SPECIAL REPORT

FAO/WFP CROP AND FOOD SUPPLY ASSESSMENT MISSION TO THE DEMOCRATIC PEOPLE'S REPUBLIC OF KOREA

28 October 2002



 

• Mission Highlights
• 1. OVERVIEW
• 2. OVERALL ECONOMIC SETTING AND AGRICULTURE IN DPR KOREA
• 3. FOOD PRODUCTION IN 2002/03
• 4. FOOD SUPPLY/DEMAND OUTLOOK, 2002/03 (November/October)
• 5. FOOD AID NEEDS AND ROLE OF FOOD ASSISTANCE

Mission Highlights

1. OVERVIEW

An FAO/WFP Crop and Food Supply Assessment Mission visited the country from 24 September to 5 October to assess the 2002 crop harvest, forecast 2003 production of winter/spring wheat, barley and potato crops, and estimate cereal import requirements for the 2002/03 marketing year (November/October), including food aid needs.

The Mission interviewed government and cooperative officials, and observed standing and harvested crops still in fields to assess yields. The Mission also visited schools and nurseries, hospitals, Public Food Distribution Centres, and rural and urban families. The Mission covered seven out of 12 provinces of the country, which account for over 80 percent of the national cereal and potato production. The provinces visited include North Pyongan, South Pyongan, North Hwanghae, South Hwanghae, Pyongyang (rural districts and counties), Kangwon and South Hamgyong. Discussions were held with staff of UN agencies, NGOs, and resident diplomatic missions. The Mission also used rainfall and temperature charts and high resolution SPOT-4 satellite images to verify vegetation conditions in 2002 compared to previous years.

This year relatively good and well distributed rainfall was received during July and August, following a dry period with few rainy days at the beginning of the season in June. This precipitation benefited the 2002 main crops, offsetting the adverse effects of the dry spell. Various parts of the country, however, did experience flooding which negatively affected production. Reservoirs were also replenished, leading to improved irrigation, mainly gravity-fed. International assistance, especially in providing fertilizers and pesticides, has also contributed to better yields. The Government allocated resources on high priority basis and provided farm inputs to the cooperatives at appropriate times.

These positive factors resulted in an estimated cereal harvest about 4.9 percent higher than last year. This represents the best level of food production since the previous peak in 1995/96 and is up by about 49 percent over the reduced output of 2000/01, but is still about 6 percent below 1995/96. It must be noted that the production estimate also includes a forecast of 2002/03 winter/spring wheat, barley and potato crops, to be harvested in April/May, which accounts for about 10 percent of total cereal output. The production estimate may need to be revised once the harvest outcome of these crops is known.

Despite the good outcome, the 2002 cereal production still remains well below the minimum consumption needs of the country. The estimated total cereal production, including potatoes in cereal equivalent, available for consumption in the 2002/03 marketing year (Nov./Oct.) amounts to 3.84 million tonnes. Food use, based on an estimated population of 23.3 million, and other utilization needs are estimated at 4.92 million tonnes. This results in a deficit of 1.084 million tonnes. Commercial imports are estimated at only 100 000 tonnes due to low import capacity of the country, while concessional imports are estimated at 300 000 tonnes and pledged/pipeline food aid at 126 000 tonnes. This leaves an uncovered deficit of 558 000 tonnes which needs to be covered by additional food aid and concessional imports.

In spite of an increased harvest, a significant number of families in DPR Korea are still unable to meet their food needs. While the geographical disparity in food availability between the food surplus south and west of the country and the food deficit north and north-east remains a key factor in the food security equation, urban/rural disparities are more acute and will require particular attention in food assistance programmes in 2003.

