Growth Prospects and the Potential for Progress in the DPRK’s Agricultural Sector: Infrastructure and Incentives

By | June 23, 2013 | No Comments

morrison-dprk-with-friends-sino-nk

Since originally working together on canal realignment to reduce the need for electric pumping, Tom Morrison and his counterpart from the DPRK Ministry of Agriculture, Kim Chol-hun (right), have collaborated on several projects, most recently on Conservation Agriculture. Li Hak-chol (left) is an Irrigation Engineer. | Image: Tom Morrison

Tom Morrison is as authoritative a voice as we are likely to find to claim that the DPRK’s food shortages are not due to the lack of arable land. The labour-saving and resource-saving Conservation Agriculture approach to agricultural development, now adopted by the DPRK Ministry of Agriculture, seems to offer all the benefits which might be associated with a “Chinese” model of economic reform, where yields may increase even whilst labour requirements fall, supporting further development elsewhere in the economy. Yet Morrison’s judgement indicates that much work is to be done. One example he points to is in 2012, when bad weather prevented the DPRK from achieving food self-sufficiency, despite huge labour efforts and agricultural inputs. Morrison is clear that greater progress depends partly on more supply of economic inputs, including imported fuels such as diesel—an import which is subject to Western embargoes.

In addition to Conservative Agriculture, the other component of agricultural reform most emphasized by Morrison is structural reforms. Structural reforms means improving the incentives for improved performance by focusing on the reducing the size of farming collectives into smaller working groups, such as quasi-family units or sub-work groups (as under China’s reforms), and allowing farmers to keep more of their produce to sell at commercial market prices. Though high barriers exist, growth based on agricultural reform now seems much more possible than a model based on foreign investment and rapid price liberalization.

Given the lack of faith in the domestic currency and in the absence of conventional deposit-account banking, monetary tools to control the inflation resulting from an East European-type widespread price liberalization have no mechanism of transmission—i.e., there will be no “big bang” in North Korea. Therefore, in the medium term, increases in the supply of core necessities through alternative reform plan, such as Conservation Agriculture, may be the only way to promote macroeconomic and social stability to support relative economic liberalization.

In final installment of a three-part interview (part one; part two), Tom Morrison discusses the prospects of food self-sufficiency in North Korea with a focus on agricultural reforms and the geography of rice and potato production. – Matthew Bates, Sino-NK Economics and Trade Analyst

Growth Prospects and the Potential for Progress in the DPRK’s Agricultural Sector: Infrastructure and Incentives

by Matthew Bates

Matthew Bates [MB]: In a recent interview with the BBC, you mentioned how even if agricultural reforms provide necessary incentives to motivate farmers, markets are often not adequately established to allow farmers to acquire the fertilizer and other inputs they would need to achieve consistent growth in production. How widespread is this problem? Do you see a role for foreign assistance here? 

Tom Morrison [TM]: Value chains and private supply chains take time to establish. They seem to be growing slowly because government policy is still vague, though demand is building. It’s a widespread problem. It’s difficult to see a role for foreign assistance, because it’s something that the more naïve aid agencies have been offering for years and the Koreans have their pride. It’s something that the Koreans should and can develop themselves. If there is a role for aid agencies, then that would be in delivering the physical infrastructure for such value and supply chains.

MB: The introduction of the notion that farmers retain a certain percentage of what they produce could conceivably lead to a system where farming teams are able to retain a portion of however much they are able to produce, making incentives more robust. But how easy would it be for the government to ascertain the actual amount produced by farmers?

TM: This is well established and clear, as one would expect in a country that measures and controls everything. And where the culture dictates that the collective benefit is set above that of an individual, and was set out in detail by me in the 2008 Crop and Food Security Assessment Mission (CFSAM). But I was impressed with the system, and was left in no doubt that it worked well and fairly in practice. Generally speaking, agrarian societies the world over have sophisticated ways of measuring crop yields and the value of non-monetary inputs. This system has occasionally been abused on both sides, during the Stalinist era in Russia for instance, but there were repercussions for the abuse.

MB: In the agricultural reforms of China in the late 1970s some of the most northerly provinces, such as Heilongjiang, elected to retain greater collectivization on the basis that the hard, dry quality of soil demanded the more heavily mechanized production processes of larger groups.  Does this represent a recognized argument amongst modern agriculturists? If so, might it have any potential applicability to the DPRK today, in North Hamgyong province for example?

TM: I don’t know the answer to this one. There are strong arguments on both sides. The Heilongjiang argument was put forward before Albania turned its back on communism, but at independence each rural household re-established its old field boundaries within hours, and even took “their” bricks out of the communal buildings. In the DPRK I suspect this won’t happen. Cooperative farm managers are usually genuinely elected, or at least seem to be, and on the whole of the Korean peninsula respect for the commonly owned institution, whether that is the chaebol conglomerates in the ROK or the cooperative farm in DPRK, takes precedence over individual farm households.

