Earlier this month the Food and Agriculture Organization released a report on the 2014/15 outlook for North Korean food supply and demand. The report is essentially an update relying on North Korean government statistics, not a full assessment, insofar as FAO teams were not permitted in-country as they had been in the recent past. Given the lack of direct access, perhaps it is not surprising that the FAO reached the risk averse conclusion that food production “remained stagnant,” neither increasing nor decreasing precipitously from the previous year. In the FAO analysis, the main drivers of outcomes are weather, and in the case of corn production, a mass mobilization to hand-water the stalks. The FAO does not discuss the possibility of improved yields due to reforms and improved incentives.
Yet the FAO concludes that the uncovered grain deficit has widened to 107,000 metric tons mainly due to a new, higher estimate of post-harvest losses reached on the basis of a 2014 study conducted by the Pyongyang Agriculture Campus and Kim Il Sung University in conjunction with the FAO and the United Nations Development Program. (The North Korean government uses a higher per capita basis needs benchmark, so implicitly the North Korean government’s assessment of uncovered needs is significantly higher.) The FAO concludes that most households maintain “borderline and poor food consumption rates.”
Reporting in the DailyNK fleshes out this macro view. In a series of stories, the paper argues that the reports of relatively robust harvests are belied by accounts of farmers not receiving their in-kind quota allocation, the public distribution system (PDS) being broken etc. There are two parts to the DailyNK narrative. First, to a certain extent the official output figures are politically determined: it was widely believed that output was exaggerated in the first harvest of the Kim Jong-un era, and the slight monotonic rise in succeeding harvests makes the political point that the Young General is managing the situation well, while perhaps allowing reality to catch up with the exaggerations of previous years. The imperative to produce politically palatable statistics may have been intensified by Kim’s calls for strengthening agriculture in the context of improving people’s living standards.
Second, DailyNK paints a picture of continuing farm-level problems. The basic outlines of the sharecropping arrangements on the cooperative farms are subject to dispute, and indeed there may not be a nationwide set of rules. But three issues stand out: the actual split between the government and the farmers; whether that division of spoils is based on production targets or actual output; and what the farmers are allowed to do with their in-kind bonuses if the sale of grains in the market is not permitted. Longer-term issues are whether or not the farmers are allowed to make their own crop allocation decisions, or whether they are forced to allocate acreage according to government dictates, and whether property or usage rights are sufficiently robust to induce investment in the land.
On the first issue, it is not clear what the sharecropping split is, and indeed it may not be the same on every farm. But a key issue is whether the division of output is based on actual output or production quotas. North Korea has a history going back at least as far as the 1990s of setting production targets too high and thereby undercutting the incentive effects of the sharecropping arrangement. DailyNK reporting alleges that farmers are being caught in excessively high production quotas due to local officials currying favor with higher ups by benchmarking their output forecasts based on yield data from their most productive farms. Add onto this the normal tensions between the cultivators and the coop managers, and military-first practices when it comes to grain allocations (i.e. the Korean People's Army gets first dibs on output), and the result is reports of farmers not receiving their in-kind bonuses, and the PDS being broken. That this year’s winter harvest is expected to be unusually low due to climactic issues just adds to the pressure on the system.
And apart from these short-run issues, in the longer term the supply-side of North Korean agriculture faces the issues of whether farmers will be allowed to make their own crop allocation choices (which would presumably involve a shift away from rice in certain areas not well-suited for the production of that staple and toward higher value-added products such as vegetables), and whether property or usage rights will be sufficiently secure that the cultivators would be willing to make investments in the land.
These problems on the supply-side manifest on the demand-side as well. Writing in the Washington Post, Anna Fifield reports that “The U.N.’s World Food Program estimates that the average North Korean’s diet is 25 percent deficient in protein and 30 percent deficient in fats, and that the average North Korean eats only half the number of calories each day as the average South Korean.” The North Korean consumption figures reflect a stagnation in consumption unparalleled in contemporary times: Eunjung Cho at Voice of America reports “On average, an adult in North Korea consumed about 2,103 calories per day in 2011, only a slight climb from 1,878 per day in 1961…The data also suggest that the average North Korean diet remains not only low in calories, but also unbalanced.” Working from FAO-WFP statistics, South Korean researchers found that “North Koreans eat the most grain-heavy diet of the 22 countries surveyed. North Koreans in 1961 derived more than 70 percent of their entire caloric intake from single grains, such as rice, wheat and maize. The percentage dipped only to 61 percent five decades later.” Cho goes on to observe that “Another problem with the North Korean diet is meat consumption, which plunged during famine in the mid-1990s and never fully recovered. An average North Korean consumed 141 grams of meat a day in 1989, but the figure stood at 67 grams in 2011, after years of famines and food shortages.”
So how does one square these reports of relatively good harvests over the past three years and relatively stable prices with continuing concerns about food insecurity as expressed by the FAO and most recently documented by UNICEF? There are many possible explanations but the simplest one is distribution. There is abundant evidence that North Korea is an increasingly unequal society. And to make matters worse, the PDS, which could be thought of as a kind of safety net, targets the elite. So it is quite possible that the availability of food could improve, yet some significant share of the population remains food insecure.
What then are the policy ramifications? One issue is that we have increasingly little grasp of how good (or bad ) things really are in North Korea and hence how urgent are humanitarian needs there relative to many other countries around the world where people go hungry. And by extension we don’t know what the implications for internal political stability are, if any, of these conditions. (Steph Haggard will follow up with a post on that issue tomorrow.) That the North Korean government would not permit the FAO to do a normal assessment does not speak well to the maintenance of a multilateral relief program already characterized by severe donor fatigue. Indeed with the WFP delivering less than 37,000 tons of grain that organization faces a dilemma: the costs of proper monitoring of such a small program are likely to be relatively high, and the North Korean government is unlikely to permit proper monitoring in any event. So the WFP could well be faced with a situation in which it either maintains a substandard program and runs the risks of scandals down the road, or shuts down a program that has been operating for nearly 20 years.
What does seem clear is that the North Korean government could close the grain gap through minor expenditure switches. As I wrote in the Guardian last year, “Today the gap could be closed for something on the order of $8 million to $19 million—less than two-tenths of one percent of national income or one percent of the military budget.” The new FAO figures (much less the North Korean government more ambitious targets) would generate a bigger price tag but the point remains the same: the food insecurity problem in North Korea has shrunk sufficiently that it is well within the power of the North Korean government to resolve it. It is now an issue of expenditure preferences, not a lack of resources.