It is still too early to fully appreciate the impact of the economic reforms which were introduced in July 2002. However, the Mission is concerned both by recent high levels of inflation in farmers' markets, and by the plight of the excess labour force which could be created as industries and state enterprises strive to increase their productivity and efficiency. Close monitoring of these factors in the coming months is imperative. In addition, a joint DPR Korea/UNICEF/WFP nutrition survey is currently underway and once the results are available, they will certainly improve the understanding of the nature and causes of malnutrition and may result in programmatic changes. This calls for a highly flexible, innovative approach to food assistance programmes in 2003 to ensure that the humanitarian community is able to respond appropriately as the economic situation unfolds and the profile of vulnerability shifts.

2. OVERALL ECONOMIC SETTING AND AGRICULTURE IN DPR KOREA

2.1 Macroeconomy

The overall macroeconomic situation has not changed significantly since the last mission report. As stated in the July 2002 Special Report, DPR Korea continues to experience economic difficulties that began in the early 1990s with unfavourable changes in trade with its traditional partners in the former USSR and Eastern Europe. Government figures show that between 1993 and 1996 the Gross Domestic Product (GDP) declined by 50 percent to a per capita level of US$ 481¹. In 1998 the GDP per capita had further declined to US$ 457². The country has suffered major natural disasters affecting agricultural output in 1996, 1997 and 2000. There has been limited economic recovery with growth of 6.2 percent in 1999 and 1.3 percent in 2000³. Total merchandise exports declined from US$ 1 025 million in 1997 to US$ 597 million in 1999 but improved slightly to US$ 708 million in 2000⁴. Imports, on the other hand, grew more rapidly between 1996 and 2000 resulting in a consistently widening trade deficit that reached US$ 978 million in 2000. Inter-Korea trade expanded by 28 percent in 2000 from the previous year⁵. However, these positive developments are not enough to tackle the ongoing food insecurity problems for the general population.

2.2 Agricultural sector

Agriculture, including forestry and fisheries, contributed about 30 percent of GDP in 2000 ^6. Over the past eight years, natural disasters such as droughts, floods, tidal surges, hail storms, typhoons and extremely cold winters have affected agriculture virtually every year with varying degrees of severity, with consequent adverse impacts on food production. Also the precarious foreign exchange situation has not allowed significant commercial imports of much needed agricultural inputs such as fertilizer, pesticides, plastic sheeting, spare parts for machinery, tyres for tractors and trucks, fuel, etc. Over the years domestic production of fertilizer has declined to a level of about 10 percent of total requirement, increasing reliance on fertilizer donations. Yields of the main crop (paddy) used to be around 7 or 8 tonnes per ha during the 1980s, but now they are about half of that due to lack of agricultural inputs. In order to increase total food production in the country, every possible piece of land is being brought under production, but cultivation of marginal land has unintended consequences of soil erosion and further reduction in overall land productivity. The total food gap in the last 8 years has ranged from 1.04 million tonnes in 1998/99 to 2.2 million tonnes in 2000/01. Thus productivity improvement is needed desperately.

About 50 percent of tractors are not operational due to lack of spare parts, tyres and fuel. The obsolete and decaying farm machinery and irrigation facilities need rehabilitating or systematic replacing. Irrigation facilities require streamlining, preferably linked to large gravity-fed networks. More fertilizer alone is not likely to provide sustainable enhancement in agricultural productivity; other innovative, environmentally non-degrading agricultural techniques (such as soil fertility improvement with green manuring, alternatives to chemical fertilizer, crop rotations, integrated pest management, policy reforms, etc.) need to be put into practice. Double cropping of wheat and barley after rice and maize (cereal after cereal) on already exhausted soils is non-sustainable. Introduction of leguminous crops in the crop rotation is vital. Thus, increased assistance from the international community is needed towards rehabilitation of industries, infrastructure and the agricultural sector.

