URGENT WORLD PROGRAM REPORT ON CURRENT FOOD CRISIS IN NORTH KOREA

FULL TEXT:


 part 1 of 2


                                            For official use only
     Released 13 May 1996

                       S P E C I A L     A L E R T

                                 NO.267


      (Circulated only for countries where foodcrops
     or supply situation conditions give rise to concern)

     Issued by:

     FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS, ROME
     WORLD FOOD PROGRAMME, ROME


     COUNTRY: DEMOCRATIC  PEOPLE'S REPUBLIC OF KOREA


     OVERVIEW

     A recent on-the-spot review by FAO and WFP, has found that since the
     joint Crop and Food Supply Assessment Mission in December 1995, the
     food supply situation has deteriorated more seriously than had been
     anticipated. The mission had identified a substantial food deficit,
     most of which has remained uncovered so far. The Government has not
     been able to import food commercially, due to economic difficulties,
     and the level of food assistance provided to date has only covered a
     very small part of the deficit. The situation is likely to become
     considerably worse in the lean months between May and September, as
     most of  last year's harvest has been consumed, stocks are critically
     low, significant commercial imports are unlikely and there is
     virtually no further food assistance in the pipeline.

     Together these factors have led to widespread shortages in large
     parts of the country and brought the Public Distribution System (PDS)
     under considerable strain. In recognition of mounting difficulties,
     the Government has had to implement various measures to reduce
     overall consumption, including a reduction in food rations and the
     use of cereals in feed and industrial use. There is an urgent need to
     mobilise food imports, in the absence of which the consequences are
     likely to be devastating for large segments of the population,
     especially those that are already vulnerable.

     Preliminary findings of a food and nutritional assessment in
     March/April this year by WFP indicated that to date young children
     attending nurseries and kindergartens have been  protected from food
     shortages. However,  without adequate food assistance, the present
     nutritional situation of the population can only be expected to
     decline. Private, small plot cultivation will enable some communities
     to compensate partly for reductions in government food allocation and
     ensure minimum dietary intake. However, those living in mountainous
     areas or urban centres have limited or no access to such land and may,
     therefore, face more serious shortages. The micronutrient status of
     the population is also a cause for some concern, although this cannot
     be confirmed with data on prevalence rates. Vitamin D, the B group and
     C are thought to be the most inadequate.

     Early prospects for the 1996 grain crops, now being planted, are
     unfavourable. Preparations for planting have been delayed by about 2-3
     weeks due to cold weather and inadequate fuel supplies. The delay in
     planting alone could result in up to 10 percent reduction in yields
     this year. The agriculture sector also continues to face serious
     problems of input supply, principally fertiliser, the manufacture or
     import of which has been severely constrained by a shortage of foreign
     exchange. This, as in the past several years, will reinforce a
     persistent downward trend in food production in the country. In
     addition a substantial part, some 40 000 hectares, of the area
     affected by the floods last year still remains under sand and debris,
     effectively ruling out cultivation in these areas in 1996. Food supply
     difficulties could, therefore, continue well into 1997.

     FOOD SUPPLY SITUATION

     The Public Distribution System (PDS) is the mechanism under which the
     state aims to supply  the majority of the population with basic
     consumption needs, including rice/maize, cooking oil, cabbage, meat,
     fish and eggs. Food items are rationed and sold to the public at
     highly subsidised rates. Cereal rations for collective farm workers
     are distributed on-farm annually, immediately following the harvest.

     Presently, out of the total population of some 22 million, it is
     estimated that about 13.5 million or 62 percent of the population are
     eligible to receive subsidised food rations through the PDS
     throughout the year. In addition, some 3 million workers and
     dependants on state farms are entitled to subsidised rations for 6
     months. This leaves a population of roughly 5 million on collective
     farms, who receive no subsidised rations whatsoever and have to
     depend on a quota from the harvest for their annual need. However, as
     a result of the 1995 floods and food shortages, collective farmers
     were only allocated some 100 kgs, for the period up to the next
     harvest in October 1996, compared to an average of 200 kgs in normal
     years. The allocation therefore was halved and translates to a daily
     per caput availability of 250 grams of food grain, well below
     consumption needs. In view of the food shortages, substantial
     reductions in PDS rations were introduced in April.

