Read the Daily NK article here:
What Is the Truth of the Food Crisis in North Korea?
Daily NK
Moon Sung Hwee
6/6/2008

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‘Good Friends’ launches video appeal

Monday, June 9th, 2008

Seoul-based “Good Friends” says North Korea is dangerously short of food.  The group released video interviews with disguised North Korean officials appealing for food aid.  They claim one or two people are dying each day in every district of several of North Korea’s southern provinces, which were hardest hit by last year’s heavy flooding. 

 From Voice of America:

One North Korean man says farmers have consumed all of their seed corn and grain and are suffering the most.  Hunger has also brought education to a halt.

“Teachers are saying that if food conditions remain in this precarious state, children will not report to school regularly,” he said. “When the teachers try to get the students to come to school, they are always told that either the children have to go begging for food with their parents, or that they are lying in bed because of starvation.”

“In some districts, workers have not received a month’s worth of rations.  This is the reason why workers are not coming to their factories,” an unidentified Korean said.

Check out the videos on the Voice of America web page:
South Korean Aid Group Releases Video Testimonies Of North’s Food Crisis
Voice of America
Kurt Achin
6/9/2008

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Recent rice prices skyrocket in DPRK

Friday, June 6th, 2008

Institute for Far Eastern Studies (IFES)
5/6/2008

Even North Korea’s North and South Hwanghae Provinces, an area known as the DPRK’s ‘Ricebowl’, now appears to be suffering severe rice shortages, with prices at the end of last month hitting 4,000~4,500 DPRK Won per kg, more than three times the cost of a kilogram of rice last February, according to a June 5 report by Good Friends, a human rights group focusing its efforts on North Korea.

According to Good Friends’ latest newsletter, prices across South Hwanghae Province all rose to 4,500 DPRK Won on May 30, and at the same time, prices in South Hwanghae rose to over 4,000 DPRK Won per kg. In Sariwon, North Hwanghae Province, rice was 1,350 DPRK Won/kg in February, rose to 1,700 DPRK Won/kg in March, climbed again to 2,200 DPRK Won/kg in April, then shot up to 2,500 DPRK Won/kg on the 10 th of last month, 3,500 DPRK Won on the 25 th, and 4,200 DPRK Won on the 30 th. As the average monthly wage of a North Korean laborer is thought to be around 3,000 DPRK Won, rice selling at 4,000 DPRK Won/kg is well out of reach.

Corn prices in the Sariwon region at the end of last month was 1,950 DPRK Won/kg, 270 percent higher than the 720 Won prices seen in February, and the newsletter reported that prices throughout North and South Hwanghae Province were generally 1,950-2000 DPRK Won/kg. In particular, the newsletter stressed that at one military base in the Hwanghae area, rations have run so short that officers with children under the age of 12 will be ordered to send their families to their parents’ or in-law’s house until rations are reissued in November.

The newsletter drives the point home by pointing out, “These officers that send their families will take their meals on base…this is the first time since the ‘arduous march’ that there has been an order to send families [away] because of this kind of ration shortage.”

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Blame it on the weather…

Wednesday, May 28th, 2008

As with the famine that struck the DPRK in the 1990’s, known as the “Arduous March,” the North Korean government is again blaming the weather for the food shortage. 

From Reuters:

North Korea’s farm sector will take a hit due to cold weather and low precipitation this planting season, its official media said on Wednesday, after experts had warned the destitute state could be heading toward famine.

“The current spring weather has a bad effect on agriculture in the Democratic People’s Republic of Korea (North Korea),” its official KCNA news agency reported.

“The abnormal weather has seriously affected the growth of maize crops on a vast acreage of fields, cultivation of rice-seedlings and the striking of roots of rice-seedlings in the west coastal areas, the granary,” KCNA reported. 

From the Associated Press (via the IHT):

North Korea’s average high temperature in May has been about 3 degrees Celsius (5.4 degrees Fahrenheit) lower than in previous years, with temperatures in northern parts of the nation dipping below the freezing point, the official Korean Central News Agency said.

It is true that the weather is a factor, but these effects can be mitigated by better policy solutions.  Cracking down on local markets and chasing after entrepreneurs certainly does not help either.

According to Glyn Ford, member of the European Parliament:

[T]he Vice-Chair of the State Planning Comission said when I met him, “Agricultural reforms proved better than fertilizer at raising productivity.”

Read the full articles here:
Food-short N.Korea says farms hit by bad weather
Reuters
5/28/2008

North Korea says cold weather seriously affecting farming
Associated Press (via Herald Tribune)
5/28/2008

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Haggard, Weeks op-eds on DPRK food crisis

Friday, May 23rd, 2008

Newsletter from Marcus Noland
5/23/2008

Linked below are three op-eds written with Steph Haggard and Erik Weeks addressing the looming humanitarian crisis in North Korea which have appeared recently in Newsweek International, the Korean Herald, and OpenDemocracy, respectively:

“Asia’s Other Crisis” – Newsweek International
 
“Famine in North Korea? The Evidence” – Korean Herald
 
“North Korea: The Next Famine” – OpenDemocracy

 A longer policy brief addressing North Korea’s hunger issues can be accessed at:
 
“North Korea on the Precipice of Famine”
 
Finally, from the Shameless Commerce Division, Famine in North Korea: Markets, Aid and Reform will soon be released in paperback.  In anticipation, Columbia University Press is trying to reduce its inventory of the hardcover edition, and through 31 May has put the book on sale for the extraordinarily low price of $7 (the discount appears once you add the book to your shopping cart).  Act quickly while supplies last!:
 
“Famine in North Korea: Markets, Aid, and Reform” – Columbia University Press

(NKeconWatch:  With an honest sales pitch like that, you should probably buy two copies)

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