2.3 Economic policy adjustment ⁷

In July 2002 the Government announced substantial increases in wages, prices and currency exchange rate from the highly subsidised or artificially low levels. Agricultural commodities were also affected by this economic policy adjustment. Accordingly, rice and maize prices in the public distribution centres are now 44-46 won (depending on quality) and 24 won per kg, respectively, compared to about 0.9 and 0.68 won/kg respectively, before July. The farm gate prices are supposed to be about 40 won/kg for rice and 20 won/kg for maize. However, most farmers don't seem to know exactly what prices they will receive for their produce. It is also not clear at this time what will happen to the prices of various inputs such as seed, fertilizer, pesticides, fuel, electricity, etc. So the response to this price adjustment by farmers will be formulated on the basis of the profitability of various crops and that will take some time. Most farmers the Mission talked to said that they would like to increase area under double cropping. However, double cropping is constrained by many physical inputs. The price reforms, in principle, would provide improved incentives and with periodic adjustments to these prices they should result in a positive impact on agricultural production in the medium term. If allowed, farmers' markets⁸ throughout the country can play an important role in this new incentive-based system. It is recommended that in addition to providing urgently needed food aid, the Government and the International Community enter into a policy dialogue to set an enabling framework to mobilize the economic, financial and other assistance needed to promote sustainable food production and overall food security.

2.4 Sinuiju special administrative zone

In September 2002, it was announced that Sinuiju City, provincial capital of North Pyongan on the frontier facing the city of Dandong in China, would have a change of status, to special economic zone. The Sinuiju area would be re-classified as an economic enclave, with free trade status, something similar to the existing Rajin-Sonbong Zone in the far north-east of DPR Korea. For many years, Dandong City has been one of the most convenient places for procuring spare parts, equipment, agricultural inputs, etc., for projects in DPR Korea. Dandong has reliable road, rail and air links with the rest of China and is currently the most strategic rail/road junction for transporting goods into DPR Korea. Southwards, transportation is being improved with re-connection of road and rail links to Seoul, in the Republic of Korea. Thus Sinuiju is expected to generate economic growth with the controlled economic liberalization policy.

3. FOOD PRODUCTION IN 2002/03

3.1 Climate

The Korean peninsula has a continental climate, with average annual rainfall in DPR Korea at 1054 mm, in the range 616-979 mm in the north and north-east (Jagang, Ryanggang, North and South Hamgyong Provinces) to 880-1302 mm in the centre, south-west and south-east (North and South Pyongan, Nampo, Pyongyang, North and South Hwanghae, Kaesong and Kangwon Provinces). About 85 percent of all precipitation occurs during the Spring-Summer months, while 60 percent is distributed in June-September. Typhoons are a regular occurrence, the effects of which are felt at least once per growing season, usually in late-Summer or early-Autumn. Average temperatures vary from -19°C in winter (Ryanggang, January coldest month) to 25°C in summer (South Hwanghae, August hottest month). The frost free period ranges from 160 to 190 days, depending mainly on altitude and determines the length of the cropping season and indeed the choice of crops.

In winter 2001/02, there was less snowfall compared to the previous year. The onset of spring, on the plains and lowlands, was reported as "earlier than normal". Rainfall was experienced nation-wide from mid-April to mid-May. This was followed by a relatively dry period of several weeks until normal expected precipitation patterns were experienced during July-August, duly confirmed by meteorological stations' reports. Intense precipitation in August was reported in a belt from Nampo, Pyongyang, South Pyongan, North/South Hwanghae, Kaesong to Kangwon. There was considerable flooding in Anju and neighbouring counties, in South Pyongan. The September typhoon struck the Korean peninsula further south, but effects were felt mainly in Kangwon and along parts of the East Sea coastal counties.

Although fortunate to have been spared the two typhoons that struck the Korean Peninsula further south, there were instances of intensive precipitation occurring during July-September 2002, all related to the passage of the same typhoons and low pressure systems being experienced within that same period. During three instances of intense rainfall, crops were affected. A small percentage of maize was flattened, forcing farmers to harvest it "green" for fodder to animals. Damage to the paddy rice crop, during the same period, was reported as only light-to-moderate due to submerged and in some cases washed out fields. South Pyongan and Kangwon were among the provinces reporting main flooding. However, South Hwanghae, Pyongyang, Kaesong, North Pyongan and North Hamgyong were affected during the passage of rain, hailstones and high winds.

