North Korea farm reforms: First step to a market economy?
By Jean H. Lee, Associated Press, September 24, 2012
Sariwon, North Korea—North Korean farmers who have long been required to turn most of their crops over to the state may now be allowed to keep their surplus food to sell or barter in what could be the most significant economic change enacted by young leader Kim Jong Un since he came to power nine months ago.
The proposed directive appears aimed at boosting productivity at collective farms that have struggled for decades to provide for the country’s 24 million people. By giving farmers such an incentive to grow more food, North Korea could be starting down the same path as China when it first began experimenting with a market-based economy.
Farmers currently must turn everything over to the state beyond what they are allowed to keep for their families. Under the new rules, they would be able to keep any surplus after they have fulfilled state-mandated quotas—improving morale and giving farmers more of a chance to manage their plots and use the crops as a commodity.
Kim Jong Un, who inherited a nation with chronic food, fuel and power shortages, has made improving the economy a hallmark of his nascent rule. In his first public speech in April, he openly acknowledged economic hardship in North Korea, and pledged to raise the standard of living.
The young leader, who is the third generation of his family to lead North Korea since his grandfather founded the communist state in 1948, has already has made some significant changes. He dismissed his father’s army chief and promoted a younger general. He has also been presenting a much more accessible public persona, appearing among the masses with his wife and giving televised speeches, something his father shunned during his time in power.
North Korea has a per capita GDP of $1,800 per year, according to the U.S. State Department, far below that of its neighbors in Northeast Asia, and its rocky, mountainous terrain and history of natural disasters has long challenged the Kim regime to provide enough food.
Founder Kim Il Sung created the country’s farming system in 1946 by turning farms that had been private during colonial Japanese rule into collective operations.
At cooperative farms across the country, the government doles out fuel, seeds and fertilizer, and farmers pay the government back for the supplies, said Kang Su Ik, a professor at Wonsan Agricultural University.
The farmers’ crops go into the Public Distribution System, which aims to provide North Koreans with 600 to 700 grams of rice or cornmeal a day. However, a persistent shortfall of more than 400,000 tons a year in staple grains has meant lower rations all around, according to the United Nations, which has appealed for donations to help North Korea make up for the shortage.
