North Korea has been in the midst of a self-declared food crisis since 2021, and the country’s leadership has declared its intention to normalize the food supply and develop rural areas. The country’s food insecurity is a long-standing problem, however, and previous iterations of its rural development strategy have either proved fruitless or remained largely unimplemented. Given the limited fiscal capacity of the North Korean state and the fragility of its agricultural system, there is little reason to believe that this time will be any different.
Introduction
On April 15, 2012, Kim Jong Un told a packed Kim Il Sung square in Pyongyang that North Korea “would never have to tighten its belts again.” The country experienced a disastrous famine in the 1990s, and this declaration was clearly meant to signal that the new leadership was determined to ensure it would not happen again. The famine was due to a range of factors. Some were idiosyncratic to the time, like the collapse of the Soviet Union and the resulting trade shock and widespread flooding in 1995. More importantly, the famine was a result of decades of agricultural mismanagement; the regime had created an agricultural system that was chronically dependent on Soviet subsidies and was unwilling to divert resources toward food imports.
The situation has improved markedly since then, if data from the Food and Agricultural Organization (FAO) and UNICEF is to be believed. However, the country still suffers from chronic food insecurity, with the fears of a potential famine voiced on a semi-annual basis. What is more, since 2021, the country has been in the midst of what Kim Jong Un described last year as a “food crisis.” This declaration from the leader himself is highly unusual and implies that the food situation is more acute than it has been in the past.
The solutions that the regime has pursued for the country’s food insecurity involve a mixture of incentive changes at the production level, continued centralized control over the allocation and distribution of food, and calls for greater capital investment. However, the country’s limited resources and continued aversion to market incentives have hamstrung efforts to fix its long-term food problems. This article considers what has gone wrong and what could be done to ameliorate the current crisis.
Understanding Chronic Food Insecurity in North Korea
To understand North Korea’s chronic food insecurity issues, we should begin with the country’s long-standing problems with agricultural mismanagement. The inefficiencies of the agricultural system transplanted from the Soviet Union were further exacerbated by indigenous “innovations.” For example, dramatic attempts to reclaim land from the seas and mountains to boost output ultimately proved counterproductive because they aggravated flood damage and polluted the country’s rivers. Furthermore, North Korean farmers have little power over operational decisions that affect crop yields or even choices of crops, as control is centralized well above the level of production through the Ministry of Agriculture. Farmers were supposed to be incentivized to produce to quota with better housing and ever-growing supplies of consumer goods, but these planned improvements in living standards largely did not materialize.
In 1996 and 2002, Kim Jong Il attempted to reform North Korea’s agricultural sector, a project which failed due to a lack of political will to actively support reforms and the agricultural sector’s heavy reliance on industrial inputs such as chemical fertilizer. Later, in 2012, Kim Jong Un indicated his interest in reforming the country’s agricultural system. After a process of policy discussions and trials, he unveiled the “Field Responsibility System” (FRS), a scheme which allowed farmers to keep a share of any grain they produced in excess of their quota as opposed to a fixed maximum allocation. The number of farmers in a “sub-work team,” the lowest working unit, was reduced from around fifteen to around five to better monitor individual performance and alleviate free rider problems.
The five-year economic strategy released in 2016 targeted a grain output of 8 million tons per annum by the end of 2020. This involved a rise of around 30 percent on the internal 2014 grain output figure of 6.14 million tons, or an annualized growth rate of 6.84 percent over the period. The five-year plan overall ended in failure, and FAO figures on grain output indicate that the agricultural sector was no exception. Many farmers who came to South Korea even mentioned that they were unaware that FRS reforms, which were part of the failed five-year strategy, were actually in place. In addition to the FRS, North Korean farmers and lower-level managers had been given more autonomy on deciding what crops and animals to grow under the so-called “Farms Responsibility Management System,” but these impacts are largely at the margins of the official system, which is still largely focused on boosting incentives to increase centralized grain production through the FRS.
Moreover, given how dependent the agricultural system is on industrial inputs, such limited reforms would struggle to produce concrete results without improvements in the alarming agricultural input supply situation. Internal figures indicate that chemical fertilizer production peaked in 1979 at 2.91 million tons. The 2016 five-year economic development strategy targeted an annual output of 1.2 million tons of nitrogen fertilizer. However, given the country’s massive importation of fertilizer as late as 2018 (over 250,000 tons) and ongoing appeals by the government to farmers to make use of organic fertilizer sources, it is unlikely these targets were achieved, notwithstanding the apparent opening of new facilities.