Figure 1 shows the 2002 rainfall data compared with the long term average from four representative stations located in the major food producing areas of DPR Korea.

Figure 1: Rainfall in different provinces of DPR Korea, 2002 and long term average

Sources: 2002 - Ministry of Agriculture, average monthly rainfall by Province. Average Data: FAOCLIM2 - World-wide

agro-climatic database.

Although supplies of irrigation water were generally considered adequate, energy constraints (electricity, fuel) hindered pumping and caused delays in paddy transplanting in many places. However, it only marginally affected the paddy yields. Now that the new 148 km Pyong-Nam (Kaechon-Lake Taesong) Waterway has been completed, diverting water across South Pyongan Province south-westward towards Nampo, the increased potential for improving the gravity-fed irrigation network has been greatly enhanced.

This year's temperature pattern in most of the major producing areas has been reasonably favourable for both paddy and maize crops during the critical stages of their growth cycles (germination and flowering). However, some counties reported lower than normal nocturnal temperatures in June-July, lengthy periods of cloud cover, and somewhat reduced periods of sunshine hours. The consequences, as pointed out by county and farm authorities, amounted to the late ripening/maturing of both main crops, paddy rice in particular. During the course of the Mission's field visits, the bulk of the maize but only part of the paddy had already been harvested.

3.2 Area Planted

Total land area in DPR Korea amounts to 122 543 sq.km, of which the total cultivated land area is estimated at 17-18 percent, or slightly in excess of 2 million hectares. Approximately 1.4 million hectares are considered suitable for cereal cultivation, 300 000 hectares are under vegetable crops, some 160 000 hectares under fruit orchards and a considerable area allocated to various other food and industrial crops such as mulberry, ginseng and tobacco. There is very limited scope for expanding cultivable areas. The Government has investigated the possibility of reclaiming some 300 000 hectares of tidal lands and another 200 000 hectares by terracing of mountainous areas. Due to the high cost involved, little progress has so far been made mainly in hill terracing. The ongoing land re-alignment exercise has increased the paddy rice production area by about 2 percent.

Paddy

This is the most important crop which is grown mainly in the centre, south-western and south-eastern areas equating to lowland parts of North and South Pyongan, North and South Hwanghae, Pyongyang, Nampo and Kaesong (collectively, the "Cereal Bowl" region) and the narrow east coastal strip comprising parts of Kangwon, North and South Hamgyong Provinces. Smaller acreages are also cultivated in Jagang and Ryanggang Provinces.

Paddy is cultivated in the alluvial plains or on graded terraces equipped with irrigation control systems. The cultivated area has remained almost constant over the last decade. Paddy plots vary in shape and size. However, a province-by-province realignment operation has been under way these past three seasons in order to improve the layout of paddies. Approximate plot sizes now vary from 0.25 to 0.5 hectares and have been transformed and re-aligned into well laid-out regular plots with uniform depth, throughout many of the plains in North and South Pyongan, Pyongyang, Nampo, Kangwon and South Hwanghae Provinces. According to the Ministry of Agriculture, land realignment has increased the overall paddy production area by 4969 hectares, having achieved 74 percent of targeted re-adjustment of the land area. Nevertheless, it has been noted that in periods of severe water shortages, the paddy area was reduced and subsequently planted with soya, or more resistant crops such as sorghum and millet.

In 2002, the reported cultivated area under paddy was 582 857 hectares, an increase of 2 percent on the previous year's area, part of which came from other crops. Given the energy constraints with intensive pumping of water this season, a possible future trend may lead to a decrease in paddy cultivation on some irrigated lands, unless gravity-fed irrigation water can be provided. Crop substitution in these areas with maize replacing paddy is likely.