     It is becoming increasingly evident that the entire public
     distribution system is coming under considerable strain, due to a
     combination of factors, including declining food production, the
     disruption of trade, a progressive drawdown of national cereal stocks
     and cessation in early 1995 of grain imports from China, estimated at
     between 700 000 to 1 million tons annually in the period 1992 to
     1995. As this quantum of imports represented a substantial proportion
     of  cereal requirement  in Korea DPR, cessation has had devastating
     effects on grain supply. Indeed even before the floods in July/August
     last year, Korea DPR approached several countries for assistance and
     received some 450 000 tons of rice through bilateral channels partly
     as grant and partly on concessional terms, to meet requirements for
     1994/95.

     The serious problems of  the PDS were further exacerbated by the 1995
     floods, which resulted in substantial losses to standing crops and
     stored food.

     Although, no specific data on stock holding and off-take through the
     PDS is available, the Government estimates that present levels for
     the period April to October can only provide some 25 percent of
     normal requirements. It also indicated that off-take from the PDS
     had been lowered from 240 000 tons/month to 170 000 tons.

     Farm families on collective farms, made homeless after the floods in
     North Pyongan, North Hwanghae and Chagang provinces, have been the
     main recipients of food aid. To date some 33 000 tons have been
     delivered, including 28 529 tons of rice, 2 269 tons of CSB, 1 756
     tons of wheat flour and 270 tons of miscellaneous food items, mainly
     maize meal and soybean.

     For the 1995/96 marketing year (November/October), the total cereal
     import requirement was calculated at 1.91 million tons, by the
     FAO/WFP Crop and Food Supply Assessment Mission in December last
     year. At that time it was envisaged that the Government would be in a
     position to import some 700 000 tons commercially. However, apart
     from concessional imports amounting to 200 000 tons from Japan, 40
     000 tons from Syria, 8 000 tons from Switzerland and an expected 5
     000 tons from Pakistan, it has been unable to secure further imports.
     This is in spite of negotiations with several countries notably
     Thailand, China, India, Poland, Romania, Canada and the USA.

     Under the circumstances, widespread shortages have occurred and there
     are reports of emerging and growing informal cross boarder trade with
     China, in which various products, such as lumber, scrap metal and
     shellfish are being bartered for wheat flour. For the remainder of
     1995/96 marketing year, therefore, it is assumed that although the
     country can only make very limited imports of food commercially, some
     will flow-in as cross border (barter) imports. The combined amount of
     these imports is estimated at 150 000 tons of grain. Further, as a
     process of adjustment the Government has also begun reducing the
     number of livestock, which are intensively fed on grain, to enable
     cereals to be diverted for food use. It is estimated that feed use has
     decreased by 25 percent and the use of cereals for other purposes by a
     further 10 percent. No adjustment has been made to overall food use as
     the reduced rations FAO/WFP reported last year are already felt to be
     the minimum required. Based on these assumptions, the FAO/WFP estimate
     of 1995 production and the quantity of emergency and programme food
     aid received so far,  leaves an overall shortfall of some 1.04 million
     tons. (See below)

         part 2 of 2  (part 1 in previous message)

     Released 13 May 1996

     SPECIAL ALERT NO.267  - COUNTRY: DEMOCRATIC  PEOPLE'S REPUBLIC OF
     KOREA

     Issued by:
     FOOD AND AGRICULTURE ORGANIZATION OF THE UNITED NATIONS, ROME
     WORLD FOOD PROGRAMME, ROME


     FOOD SUPPLY SITUATION, cont'd

     1995/96 Cereal Balance Sheet ('000 tons)

     __________________________________________________

     Total Availability                  4 077
     1995 Production                            4 077
     Stock Draw-down                              -
     ___________________________________________________

     Total Utilisation                   5 548
     Food Use 1/                                3 688
     Feed Use                                   1 050
     Other Use                                    810
     ___________________________________________________

     1996 Import Requirement             1 471
     Commercial Imports 2/                        150
     Emergency and Programme Food Aid
       Received and pledged 3/                    284
     Uncovered import Requirement               1 037
     of which:
      - Emergency food aid                         34
      - Project food aid                           25
      - Programme food aid                        978
     ____________________________________________________

     Notes:
     1/   On minimum required rations
     2/  Commercial imports includes cross border trade
     3/  Does not include CSB.