Therefore, leading economists who have studied North Korea’s chronic food insecurity have concluded that the country’s avowed commitment to food self-sufficiency is wrongheaded. The country would struggle to feed itself without significant imports, even if its agricultural sector was well-managed, which it is not: aggregate output of cereals peaked over forty years ago in 1979 at just over 6.5 million tons, according to internal North Korean data, and has not improved since then.
Potential Solutions to North Korea’s Food Insecurity
At the start of 2022, Pyongyang outlined the contours of a renewed rural and regional development strategy that looks surprisingly similar to the one pursued by Kim Il Sung in the 1970s: closer management of farmers, an increased amount of land under cultivation, and improved living standards for farmers to motivate greater productivity.
Real changes have taken place outside the framework of official reforms. According to surveys of North Korean refugees, residents of some borderland provinces like North Hamgyong and Ryanggang are believed to acquire much of their food through sloping field agriculture. The fact that such seemingly unproductive land can produce such significant quantities of food, in parts of the country not known for their agricultural output, is instructive. Even while domestic fertilizer production only meets half of North Korea’s total requirements and North Korean agricultural mechanization rates are only around 30 to 40 percent, restructuring property rights could reap significant dividends.
North Korean farmers could be given greater flexibility about what they farmed. Operational control and potentially sellable/leasable tillage rights would incentivize greater intensity of cultivation and more efficient use of inputs. Incentives in the agriculture sector may also create motivation in related industries and boost the production of fertilizers and other key agricultural inputs supplied to farmers. In addition, if productivity rises in agriculture, some of the surplus that farmers generate could boost the purchasing power of rural households sufficiently to enable them to purchase imported inputs.
At the same time, the country’s lack of agricultural capital stock, including reservoirs and irrigation canals, points to a major reason why droughts and other extreme weather events have had such disproportionately negative effects on the North compared to the South. The North Korean government has displayed a remarkable appetite for gigantomania in its construction of apartment complexes in the capital and tourist attractions like the Masikryong Ski Resort. The regime can afford to invest more money into building agriculture-related infrastructure that touches on people’s welfare directly, as opposed to continued investment in superfluous vanity projects.
Indeed, North Korea’s past offers many lessons on how not to pursue rural development but few solutions to its agricultural problems. Maintaining self-sufficiency in the production of grain has remained the priority for the regime for much of its existence. While this is difficult to do given a lack of arable land and the resultant dependency on industrial inputs, the regime does not believe relying on foreign farmers to feed its army and citizenry is tenable from a national security perspective. There are valid security and even social reasons for this policy priority.
North Korea has remained in a state of war with its southern neighbor and its ally the United States since 1950, and regime survival remains the overwhelming priority for Kim Jong Un. While fundamental changes to the agricultural system or rural economic diversification may significantly relieve the North Korean food shortage, giving farmers land-related property rights, control over the production process, or freedom to choose their occupations (i.e., to not be farmers) may threaten the security of the Kim family’s rule. Creating rural entrepreneurs with an independent status in the system would potentially hand power to an incipient interest group that could begin demanding changes to the country’s socioeconomic and sociopolitical order.
Fixes to property rights are unlikely to be an immediate panacea, and such changes may lead to significant volatility in food prices in the short run. This means that any change needs to be staged and gradual, and there is the threat that changes might get stuck in a “partial reform equilibrium.” In other words, radical change may fail to materialize because existing interest groups in the vast security sector (not least the military) and elsewhere may sabotage reforms through forced requisitions of grain. Hence, in any serious attempt to change the North Korean agricultural system, ensuring that groups that benefit from the existing order are compensated through other means is a necessity.
What all of this points to is that North Korea’s agricultural and food situation is bad and has been so for many decades. A leadership that distrusts farmers and is more concerned with flashy projects and magical solutions to problems such as land reclamation has kept North Korea’s agricultural sector trapped in a stagnation of low productivity and low output. Solutions do exist, but they would require compromises with farmers and compensation to the beneficiaries of the present order, which makes them difficult to implement in current political settings.
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Peter Ward, PhD is a senior researcher at Kookmin University in Seoul. His research focuses on North Korean markets and corporate governance, the military’s economic activities, political elites, and South Korean migration issues. His work has been published in Communist and Post-Communist Studies, International Migration, and other academic journals, as well as regularly at NK News/NK Pro.
Image Credits: Marie Anna Lee