Maize

Maize cultivation is more equally distributed in all provinces. Maize is planted under mainly rainfed conditions. Until 1998, maize planted area amounted to some 630 000 hectares. But since then, the government has set lower maize planting targets in order to avoid expansion to lands with low potential. On such marginal lands, less water demanding cereal crops and pulses have substituted maize while, on lands with higher potential, vegetables and main season potato have entered into the crop rotations. Hence, area under maize in 2002, estimated at 496 390 hectares, has remained unchanged from the three preceding years.

Potato

Potatoes are grown as a spring (double) crop in the Cereal Bowl region, and as a summer crop mainly in the northern highlands (Jagang, Ryanggang) where a shorter growing season is experienced. As a double crop, potato is sown in March-April and harvested in June while as a main crop it is sown in May-June and harvested in August-September. As the production and availability of main cereals has declined in recent years, potato has been increasing in importance in all the major agricultural areas. Availability of seed is the most important limiting factor to the expansion of area under potato, due to the constraints of storing seed during the winter months. Potato blight has also seriously affected crops in some areas, as has aphids infestations. The area of spring and main season crops at present is around 190 000 hectares. The area under main season potato this year was 89 000 hectares. However, next spring planting is expected to increase by 10 percent due to the renewed emphasis by the Government on double cropping.

Wheat and barley

Summer wheat is grown in the higher altitude parts of Jagang, Ryanggang, North and South Hamgyong where there is a shorter growing season. Winter wheat and spring barley are produced in all provinces except Ryanggang and North Hamgyong and have been the main cereals in the Double Cropping Programme initiated in 1996 jointly by FAO and UNDP, as part of the Government framework for agricultural recovery. The programme is considered, under present conditions, to be an effective strategy towards enhancing food production. The aim of the programme is to utilise part of the agricultural land between October-June with additional cereal and potato crops to be followed by maize and paddy cultivation from June to September. Double cropping practised in all provinces, with the exception of Jagang, Ryanggang and North Hamgyong, is further emphasized.

The double cropped area under winter and spring wheat, spring barley and spring potato has increased from 38 000 hectares in 1997 to the current 191 644 hectares in winter-2001/spring-2002 growing season. Winter wheat is sown from the end of September to mid-October, immediately after the harvesting of the main season crops. Accordingly, the factors that affect the cultivated area under winter wheat are autumn rains, timely availability of seed, and provision of adequate farm power and labour at a time when the demand for labour is high for various other operations. Spring barley is sown in March. The double cropped area is likely to expand further under the present economic reforms. The projected area is increased by 10 percent for winter/spring 2002/03 crops to 211 000 hectares consisting of winter wheat (63 000 hectares), spring barley (39 000 hectares) and spring potatoes (109 000 hectares).

Other crops

Other crops being produced include summer wheat and barley, sorghum, millet, soybean, buckwheat, vegetables (mainly cabbage, spinach, radish, cucumber, eggplant and tomato) and fruit (mainly pears, peaches, apricots, apples and persimmons). Many farms also have sizeable mulberry plantations. The short agricultural growing season limits crop rotations and favours cereal mono-culture in the country.

All available agricultural land is organised and cropped within a total of 3295 co-operative and state farms. Persistent food shortages in recent years have led the country to adopt coping strategies which include the gradual encroachment of hills and mountains to cultivate additional lands on fragile soils. Cropping on such steep slopes, with only marginal potential, has disturbed the existing eco-system by damaging the natural tree/shrub vegetative cover. The consequence is the loosening of the fertile layer of topsoil, as erosion and soil degradation processes remove, transport and deposit this layer in rivers and reservoirs. The Government has combated this encroachment by declaring deforestation illegal and by discouraging cereal cultivation on hill/mountain slopes. The Mission learned that the hill cultivators are mainly landless urban workers but also many farmers. They also include forestry/environmental workers, engaged in tree planting but with temporary permission to farm small plots. In some provinces the cultivation of degraded lands has declined but has apparently not yet ceased.

