North Korea Today No. 175

Research Institute for North Korean Society

North Korea Today 175th Edition July 2008

“Research Institute for North Korean Society of Good Friends, in order to bring news of the food crisis in North Korea more accurately and quickly, will increase its e-newsletter frequency to more than one issue per week. As such, the release dates might shift. Thank you for your understanding and attention to this looming crisis. We at Good Friends hope to be a bridge between the North Korean people and the world.”

(Image by Google Earth)

National Rice Prices Steady at 2,500~2,700 won per kg Without Regional Variations.
Price of Grains in the Major Cities in End of July, 2008 (Table/Graph)
Grain Prices Are Still 3 Times Last Year’s – Out Of Reach for Most People
Kangwon Province Suffering the most from Current Food Shortages
Severity of Food Shortage Crisis in North Korea, July 2008 (Figure)
The Heungnam Fertilizer Factory Is the Most Productive In This Year
Nitrogenous Fertilizer Arrives in Haeju City for the First Time This Year
Heungnam Fertilizer Distributed to Each District of North Hamgyong Province
[Opinion] Despite Some Signals of Change, North Korea's Food Situation Is Still Gloomy

National Rice Prices Steady at 2,500~2,700 won per kg Without Regional Variations.
Rice prices, which had gone all the way up to 4,000 won per kg in regions around North and South Hwanghae Provinces in late May, have been going down steadily since then and are now around 2,500 won per kg nationwide without too many regional variations. The rice prices were so unstable in late May that they would be different in the morning and evening of the same day. But they have been stabilizing throughout June and are now stable across the board in July. If you compare the prices of staple grains in major markets throughout the nation, rice’s prices are at 2,500~2,700 won and corn prices are 1,300~1,500 won without any overt regional variations. One of the reasons for the stabilization of grain prices was the psychological comfort that news of food imports from the United States and elsewhere had on the markets. Also, smuggling of food and small-scale imports from China have been coming in steadily since last month. External aid included 3,000 tons of flour from Russia and 37,000 tons of food from the U.S., as the 1st shipment of the promised 500,000 tons. As such, the grain prices are predicted to remain at a high but stable level, with the expectations that food from external sources will continue to come in.

Price of Grains in the Major Cities in End of July, 2008

Grain Prices Are Still 3 Times Last Year’s – Out Of Reach for Most People

As you can see from the grain prices charts above, rice prices, which had “gone insane” at one time, have now stabilized at a high but stable range, albeit 3 times the level of last year. However, for everyday people, the prices are still too high and make buying the grains out of reach. It is like a picture of a delicious cake, appetizing but not real.

When comparing today’s grain prices in Chungjin and Hamheung City to last year’s, it is easy to see how more expensive today’s prices are. Last year, both Chungjin and Hamheung’s rice and corn prices were 900 and 300 won, respectively; in 2008, the rice prices are now 2,500~2,700 won, about three times last year’s prices. Of course, the prices have come down greatly from the high of 3,800 won in May. However, they are still prohibitely high compared to last year’s.

The stabilization of grain prices is the result of the influx of food from external aid sources. This is good for those people with money enough to buy food in markets. But for those without money, approximately half of the population, the food prices are still too high for them to afford it.

Kangwon Province Suffering the most from Current Food Shortages
According to one official, as far as the central party is aware, Kangwon Province is suffering the most from the food shortages, followed by Jagang Province. He said that the worst hit provinces were North and South Hwanghae up to May and June. However, since double cropping is possible in Hwanghae provinces, they were able to get a spotty harvest of barley, wheat, potatoes, and other crops to relieve a portion of the population from relying entirely on grass porridges for their food. Although it is still not enough to completely stop people from starving to death, there is definitely fewer people dying from hunger than before.

In comparison, mountainous terrain of Kangwon and Jagang provinces cannot support farming as well and, accordingly, continue to suffer acutely from food shortages. If they were to put the provinces in the order of suffering from the food shortage, from worst hit to least, it would be Kangwon, Jagang, South Hamgyung, Ryanggang, South Hwanghae, North Hwanghae, South Pyongan, North Hamgyung, and North Pyongan province. Kangwon to South Pyongan provinces are seeing people who have actually starved to death; North Hamgyung and North Pyongan have not suffered any famine victims but are seeing people dying of indirect causes such as malnutrition and other hunger related diseases.

Severity of Food Shortage Crisis in North Korea, July 2008

The Heungnam Fertilizer Factory Is the Most Productive In This Year
The Heungnam Fertilizer Factory of South Hamgyong Province has managed to produce a record amount in order to meet the fertilizer demand of the entirety of North Korea. To increase productivity, officials of the Central Government and executives of the Ministry have already visited the factory several times this year and emphasized the importance of producing fertilizer. An official of the Central Government said, “Because South Korea did not send us any fertilizer this year, the government ordered the manager of the Heungnam Fertilizer Factory and the secretary of the Province Party to produce the necessary fertilizer for this year without any conditions. It also sent workers of the factory a letter of encouragement.” According to the 3rd 7-year plan, the Heungnam Fertilizer Factory has rebuilt its entire facility. Despite the extensive construction, shoddy building has resulted in little change in productivity. However, the factory has made every possible effort to refit machinery for this year, resulting in an increase in efficiency in 2008.

