North Korea recently issued an order calling on enterprises that provide their own food to do so at “state-set prices,” Daily NK has learned.
The authorities have reportedly begun monitoring compliance with the directive as well.
A Daily NK source in North Korea said Wednesday that the Cabinet’s non-permanent economic development committee issued a joint order with the State Planning Commission calling on “units that autonomously supply food to their employees” to sell food “only at prices determined by the state.”
The order also warned that the authorities will “strictly supervise” implementation of the directive.
According to the source, the joint order says that enterprises may never provide food to their employees “at prices lower than the seasonal food shop prices set by the commercial department of the local people’s committee.”
The joint order issued by the non-permanent economic development committee — basically a task force-level group for economic matters — and the State Planning Commission applies to workplaces that have been supplying their own food since the 1990s.
It does not apply to specific party, government and military workplaces that receive all their food from the state.
Since North Korea’s state distribution system collapsed with the Arduous March of the 1990s, North Korean enterprises have been supplying food to their employees on their own, whether its by earning foreign currency through engaging in production outside state planning, or by allowing their employees to engage in unofficial economic activity outside of their official workplace in return for payments to the company, a practice called “Aug. 3 earnings.”
The authorities previously took no issue with enterprises that practiced so-called “self-sufficiency” setting their own prices, but now they are applying the brakes to stop companies from providing food at prices lower than the ones set by the state, said the source.
“According to the joint order, from Jan. 1, workplaces that supply food to their employees on their own will be unable to set their own prices,” he told Daily NK.
Moreover, the Cabinet reportedly said in the joint order that it will strictly supervise — through local people’s committees — food supply preparations, requirement fulfillment, supply systems, reporting systems and other activities by enterprises to provide food to their workers.
The source said the Cabinet is stressing that supervision efforts to implement the joint order aim to “normalize” the state pricing system and “rectify” the extreme price “chaos” caused by enterprises and units acting on their own.
However, some North Koreans are reportedly saying that while the principle of state prices might be good, “workplaces must be able to adjust their supply prices to match their own food supply and demand.”
“People don’t like it,” said the source. “They say it wasn’t so long ago that we had to make do on our own, and ask why the state is now getting involved with setting the price of the grain we have been purchasing from farms or with foreign currency. They say the enterprises purchase the food, so if the state tells them to follow the prices it sets, the only people who will get hurt are the employees.”
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