The overall area cultivated under minor cereals and grains such as sorghum, various types of millet and "off season" wheat and barley in mountainous areas is estimated at about 54 000 hectares. These less-moisture requiring crops are cultivated using little or no purchased inputs. The Mission noticed a diversion of area from maize to sorghum and an expansion of soybean crop planted along boundaries of paddy fields, now increasingly being intercropped with maize and/or sorghum and occasionally grown as a sole crop.

3.3 Means of production and inputs

Planting material

In DPR Korea, high yielding varieties and quality traditional paddy varieties and hybrid maize seeds are replaced each year, and are supplied on credit to the co-operative farm production units by the existing distribution system. Quality seed is multiplied by specialised co-operatives or state farms. This year, seeds were as usual replaced and were available on time as required. Thus sowing dates for all crops were by and large normal.

Due to the 2001 prolonged spring drought when maize seeds widely failed to germinate and as many as two replantings were necessary, many farms decided to plant direct in spring 2002, rather than transplant from nurseries. The Mission learned that for direct field planting, hybrid maize seeds were generally available. Maize seed rates range from 40-50 kg/hectare and plant density varies from approximately 35 000 to 50 000 plants per hectare⁹.
Although transplanted, paddy¹⁰ seed rates are extraordinarily high in DPR Korea, in the range 140-160 kg per hectare. The Mission estimated that the plant population per hectare is also high in the range of 300 000 to 400 000 plants. The decreasing fertility of the soils obliges the cooperatives to use high seed rates. The low tilling rate of the prevailing varieties necessitates an agronomic coping strategy for yield enhancement focused on high planting density, as previously pointed out by the July 2001 Mission. However, low fertilizer applications on low fertility soils result in plant competition for nutrients, thus suppressing yield potential. Correlation between seed rates, plant density, fertilizer consumption and yields needs further research.

Plastic sheeting is used to cover nursery seedlings and has again been widely reported to be in short supply, with the consequent longer duration of the nursery seedbed phase and delayed transplanting. This year the paddy crop has benefited only in a few areas from an increased availability of plastic sheets which are necessary during nursery establishment in order to mitigate the effect of low temperatures in March, when wind, frost and incidences of "yellow dust" from China are experienced.

Regarding potato, planting material was of poor quality and low seed rates (1 tonne per hectare, against the recommended 3-4 tonnes per hectare) were applied. Due to seed shortages, potato tubers are normally cut into four pieces (eyes). Such a practice not only depresses yield levels but also encourages disease infestations to plants. This year, potato blight fortunately did not seriously affect crops, although there were reports of aphid infestations.

Fertilizer and pesticides

According to the Ministry of Agriculture, the availability of fertilizer in 2002 amounted to some 189 000 tonnes of NPK nutrient equivalent, about 1 000 tonnes less than in 2001. In addition, as mentioned in the UN Consolidated Appeal (CAP 2002) document, donations of 200 000 tonnes from the Republic of Korea and 123 785 tonnes from the EU were received and earmarked for 2002 main season crops. It is not clear whether these amounts had been taken into account in the MoA's calculations, nor is it clear whether there is any of this "bilateral stock" available for 2002/03 winter/spring or the main summer crops. Another 100 000 tonnes being provided by the Republic of Korea is earmarked for the 2003 cropping season.

Figure 2 shows that fertilizer use has continuously declined from about 650 000 tonnes in 1989 to about 117 000 tonnes in 1998. There has been some improvement in the last four years.

The bulk (73 percent) of fertilizer availability is being covered by donations, which along with supplementary soil fertilization with organic matter, legumes and green manures, has significantly contributed to increased yield levels. However, the domestic production capacity of the three manufacturing plants (Namhung, Hungnam and Aoji) which continue to suffer not only from obsolescence, but also from extreme shortage of raw material and spare parts, has further declined. In 1999, these fertilizer producing units were still able to produce some 30 percent of the applied nutrients, but in 2002 their contribution accounted for less than 10 percent.