The Heungnam Fertilizer Factory thoroughly supervises the loss of fertilizer as well as increases its productivity. To insure that no one steals fertilizer, the factory has police officers and security guards at the front and rear gates, even going to far as to search workers’ homes to take back any stolen product. However, when farmers receive the nitrogenous fertilizer made by the Heungnam Fertilizer Factory, they do not seem to be happy and satisfied. They know that this fertilizer is low quality, meaning that it will be difficult to increase their crop yield. While many farmers are disappointed, those who did not even receive the poor-quality product from Heungnam are still envious of those who have something to spread on their fields.

Nitrogenous Fertilizer Arrives in Haeju City for the First Time This Year
On July 2, nitrogenous fertilizer produced by the Heungnam Fertilizer Factory of South Hamgyong Province arrived at Haeju station, South Hwanghae Province for the first time this year. Farms around Haeju City need the fertilizer, but have been unable to receive any due to a lack of diesel oil and thus no means of transportation. The City Party held an urgent meeting and the secretary in charge gave the managers of factories and enterprises and the party secretaries instructions that the companies should deliver the fertilizers to the farms. In fact, the supply office for farming materials has already distributed diesel oil to deliver fertilizer for this year, but each farm sold the oil in order to buy food for their workers.

Heungnam Fertilizer Distributed to Each District of North Hamgyong Province
Since July 9, Heungnam nitrogenous fertilizer produced by the Heungnam Fertilizer Factory has been distributed to each city and county of North Hamgyong Province. According to the order of the City Party, each district police station sent a representative along with two officers pick up the fertilizer. It is understood that the purpose of including the officers as guards is to prevent fertilizer from being stolen during delivery.

[Opinion] Despite Some Signals of Change, North Korea's Food Situation Is Still Gloomy
While North Korea's food shortage has deteriorated since last spring, there have been some signals of positive changes since July 2008.

First, food prices have shifted. Food prices that had begun to soar in the end of March peaked in late May, started to drop in mid June, and became stable in mid July. U.S. food aid is flowing into North Korea and assistance from the outside world is gradually increasing as well. In addition, a small amount of food smuggling is taking place in national border areas. These external factors seem to contribute to stabilizing food prices in North Korea.

Nonetheless, rice and maize have tripled in price compared to last year. Without the state's food rations, the high grain prices primarily affect those ordinary people who have no regular source of income and who are still suffering from food shortages. Although food prices have increased threefold since last year, prices of other commodities have remained stable. Even 2-3 years ago, electric home appliances were in great demand despite their high market prices. This year, however, prices of other goods, including the electric home appliances, have dropped as people spend most of their income on purchasing food.

Secondly, the spread of death by starvation has receded. Famine started in Yangduk County, South Pyongan Province in late April, expanded to South Hwanghae Province in early May and to North Hwanghae Province in late May. In June, cases of deaths by malnutrition as well as from family suicide were reported from most parts of the nation except Pyongyang.

The death toll that had been increasing across the country began to decrease gradually in July, due to exterior and interior factors. More areas of North Korea have started to receive outside aid, including ports, cities, factories, and other businesses. Also, this year's first harvest of double-cropping produce, such as barley and potatoes, from farm villages in Hwanghae Province has helped relieve the dire food situation in the region.

Thirdly, areas of serious food shortage have been changing. In May, Hwanghae Province was the area suffering from the most acute shortage of food in the nation. Farm workers were absent from duty and people began to die of hunger in a large number of farm villages. However, as double-cropping produce, including potatoes, barley, and wheat have been harvested since July, the overall food situation in Hwanghae Province, which has vast farmlands, is improving. Unfortunately, the food shortage in Kangwon and Jagang Provinces, which have relatively small farmlands and barren soil, is becoming more severe. Not only have these provinces been unable to produce their own food, aid from the outside world also has yet to arrive in these areas. The inconvenient locations of the two provinces—for example, no access to a large port—are part of the reason for the delay in delivering food assistance.

Despite the harvest of double-cropping produce and the current stability of food prices (at three times higher than last year's level), the food situation of North Korea could not be described as having improved. The food aid from the outside and the harvest of double-cropping produce can only serve as temporary pain relievers; they are still insufficient to cope with the crisis.

The Food and Agricultural Organization of the United Nations (FAO) estimates that North Korea's food deficit for this year reached 1.66 million MT. Even the combination of the current international food support and the total production of double-cropping will be unable to meet the FAO's estimate. It is important to pay attention to the FAO's April 2008 report saying, "Considering North Korea's economic hardship and a recent increase in international food prices, North Korea is not able to rely on ordinary trade and instead must depend on international aid."

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