     As there are no further pledges in the pipeline from May onwards, the
     food supply situation is becoming increasingly desperate. The
     Government has already reduced food rations to 300 grams a day,
     whilst in some areas rations as low as 250 grams/day have been noted.
     Consumption norms, therefore, have dropped progressively from an
     average of 600 grams per caput/day last year.

     Worsening  food shortages and the inability of the PDS to provide a
     regular supply of basic staples,  have led to the development of a
     number of alternative coping mechanisms. These include, the
     consumption of wild food, petty trading of basic commodities and food
     around most towns, the cultivation of small private plots and rearing
     of poultry, support from relatives from abroad and the use of nominal
     savings for supplementary food purchases at 'peasants markets', which
     now operate at certain times during the month.

     In view of the deteriorating food supply situation, the Government is
     clearly anticipating significant problems in the near future and
     requested the United Nations, in early April, to launch a new
     international appeal for mainly food assistance.

     Emergency Food Aid Needs

     It is estimated that, until the next harvest in October 1996, 33 750
     tons of cereals (maize, maizemal, wheat and rice) is required in
     emergency food aid for 500 000 flood victims and/or other most
     vulnerable people. In addition some 11 800 tons of fortified cereal
     mix is needed for distribution, through kindergartens and nurseries,
     of 150 grams/day per caput to 25 percent of 2.1 million children
     under five in the most vulnerable areas, as compensation for the
     reduction in the PDS special ration.

     For rehabilitation of the agricultural sector, especially the removal
     of sand and debris from flood affected areas and repair of river
     dykes, 25 000 tons of project food aid is required to provide 2 kilos
     per manday for 12.5 million mandays.

     Programme Food Aid

     Although, the FAO/WFP food supply assessment mission identified a
     substantial food deficit last year, at the time it was envisaged that
     the Government would be in a position to make  commercial imports of
     700 000 tons and obtain sufficient quantities of food assistance to
     help bridge the deficit. However, these imports have not materialised
     and a large part of the food deficit has remained uncovered. The food
     supply situation will, therefore, be critical in the lean months
     between May and September, as most of  last year's harvest has been
     consumed, stocks are critically low, there is very little likelihood
     of significant commercial imports and there is virtually no further
     food assistance in the pipeline. The country, therefore, urgently
     needs programme food aid or balance of payments support for
     commercial imports of 978 000 tons of cereals, if the Government is
     to maintain minimum ration levels, until the next harvest in October.


     OUTLOOK FOR 1996/97

     Even under normal circumstances the domestic production of food in
     Korea DPR is heavily constrained by a shortage of cultivable land.
     Since 1990 the problems of domestic supply have been further
     compounded by declining productivity due both to natural soil
     depletion and the inability of the country to manufacture or import
     sufficient quantities of fertiliser to maintain productivity, due to
     severe economic problems and the consequent shortage of foreign
     exchange. Declining productivity and the crippling effects of the
     floods last year, which not only destroyed standing crops but also
     the irrigation network and property, exacerbated an already difficult
     food supply situation. The floods also left an estimated 90 000
     hectares of paddy land  under large deposits of sand and debris. Due
     to extreme shortages of imported fuel for operating excavation
     machinery, the Government presently estimates that only 50 000
     hectares can be partially reclaimed to allow some cultivation in
     1996. FAO field visits in April confirmed that large areas still
     remained under debris and sand, estimated at 30 - 40 centimetres in
     depth. In addition production will be significantly constrained by
     the lack of fuel for irrigation purposes and agricultural machinery.
     The Government presently estimates that  50 000 tons of diesel are
     needed for agricultural operations, including rehabilitation and
     operation of the irrigation system. As a result of the fuel shortage,
     there is clear evidence that farming is reverting back to the use of
     animal draught power.

     Unless there is a marked improvement  in the supply of fertiliser and
     fuel in the coming months, the Government's most optimistic
     production scenario is an aggregate output of 5 to 5.5 million tons
     of food grains. This would be in line with trends outlined in the
     FAO/WFP assessment made last year. Under the worst case scenario
     output will be similar to 1995 production of some 4 million tons.
     There is clearly a need to review the situation near harvest. It is,
     therefore, recommended that an FAO/WFP Crop and Food Supply
     Assessment Mission  visit Korea DPR from Mid October, to assess food
     supply prospects for 1996/97.