Fertilizer application rates to paddy and maize have increased in 2002 due to improved availability. Part of this season's yield increase can be attributed to the increased and timely applications. Co-operative Farms continue to improve their efforts in producing organic fertilizer providing some 25-30 tonnes per hectare of farm yard manure. The use of organic fertilizer, and of on-farm produced bio-pesticides is being greatly emphasised by farm managers for their beneficial long term effects and for substitution of fertilizer imports.

Although there were numerous observations of spring and early-summer pests such as Stem Borer, Leaf Hopper and Rice Water Weevil, the outbreak was kept under control by the use of bio-pesticides and oil-lamp traps. Interest in Integrated Pest Management (IPM) techniques exists, although co-operative farms prefer to request imported chemical pesticides to tackle pest infestations. Currently, there is no domestic production of chemical pesticides, herbicides or fungicides. According to the Ministry of Agriculture, total imports and/or assistance from international sources in 2002 include Deltamethrin (61 000L), Nubacuron (200 tonnes), Mancozeb (140 tonnes), Carbosulfan (96 tonnes), Butachlor (55 tonnes), Quin Chloride (22 tonnes), and NC-311 (5 tonnes). On-farm produced bio-pesticides contain a tobacco residue base, with wormwood extracts and other ingredients, topped up with Deltamethrin and other toxic substances. The main imported pesticides are of broad spectrum: lethal to both pests and predators, including natural enemies of the pest.

Farm power

Land preparations for paddy is still mechanised. However, draught animals (oxen) are being increasingly used as tractor power deteriorates. Draught animals are also used in conjunction with tractors for cultivating maize. Only about half of the estimated 64 000 existing tractors are operational. Tyres and spare parts have been made available to the co-operative farms. However, many of the functioning tractors are old and in some cases being utilised only for transporting goods rather than field operations. Although both fuel and electrical power supply to the co-operative farms has been maintained at last year's level, farmers still report shortages of these essential energy sources, particularly for irrigation.

Irrigation

The country has high water potential while the availability of agricultural land is limited. It may be recalled, however, that heavy rains and high tidal waves during 1995-96 caused disastrous floods which significantly damaged the irrigation network. Most of the irrigation systems are also energy intensive (mainly electrical pumping) and much of the power-plants and infrastructure are near the end of their economic life. The medium term situation is being alleviated however, by the recent completion of the 148 km Pyong-Nam Waterway in South Pyongan Province and also a plan to construct two more similar waterways (North Pyongan, North Hwanghae-Kangwon). These are all gravity irrigation systems, which will be linked to the existing network allowing reduction in the number of pumping stations.

The irrigation pattern in DPR Korea is dependent on the availability of water in the reservoirs and rivers. In 2000 and 2001, water levels were very low and reservoirs dangerously below normal capacity. However, an abundance of well distributed rains in summer 2001, sustained this year from mid-April through September has maintained satisfactory levels in most irrigation reservoirs. By September 2002, water volume levels in eight major stations were reported to be in excess of 50 percent of normal capacity, and averaging 59 percent nation-wide. (Figure 3).

3.4 Yield and Production

Paddy

This year the estimated production of the irrigated paddy crop is forecast at 2.19 million tonnes (unmilled) about 6.2 percent higher than last year and about 29 percent more than the low output in 2000. However, it is still about 9 percent lower than the output in 1996/97 (the best year for paddy in DPRK since 1995/96). The 2002 main season yields are about 4.2 percent higher than the previous year yields.

Irrigation was provided on a regular basis to most of the paddy fields. Although the rainfall pattern during June-August was favourable for the most sensitive growth periods of the crop, the Mission was told that temperatures during the same period were often lower than normal, in particular nocturnal minimum temperatures and that there had been less hours of sunshine. Although this year there has been an overall increased availability of irrigation water compared to 2000 and 2001, technical difficulties related to pumping water into paddies effectively delayed transplanting from nursery seedbeds in May-June. However, the overall performance of the paddy crop was somewhat better than last year due to improved fertilizer application, land preparation and low incidence of pests and diseases.