Incidentally, “hard dry soil” sounds to me like a civil servant’s argumentsomething nebulous and easy to cite because no one is responsible for it. Lack of bank finance for small farmers to buy or rent farm machinery would be a more realistic reason.

Until recently I was Non-Executive Director on the Board of a 74,000 hectare Ukrainian farming company. We paid monthly rents to a large number of small land owners so that we could cultivate their land consolidated into large fields using very big farm machinery. This provided optimum returns for the company and for the smallholders. It illustrates that, theoretically, there can be a hair’s breadth between farming under capitalism and under communism. But practically, only the capitalist model works in my view. This model is now common in Russia and Kazakhstan, as well as Ukraine. The army has similar scale operations in the DPRK.

I’ve referred above to the nationwide programme of field consolidation during the last decade. Officially it is to improve the efficiency of farm machinery operation, though more probably it was to erase old and formerly individually held farm boundaries. But the Japanese colonial archives probably have the old records. There is no doubt that there is huge (though of course never articulated) pressure from individual farm households to increase their 30 pyeong (about 100m²) private garden plots. Only naïve newcomers in the international aid community try to raise this point for discussion with the authorities who keep it firmly off the agenda. Under a freer rural economy there would probably be a readjustment of the balance between collective farms and private plots.

MB: James Lewis, University Lecturer in traditional Korean history at Oxford, told me that in traditional Korea the northern dry soil was used to grow soy beans, such as millet, potatoes and vegetables, whilst the wet paddy fields in southern Korea acted as the country’s rice basket. With this range of climates, Korea, China, and Japan were all apparently able to become successfully autarkic, as far as food production was concerned, and Seoul’s geographical position as a point for exchange between north and south is one key reason it became the historic capital of Korea.

This account would give a broad context to the low rice yields you describe, and also suggests a scenario in which the DPRK might become an exporter of potatoes and vegetables without being self-sufficient in rice. Is there a significant difference between the prospects for the country reaching the aggregate food production target required for food self-sufficiency and the prospects for it being self-sufficient in rice? Or does Conservation Agriculture sufficiently alleviate such soil issues, making this much less of an issue?

TM: Yes, I suppose that historically a capital city would have been established near the rice bowls of the peninsula, and in DPRK now the two main rice bowls are close to Pyongyang. Rice has a mystical and cultural quality for the Koreans. Potato on the other hand produces more calories per unit area than any other crop but is regarded as modern. It is fast becoming very popular. Yes, the DPRK could quite logically have a deficit of rice and a surplus of potato. The northern dry soil and southern wet soil concept is a bit simplistic. In the North they would love to grow rice and do wherever they can, but on the whole they can’t. Rainfed potato is more suited. In the south potato is grown in the upland areas more and more. Each farm has its paddy land (rice) and its upland (maize and early potato). I could go on. Are you enlightened or more confused now?

MB: Just to make sure that I understand, is it that, whilst you are not completely dismissive of the northern dry soil/southern wet soil concept for rice growing, the reason you are saying that it could be too simplistic is that overemphasizing the broader northern versus southern climate distinction overlooks the importance of the local geography (upland versus lowland) as a reason for the dryness or wetness of soil?

TM: I’ve got all the rainfall records somewhere, but from what I remember the rainfall in the north is more or less the same as in the south. But the north is more hilly, and they don’t have the large areas of flat land suitable for developing paddy fields. So they grow rainfed crops such as potato and wheat. This could loosely be described as dry soil. In the south there are several areas of flat land that are suitable for developing paddy fields. All paddy fields are of course irrigated and to control weeds the soil is puddled, i.e. made a bit like thick soup. This can be described as wet soil, I suppose. Next to the southern paddy areas, on each farm, there is also the upland which is also generally rainfed, not irrigated. This soil is just as dry as the northern upland areas. Here mainly maize is grown, also some early crop potatoes before the maize on the same ground. In the north there is less maize and more potatoes, but the potatoes are main crop, not early crop, so they occupy the ground for the whole of the growing season, as does maize. In the south, as I said, maize follows potatoes on the same ground.

Further links

On Conservation Agriculture: UN Food and Agriculture Organisation

FAO/WFP Crop and Food Security Assessment Missions to the DPRK: 200320042008201020112012

Randall Ireson (coordinator of the American Friends Service Committee agricultural development program in the DPRK between 1998 and 2007): Food Security in North Korea: Designing Realistic PossibilitiesWhy North Korea Could Feed Itself

Further Readings

Matthew Bates, “Growth Prospects: Tom Morrison on the Potential for Progress in the DPRK’s Agricultural Sector: Prospects and Achievements,”  Sino-NK, June 16, 2013.

Matthew Bates, “Prospects for Food Self-Sufficiency in the DPRK: Interview with Tom Morrison,” Sino-NK, June 1, 2013.

Christopher Green, “6.28 Back on the Docket?: Economic ‘Improvement’ Hints Return,” Sino-NK, May 13, 2013.

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