International focus has turned to North Korea’s ongoing food crisis. The UN’s World Food Program (WFP) and Food and Agriculture Organization (FAO) recently published a report stating that North Korea is suffering its worst food shortages in a decade and urgently calls for aid from the international community. Droughts and other natural disasters led to a massive fall in North Korea’s crop yields last year, and around 10.1 million people (around 40% of the population) reportedly need food aid.
Some North Koreans who experienced the widespread food shortages that occurred in the mid- to late 1990s, however, say that while the current situation is difficult, the country will not face the mass starvation it saw in the past. The reasons cited include the fact that much of the population has found ways to survive through trade and reliance on the local markets, referred to by many as the country’s “marketization.”
Rice Available at Local Markets, No Mass Starvation Reported
Daily NK sources have not reported any signs of mass starvation in the country. Sources have also reported that grains continue to be available for sale in the local markets.
Most areas of the country have witnessed falls in grain production, but locals are making ends meet by eating smaller meals and buying relatively cheaper mixed grains instead.
From late last year, some areas of Ryanggang Province saw a rise in demand for barley rice, a cheaper alternative to white rice that costs 1,500 KPW per kilogram. North Koreans are generally avoiding the purchase of ready-to-eat foods and cutting down on meat consumption.
However, the continuing stagnation of the North Korean economy requires attention. Daily NK sources report that consumer activity in the markets is declining and businesses that rely on the markets are suffering as a result. Some farmers are facing starvation and there has been a rise in the number of families who cannot afford to buy food.
Rice Prices Remain Stable Despite Reports of Mass Food Crisis
The price of rice in North Korea has declined to some extent, but has largely remained stable at around 4,000 to 5,000 KPW per kilogram. This price stability suggests that supply and demand remain relatively steady.
In the past, rice prices skyrocketed whenever the North Korean authorities launched crackdowns on the country’s official markets.
Rice prices spiked again when the the authorities temporarily banned the sale of rice in the general markets, causing the price to rise from around 900 KPW per kilogram in September 2005 to 4,500 KPW in April 2006.
Rice prices are also impacted by the wider international community. Prices spiked again in 2009 after North Korea conducted a second nuclear test, as wholesalers in the country predicted that the international community would respond with sanctions. Many wholesalers refused to sell their rice to small-scale merchants due to speculation that once sanctions came into effect, humanitarian aid (including rice) would no longer enter the country.
The spread of marketization has changed the situation on the ground. The market is becoming more resilient to North Korean state policies and international factors. Residents can now buy rice from individual re-sellers even when the markets close due to state holidays like Kim Il Sung’s birthday or the country’s “planting battles [campaigns].” Grasshopper merchants (street-side merchants) actively continue with business activities with the tacit acknowledgement of local market officials.
Grains are not listed under international sanctions, so the North Korean state can import more grain into the country freely.
The regime is also reacting sensitively to changes in rice prices. The authorities will sometimes order trading companies with trading permits to import rice and other grains first, and then put price ceilings in place.
Earlier this year, the No. 2 Rice Storage Facility (designated for military consumption) released rice into the general market, indicating that the authorities are actively taking measures to prevent fluctuations in the rice price.
Some observers note that the wider impact of market prices must be closely analyzed to better understand North Korea’s civilian economy. The realities of North Korea’s food crisis can therefore be better understood in the context of rice prices and other indicators that drive market trends.