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Famine Looming in N.Korea as Grain Prices Soar 250%

Posted May. 10, 2008 03:01,   


The price of grain has spiraled upwards in North Korean markets. Though the price hike was temporarily suspended this month, a growing number of critics say that skyrocketing grain prices are a prelude to another potential mass starvation. In a press conference held in Washington on Thursday, Ven. Beopryun, head of Good Friends, an aid organization for North Korean refugees, argued that the international community should immediately send food aid to the Stalinist regime as some 200,000 to 300,000 North Koreans might die of starvation in May and June. However, many people disagree with Beopryun’s claim, saying the figure is exaggerated. In spring 2008, we take a glimpse into the food shortage crisis of North Korea with the help of sources well informed of the present situation in North Korea.

▽ Soaring Rice Prices

The prices of rice and corn, respectively, jumped to 3,100 won and 1,500 won, respectively, in some areas, such as Hamheung and Wonsan in the North at the end of last month, according to sources.

The prices of rice and corn in the same areas were each around 1,200 won and 600 won on March 20. In other words, the prices of major crops increased 2.5 times in a matter of a month. Grain prices have risen in a much faster manner in the communist regime in comparison to those of the international grain market, which saw an annual price increase of some 200 to 300 percent in 2007.

In a telephone interview with the Dong-A Ilbo on Tuesday, an informed source said, “The price of rice started to skyrocket in early April. But the prices of rice and corn have been curbed to about 2,200 to 2,300 won and 1,200 and 1,300 won, respectively, because of recent rumors of foreign aid and the state’s strict regulations.”

Experts say that North Korea`s grain price hike can be attributed to a decrease in domestic grain production due to last year’s flooding and Seoul’s suspension of food aid after Pyongyang’s nuclear tests.

▽ Rising Grain Prices Threatens Livelihood of North Koreans

North Koreans heavily depend on the food staple as a source of nutrition. Thus, grain consumption of each family is very high. A family of four needs at least 60 kilograms of grain a month. That’s equivalent to 720 kilograms a year.

Assuming the price of corn is 1,200 won per kilogram, the family has to spend 864,000 won to eat if they eat nothing else but corn. Given that the North Korean won-dollar exchange rate is now about 3,500 won per dollar, it costs about 247 dollars. If the cost of fuel, side dishes, and other necessities are calculated, a family of four will need at least 400 to 500 dollars a year.

It is difficult to estimate North Korea’s national per capita income. Nonetheless, former South Korean Unification Minister Lee Jae-joung said in March, “The Unification Ministry asked a group of experts to calculate the North’s per capita gross national income (GNI) in 2005. According to their estimate, it was between 368 and 389 dollars.” If the calculation is correct, the GNI for a family of four is 1,500 dollars. Thus, they may have no major problems making ends meet. However, considering that the GNI an entire four-person North Korean family is lower than the average per capita GNI in most countries, a significant portion of North Korean people face the threat of starvation.

▽ Truth Behind Reports of Death by Starvation

In its newsletter on Tuesday, Good Friends claimed that some of the children and elderly in some farming villages in Hwanghae Province were dying due to malnourishment. In a commentary, the relief organization also urged the South Korean government provide assistance to Pyongyang now before a typhoon of starvation sweeps the North.

On the other hand, some experts on North Korean affairs, such as Seo Jae-jin, a chief researcher at the state-run Korea Institute for National Unification, and Dong Yong-seung, head of the Economic Security Team at the Samsung Economic Research Institute, said that the possibility of mass starvation in the North is slim as the North now has markets, which are run under the principle of supply and demand.

“Mass starvation occurred in mid-1990s because the markets did not have the strength to stand on their own because the government’s ability to meet the demand was paralyzed. However, the situation is different now,” said Dong.

“People who can afford to purchase grain at markets might be the exception. However, if grain prices continue to rise, mass starvation will begin to occur beginning around next April,” said an informed source.

“Even if grain prices rise and household expenses are greater than incomes, they will be able to put up with it until next spring, though they may need to sell electronic appliances and eventually their homes,” the source explained.

“People who cannot engage in economic activities, such as children at childcare centers, the elderly and patients in hospitals, face the danger. The next victims will be farmers who are not actively engaged in market activities and whose homes cannot be sold even if they want to,” said the source.