Land Tenure Center Newsletter
Number 81, Spring 2001, p. 1-5, 8-9
"Rice is Communism!" read the 10-foot high placards stretched across the rice paddy dike. Another slogan reads: "To the weeding battle front!" If official exhortation could grow food, North Korea would have abundant harvests. Unfortunately, other inputs are also needed: fertilizer, protective chemicals, machine power, and fuel. Due to a severe shortage of all of these essential inputs, grain production (primarily rice and maize) in North Korea has plunged to about one-fourth of levels achieved 10 years ago. The severe shortage of food has resulted in the deaths of hundreds of thousands and debilitating malnutrition for millions more. Humanitarian aid from China, South Korea, the United States, and United Nations’ agencies has kept many alive, but the fundamental problems remain largely unaddressed. In particular, open discussion of changing the centrally planned and collectively organized structures of the agricultural sector appears still to be proscribed.
As the representative of an international aid agency, I had the opportunity to visit a number of North Korean collective farms over the period 1997-2000. Our aim was to provide assistance that could increase food production as rapidly as possible, while also contributing to solving the longer term production constraints. To be effective, it was important that we understood how the Koreans were farming and with what results. Unfortunately, in North Korea solid information about economic or organizational issues is considered a state secret. Nevertheless, through repeated visits to the same farms, I was able to obtain some basic data and make direct observations that can be combined with information from other sources.
The northern latitude, uncertain rains, and mountainous terrain of North Korea (officially the Democratic People’s Republic of Korea, or DPRK) place serious constraints on food production. Only about 15% of the land area can be farmed to support a population of about 22 million. Historically, the northern part of the Korean peninsula has been a food-deficit region supplied by the rice bowl in the south. With the imposed division of the country in 1945, this arrangement was disrupted. Meanwhile, the late leader of the DPRK, Kim Il Sung, introduced the policy of juche that emphasized self-reliance in all spheres. For agriculture, the goal was to grow enough food to feed the truncated nation, overcoming all obstacles. Consolidating and collectivizing farm production was an essential component of the strategy.
A comprehensive redistribution of land confiscated from Japanese colonial owners and Korean landlords was carried out in 1946, creating a smallholder farming sector. Many landlords fled to the south before the border was completely sealed. During the Korean War (1950-53), the North Korean countryside was devastated by fighting and US air power. Massive dams were bombed, flooding vast areas and destroying infrastructure. As part of its recovery program, North Korea rapidly collectivized the farming sector after the war. Smallholder farms were consolidated step-wise into larger collective units, and the process was completed by 1958 with little apparent resistance or violence. A completely collective farming sector was created with highly centralized planning, a structure that remains essentially unchanged today. Currently there are about 3000 "cooperative farms" (hyopdong nongjang) typically comprising 400-600 hectares and 300-500 households. Approximately 90% of agricultural production takes place on these cooperatives. In addition, there are about 300 state farms in new rice lands created in reclaimed coastal areas or on farms established for intensive production of industrial or specialized crops.
The cooperatives were essentially modeled on the Soviet kolkhoz, but in a traditional peasant setting (similar to parts of China) where village cooperation was a strong tradition. The farms roughly coincide with the boundaries of the old rural administrative unit (ri), and, at least originally, workteams (chagob-ban) reflected village groupings. The smallest work unit is the sub-workteam (punjo) which includes 10-15 families. Income is allocated as a minimum per-capita ration of the harvest plus additional payments based on work points and team incentives. Official policy has been to put agriculture on an industrial footing by integrating it closely into national plans. There is a bottom-top-bottom planning process for setting production targets and allocating inputs. At the local level, the County (kun) Cooperative Farm Management Committee is the key unit, and cooperative farms operate essentially under its guidance.
Under Kim Il Sung’s direct guidance, massive investments were made to modernize and intensify food production through the triple program of irrigation, chemicalization, and mechanization. Priority was placed on self-sufficiency at the cooperative farm level and maximum production of rice and maize, the staple grains. Marginal lands and hillsides were brought under production and coastal areas reclaimed for farmland. The result was a steady increase in yields until they reached some of the highest in the world.
Then something went terribly wrong.
Until the early 1990s, in spite of the constraints, North Korea had been able to grow sufficient food to provide for its population. Yet, from the mid-1980s on, there appears to have been a slow decline in production, probably due to soil depletion from over-intensive cultivation. Then annual production of cereals (rice and maize) plunged from more than 6 million metric tons in 1994 to approximately 2.5 metric tons in 1996, and has remained near this level since (see chart). There are several reasons for this collapse of production (and yields):
The DPRK authorities are open about the catastrophe that struck their farming sector, though officially they focus on natural disasters as the primary cause. When I asked the chairman of one county cooperative farm committee how farm families were affected, he replied: "Those who know how to adjust and cope survive; the others do not." The authorities have responded to the crisis by securing massive amounts of food aid (primarily from China, Japan, South Korea, and the United States), fertilizer aid, and by searching for technical "magic bullets" to increase production. These latter have included mass campaigns to raise goats and other farm animals, to reintroduce barley as a second (spring) crop, and to rapidly expand the planting of potatoes. There has been limited experimentation with micro-credit programs to support these efforts. The DPRK also has entered into a collaborative program with the UNDP to appeal for international assistance for rebuilding the farm input industries and making modest adjustments in cropping systems, though few donors have stepped forward. Finally, there have been local and national campaigns to exhort farmers to even greater efforts.