     Annual domestic requirement is substantially higher than what the
     country can produce, even under the most optimistic scenario, and
     would still need to be supplemented by grain imports in good years.
     Needless to say in poor years the dependence on supplementary imports
     would be much higher. All indications are that in 1996/97  the
     country will carry foreword a structural food deficit of over 2
     million tons even under the Government's most optimistic scenario. It
     is envisaged, therefore, that cereal food availability can only be
     met if there is a further sharp reduction in the use for feed and
     other uses, which of course has significant repercussions for the
     country's livestock sector and future meat availability in the diet.

     In view of dwindling crop prospects the Government has initiated a
     number of measures to enhance domestic production and access to food,
     apart from removing sand and debris from affected arable land. These
     include:

     -  priority to be given to agriculture in future development
     planning;

     -  the introduction of a new rice variety Pyongyang 21 (P21), claimed
     to be more fertiliser responsive than other varieties to reduce
     dependence on chemical fertilisers. The recommended fertilisers
     application for P21 will be 200 kg/ha, compared to 500 kg/ha for
     existing varieties. The target yield is 8 tons/ha;

     -  in February last year under an extensive programme involving a
     large part of the population, some 320 000 hectares of  arable land
     were covered up to 2 cm in depth, with 300-500 tons/ha of  rich
     deposit from river basins to replenish top soil;

     -  developing the use of  microbial fertilisers to reduce dependence
     on chemical fertilizers;

     -  allowing individuals to cultivate crops and vegetables in limited
     areas around dwellings to increase food availability.


     CONCLUSION

     Unfavourable weather conditions in 1994 and 1995 seriously aggravated
     an already strained food supply situation in  Korea DPR, which had
     steadily been tightening for years. In December 1995 the FAO/WFP
     mission strongly advocated international emergency and programme food
     assistance, as it predicted numerous problems in 1996, especially
     during the lean period preceding harvest, when individual and
     national stocks in the PDS would be near depletion. Not only has such
     assistance not  materialised to the extent needed, but also
     Government has so far been unable to secure commercial imports.
     Together this has meant  that the institutional food supply system is
     perilously close to collapse and individual stocks are extremely low
     for those outside the PDS. Worse still the pipeline for emergency
     food assistance, which to date has been supplementing the diet of the
     worst affected population from last year's floods, is dry and from
     May these people will endure severe cutbacks in food availability.
     There are already signs of some nutritional deficiency in various
     segments of the population, which could become chronic in the next
     few months, unless some assistance is provided.

     Although there is clear and urgent need to provide both emergency and
     programme food assistance now, it is fully recognised that these
     measures would only help solve immediate problems and not inherent
     long term ones. In the medium to longer term, over the next few
     years, the country is in considerable danger of recurrent food supply
     difficulties, given its limited potential to expand domestic food
     production either extensively or intensively, declining soil
     fertility that cannot sustain high doses of fertiliser even if they
     were available and a shrinking economy that effectively rules out
     sufficient imports of food to meet the deficit. It is clear that in
     the past food supply depended heavily on the general state of the
     economy and its capacity to finance imports. As this is no longer the
     case, it  is evident that the country urgently needs to address these
     issues and implement some radical solutions, if it is to avert
     serious problems in the future.

                              END

     This report is prepared on the responsibility of the FAO and WFP
     Secretariats with information from official and unofficial sources
     and is for official use only. Since conditions may change rapidly,
     please contact the undersigned for further information if required.

     Abdur Rashid                       B. Szynalski
     Chief, GIEWS FAO                   Director, OP, WFP
     Telex 610181 FAO I                 Telex: 626675 WFP I
     Fax: 0039-6-5225-4495              Fax: 0039-6-5228-2837
     E-Mail: INTERNET: GIEWS1@FAO.ORG

     Please note that this report is available on the Internet as part of
     the FAO World Wide Web and Gopher under WAICENT FAOINFO at the
     following URL address: HTTP://WWW.FAO.ORG/ then clicking on WAICENT,
     ECONOMICS and GIEWS.

     FA 4/50 KOREA DPR



Bernard Krisher
4-1-7-605 Hiroo
Shibuya-ku, Tokyo, Japan (150)
Tel: +81-3-3486-4337
Fax: +81-3-3486-6789
Mobile: +81-30-08-88493
  (In Tokyo) 030-08-88493
Internet: bernie@media.mit.edu