North Korea farmers to test regime appetite for reform

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Bountiful cucumbers, tomatoes and oranges grown in tiny backyard gardens kept private farmers’ markets in business in the Soviet Union and served as a constant reminder that, by contrast, massive state-run farming collectives were pitifully inefficient.

In China, agricultural reforms were the crucial kick-start to the communist giant’s three-decade transition from a centrally planned economy to one driven by market forces. And unlike their cohorts in Moscow, the Chinese leadership managed the rural revolution without losing its grip on political power.

North Korea’s communist leadership is now reported by recent visitors to be experimenting with smaller-sized farming cooperatives and incentives for expanding food production by letting farmers keep and sell more of what they grow.

The dilemma faced by the Pyongyang regime, say academics who scrutinize the hermetic state, is whether opening the agricultural sector will rescue the economy, as it did in China, or whet North Koreans’ appetite for more opportunity and political choice, thereby bringing down one-party rule, as it did in the Soviet Union.

No proclamations of radical change to combat persistent food shortages came out of Tuesday’s session of the Supreme People’s Assembly, a rubber-stamp parliament of 687 deputies all aligned with new leader Kim Jong Un. But veteran Korea watchers say they wouldn’t expect a dramatic gesture.

‘They can do that without trumpeting it,’ Stephan Haggard, director of the Korea-Pacific Institute at UC San Diego, said of the market reforms quietly introduced this summer at local and regional cooperative meetings. ‘That comports with the style I would expect to see, that the leadership is not going to stand up and make bold pronouncements that they’re moving in a new direction.’

Significant among the changes that will apply to next month’s harvest, Haggard said, is the government’s revised formula for splitting crops between growers and the state. Farmers previously kept a small share of their output for their own consumption and delivered the rest to the government for distribution to the cities, but they now will be able to keep -- and presumably sell at market prices -- all produce in excess of an upfront quota for the state.

‘The idea is that farmers are then incentivized to put in additional work to produce more, if they believe the quota will hold,’ Haggard said. ‘One thing we worry about is if they have shortages, the regime might be tempted to walk in and say that they can’t have hunger in the military and will seize what they need.’

There is also uncertainty over how willing the regime is to let the market determine food prices, as the government also talks of imposing price controls to rein in inflation, said Charles Armstrong, director of the Center for Korean Research at Columbia University.

Armstrong has been tracking what he calls a ‘bottom-up market reform’ since the 1990s and sees significant parts of the economy now operating outside state control. Black markets flourish for scarce consumer goods smuggled in from China. Barter is a common means of commerce, independent of the won’s fluctuating value. Underpaid professionals and craftsmen surreptitiously peddle their talents to monied elites in the capital and other major cities, Armstrong said.

Although Kim’s leadership would want to prevent the rise of an entrepreneurial class that could challenge its monopoly on political power, Armstrong said, he still sees the most promising signs in more than a decade that the regime is eager to redirect investment from military to civilian pursuits.

Since he assumed power nine months ago, Kim has altered the image of the leadership with more speeches and public appearances than his father, Kim Jong Il, made in 18 years as leader. He has weeded out some of the stodgier generals in the military hierarchy and promoted younger officers to positions of power, analysts note. And he is the first in the Kim dynasty, installed by his grandfather Kim Il Sung at the nation’s founding, to introduce Western entertainment and attend performances with his fashionably dressed wife.

Victor Cha, head of Korean scholarship at the Center for Strategic and International Studies, heralds the signals of change as ‘encouraging’ but adds that reform has been attempted in the past only to be rescinded later.

‘The dilemma for them is that real reform means loosening political controls and allowing opening, which a young, leadership-in-transition, is afraid to do,’ Cha said of Kim Jong Un.

The young leader’s father introduced modest agricultural reforms in 2002 but revoked them three years later, reverting to an isolationist posture amid condemnation of North Korea’s nuclear aspirations. He again embraced a quixotic policy of food self-sufficiency, refusing foreign humanitarian aid despite persistent malnutrition, the country’s dearth of arable land and vulnerability to floods and mudslides.

Cha applauds the latest reform measures, not because he thinks they herald the kind of charismatic top-down transformation executed by China’s Deng Xiaoping, ‘but because each time they allow for some economic incentivization in the market, they pull it back again at their own peril.’

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