In spite of these steps to respond to the immediate crisis, there has been no open discussion of policy reforms affecting the organization of the agricultural sector and the command planning system under which it operates. In fact, official policy, proclaimed by Kim Il Sung, remains the gradual conversion of cooperative farms into state farms. Nevertheless, there have been small steps that seem to indicate a degree of flexibility. The minimum size of the sub-workteams appears to have been reduced to 5-10 households, reducing the size of the basic work and accounting unit. In 1998, new guidelines were announced allowing cooperative farms a greater voice in selecting the mix of crops planted on their collective fields. However, the extent to which these policies actually have been followed is unclear. There are unconfirmed recent reports (in the South Korean media) that the government is considering adopting the "family responsibility system," followed by China early in its de-collectivization program. Senior DPRK officials have denied any such change, and foreign agricultural experts based in North Korea report no change on the ground.
In spite of apparent policy rigidity, it is clear that significant changes are taking place at the local level as farmers struggle to survive. These changes appear to be running ahead of policy, and may be generating pressure for official changes:
The impact of these developments under emergency conditions should not be exaggerated. Collective farms in North Korea continue to operate in a rigid command structure, both internally and externally. In fact, the supplying of inputs by international aid agencies and governments has, to some extent, kept the command system alive, since the government controls allocation of the donated inputs. Nevertheless, it is difficult not to conclude that these trends toward local initiative and household survival strategies could prepare the way for more fundamental change. Above the farm level, many local and national cadres responsible for the farm sector, while upholding official policy, give indications that they are ready for change, if only to relieve them of the unrelenting pressure to produce results in a broken system. This attitude could also be considered a factor preparing the way for policy flexibility.
The fragile rapprochement between South and North Korea, initiated by the June 2000 summit, resulted in increased agricultural aid from the South. A large proportion of the fertilizer needed in the North was supplied by South Korea last year and again this year. Technical aid also is being provided through official and unofficial channels. If the North-South opening can be sustained, and the North turns more and more to the South for assistance with food production, we can expect increased, even if subtle, pressure for consideration of policy issues. It may be politically difficult for South Korean President Kim Dae Jung to sustain a program of resource transfer without some indication that systemic obstacles to food production in the North are being addressed.
The international donor community is another source of pressure for change. The World Food Programme’s aid to the DPRK is the largest and longest sustained emergency food aid program in the agency’s history. As time goes on, the agency finds many of its donors less and less willing to bail out North Korea year after year without some indication that long-term policy issues are being addressed. In particular, the EU has pressed the DPRK for realistic agricultural reform as a condition for aid, and these issues have been addressed in the recent diplomatic negotiations leading to normalization of relations between the DPRK and most EU states.
Finally, the DPRK is showing strong interest in availing itself of credit and technical assistance through multilateral agencies and regional banks. Much greater transparency regarding sectoral policies and data, and increasing pressures to allow the play of market forces, will no doubt be conditions for entering into these arrangements.
While the pace of institutional change in the DPRK cannot be confidently predicted, clearly some de facto changes are underway. Yet, there is no relief from the cliff’s edge the country has lived on for the past five years. The 2000 harvest was at least 25% below that of the year before, a serious setback in a tenuous recovery. Under pressure from its closest friend, China, and its new partners by necessity, the EU, South Korea, and the United States, inevitably the time for policy changes, in agriculture and other sectors, will arrive. Changes will come either gradually as the regime moves cautiously under its own power, or rapidly if some dramatic shift takes place. Either way, responsible authorities will sooner or later face the need for some kind of adjustment or transition in the agricultural sector. What will be their basis for decision-making?
As one of the last strictly socialist states, the DPRK can benefit from the experience of other countries that made a transition from collective to more market-responsive forms of agriculture. Admittedly, there are some unique factors in Korea. First and foremost, the DPRK is in a state of chronic and severe food shortage verging on famine. Another factor is the almost total collapse of industry and infrastructure in the North and the need to rebuild every sector of the country simultaneously. It is estimated that GDP fell by half between 1993 and 1996 (see table, p. 8). The evolution of North-South relations is difficult to predict, but it is safe to say that, directly or indirectly, South Korea with its powerhouse economy and advanced technology will play a role in any North Korean agricultural transition. Finally, the deep involvement and investment by the international community in keeping alive the people of the North over the past six years ensures that there will be strong international interest and participation in a transition whenever it happens.
While recognizing these somewhat different conditions, those faced with policy decisions in the North could greatly benefit from the broad range of experience in China, Eastern Europe, Russia, and Vietnam. The experiences are varied with different conditions and cultures, different initial reform steps, and different outcomes, but all eventually faced similar challenges and options. It is important to note that, in all cases, reforms in the agricultural sector were accompanied by introduction of market forces throughout the economy. We can view three (oversimplified) cases as illustrative of the range.
