North Korean agricultural officials are scrambling to secure funding for farming supplies as the growing season gets into full swing. However, wealthy North Koreans who traditionally provided loans for agricultural supplies have become reluctant to open their wallets due to the recent frequent turnover of farm officials.
According to a Daily NK source in North Pyongan province recently, farms are trying to arrange “pre-transactions” – a system where farm officials borrow money in spring for essential agricultural supplies like fertilizer, seeds, and fuel, then repay the loans in autumn with a portion of the harvest. This year, however, these deals have become increasingly difficult to finalize.
Wealthy North Koreans – known as “donju” – have historically provided most agricultural loans, but the recent pattern of farm officials being replaced has led to financial losses, making donju hesitant to invest.
“In the past, money lenders would make deals with work team leaders or sub-work team heads, but this year, people are avoiding lending to farms,” the source explained. “To make a deal, you need basic confidence that farm officials will remain in their positions until autumn, but with officials frequently facing punishment, nobody is willing to take the risk.”
Earlier this year, North Korean authorities intensified inspections and crackdowns on farm officials after publicly condemning corruption within the agricultural inspection agency of Usi county in Jagang province – a case they labeled a “mega-crime.” Since then, many farm officials have been replaced, causing donju who previously financed agricultural supplies to withhold funding.
Lower-ranking farm officials tasked with securing loans for necessary agricultural supplies and special food to boost farmer morale have attempted to persuade donju with whom they previously conducted pre-transactions, but these efforts have proven largely unsuccessful.
Farm officials and donju typically formalize pre-transactions by documenting the loan amount and dates, as well as the type and quantity of grain to be repaid after harvest. However, since these agreements lack legal enforcement, donju essentially provide loans based solely on trust.
“If donju lend money based on a work team or sub-work team leader’s promise to repay with food at harvest, and that official is later fired or punished, the lender has no recourse,” the source said. “The state has put officials in a precarious position, so nobody wants to lend them money.”
There’s little appetite for financing agricultural supplies as North Korean authorities continue disciplining farm officials, the source added. Even when donju do provide loans to farm officials, they limit the amounts as much as possible.
“In cases where donju have provided even minimal funding, it’s only because officials have proven their reliability over several years,” the source explained. “They refuse to lend any money to newly appointed officials with whom they haven’t established trust.”
Farmers blame the government for this predicament.
“Farmers hold the state responsible for this situation,” the source said. “They complain that even when they follow the party’s directive to be ‘self-reliant’ by doing whatever they can to secure what they lack, the state doesn’t support them, making self-reliance impossible.”