Albania: Abrupt transition from a rigid collective system, similar to North Korea’s, to private peasant farming. Fair allocation of land and resources among collective members was a major issue, and in many areas pre-collective land boundaries were restored. While successful in achieving the political goal of rapid privatization, food production declined sharply in the short term because of disruption of collective support systems, severe fragmentation of landholdings, and distorted markets for inputs and products.
China: Gradual adjustment of the collective farms, beginning with a family-based contract system while the state retained ownership of the land. With higher support prices for major crops, there was an immediate surge in production that later fell off. Issues thrown up by the initial reforms (length of contracts, fragmentation of farm plots, land markets, pricing) pushed the reform agenda ahead until the system has come to resemble private peasant farming in most respects.
Russia: Reorganization of collective farms with the option to maintain collective structures while individual farmers could opt for private farming. Surprisingly, the majority of farms chose to retain collective organization with some adjustments. Farmers who opted out encountered serious problems with obtaining inputs and other services, and faced fluctuating prices for inputs and products. Overall production fell sharply throughout the sector due largely to reduced demand, falling product prices, and rising input prices.
It is up to the DPRK authorities and, ideally, the farmers themselves to draw lessons from these and other experiences. Also, a full recovery of a sustainable level of food production in North Korea will require changes throughout the economy, especially recovery of the industrial sector that supplies farm inputs.
Nevertheless, I might suggest a few guiding principles and hazard some suggestions.
With these guidelines in mind, I would suggest that the initial steps to reform the present system be along the following lines:
Such changes have a good chance of increasing output by strengthening labor incentives, creating price responsiveness, intensifying farming efforts and allowing cropping decisions to be made closer to the farm level. Even these relatively modest steps, however, will raise issues faced in other transitions, including the formula for allocating parcels to families and teams, division of farm tools and equipment, contract transfers or marketing, and labor mobility. With the level of control exercised by the DPRK authorities, they may be able to hold at this level for some time, but in the long run, as in China and elsewhere, even such modest changes are likely to create imbalances and pressures for further change.
It will be a long-term project for the DPRK to achieve sufficient levels of sustainable food production. One advantage it has is the varied and mixed experience of other socialist and former socialist states. This experience suggests that, while there is no simple recipe, it is possible to anticipate the challenges and options that confront a country when it begins to introduce market forces into agriculture. The pressures for policy change in North Korea are mounting, but the most important reason to consider new approaches is the continuing hunger felt by millions of Koreans.
Bloch, Peter C. 1998. "Picking up the Pieces: Consolidation of Albania’s Radical Land Reform." In Land Reform in the Former Soviet Union and Eastern Europe, edited by Stephen K. Wegren, pp. 189-207. London and New York: Routledge.
Chung, Sang-hoon Joseph. 1974. The North Korean Economy: Structure and Development. Stanford: Hoover Institution Press.
Huang Zinghe. 1995. "Land Policy in Rural China in Retrospect, and New Problems." In Transition of China’s Rural Land System: Papers from International Symposium on Rural Land Issues in China, (October 8-10, 1992, Beijing), LTC Paper 151. Madison: Land Tenure Center.
Lerman, Zvi. 1999. "Status of Land Reform and Farm Restructuring in Central and Eastern Europe: A Regional Overview." In Structural Change in the Farming Sectors of Central and Eastern Europe, edited by Csaba Csaki and Zvi Lerman. Second EU Accession Workshop in the Rural Sector, Warsaw, Poland, 27-29 June 1999. World Bank Technical Paper No. 465.
McMillan, John and Barry Naughton, editors. 1996. Reforming Asian Socialism: The Growth of Market Institutions. Ann Arbor: University of Michigan Press.
Moon, Pal-Yong. 1995. "Rural Economic System." In Economic Systems in South and North Korea: The Agenda for Economic Integration, edited by Lee-Jay Cho and Yoon Hyung Kim. Seoul: Korea Development Institute.
Oh, Kongdan and Ralph C. Hassig. 2000. North Korea: Through the Looking Glass. Washington: The Brookings Institution Press.
"Thematic Roundtable on Agricultural Recovery and Environmental Protection in DPR Korea." Background document prepared by a team of experts from FAO, UNDP, and the Government of the DPRK for a meeting held in Geneva, 28-29 May 1998.
Wegren, Stephen K. 1998. "The Conduct and Impact of Land Reform in Russia." In Land Reform in the Former Soviet Union and Eastern Europe, edited by Stephen K. Wegren, pp. 3-34. London and New York: Routledge.
Dr. Reed is Associate Director at the Center for East Asian Studies, University of Wisconsin-Madison, where he also received his Ph.D. in Development Studies. He has extensive experience in North Korea, including traveling there as a regional representative of the American Friends Service Committee, and later as the head of World Vision International’s emergency relief program for North Korea. For the past three years he managed a multimillion dollar food and agricultural aid program to North Korea.
Copyright © 2001 by Land Tenure Center and Board of Regents, University of Wisconsin. All rights reserved.
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