Maize

This year's maize output is forecast at 1.65 million tonnes, about 11 percent up on last year. Germination was generally satisfactory as about 50 percent of the maize crop was direct sown, rather than sown in nursery seedbeds. Satisfactory spring rains occurred at flowering and pollination stages. Some maize was flattened and/or waterlogged (parts of South Pyongan, Kangwon provinces) during short periods of intense precipitation recorded in August and September. The damaged maize was harvested "green" and fed to animals.

Potatoes

The summer potato output is estimated at 1.14 million tonnes or about 284 000 tonnes in cereal equivalent. This is approximately 11 percent lower than last year mainly due to poor quality potato seeds.

For the forecast of the double cropping production in mid-2003, the yields are assumed to be equal to the last five year averages, and the area to increase by 10 percent from this year's levels due to the renewed emphasis on double cropping under the current economic policy adjustment programme of the Government.

Table 1 shows the expected national and provincial breakdown of cropped area and production for 2002/03, while Table 2 below gives the area, yield and production of cereals and potato in cereal equivalent for the marketing year November 2002 to October 2003 and comparison with the previous year. Production of winter/spring crops to be harvested in 2003 is forecast as explained above.

Table 1: DPR Korea - Area and Production of main season crops (2002) and forecast of double crops by Province, 2002/03 (area in '000 hectares, production in '000 tonnes)

1/ Milling rate of 65 percent.

2/ Potato converted to cereal equivalent at 25 percent.

3/ City with rural districts and counties.

Table 2: DPR Korea - Area, Yield and Production, 2002/03 as compared to 2001/02(area in `000 hectares, yield in tonnes/hectares and production in `000 tonnes)

1/ Converted from paddy with a milling rate of 65 percent.

2/ Includes sorghum, millets and summer wheat and barley.

3/ Potato cereal equivalent of 25 percent.

4/ Based on forecast for 2002/03 double cropping season.

Figure 4 shows total cereal production (including rice in milled form and potato in cereal equivalent) from 1995/96 to 2002/03. Long term production levels show a negative trend between 1995/96 and 2000/01 with some recovery in 2001/02 and 2002/03.

Figure 4: DPR Korea - Paddy, Maize and Total Cereal Production

3.5 Livestock

In the wake of the serious food shortages, government policy for the livestock sector is to discourage mono-gastric animals which require grains for feed and to encourage increased ruminant herds, particularly goats and rabbits.

Official estimates indicate that following a significant decrease in livestock numbers in 1997 in the aftermath of disastrous floods, there has been a positive turnaround in the number of all livestock species, except oxen and sheep (Table 3).

Table 3: DPR Korea - Livestock population, 1996-2002 ('000 head)

4. FOOD SUPPLY/DEMAND OUTLOOK, 2002/03 (November/October)

4.1 Cereal supply/demand balance, 2002/03

In drawing up the cereal supply/demand balance for 2002/03 (November/October) the following assumptions and parameters have been used:

• A population of about 23.3 million in mid-2002/03 marketing year, obtained by applying an annual growth rate of 1 percent to last year's revised population of 23.08 million (see FAO/WFP Special Report July 2002 for details).
• A consumption requirement of 167 kg/caput of cereals including rice, maize, potato in cereal equivalent, wheat and other grains per annum is used, which provides about 1600 Kcal or 75 percent of the daily calorie requirement of 2130 Kcal/person/day.
• The seed requirement for 2002/03 has been estimated using the following assumptions:
• - Rice: 97 kg of rice for 583 000 ha = 56 550 tonnes
• - Maize: 45 kg/ha for 496 000 ha = 22 320 tonnes.
• - Potato: 1000 kg/ha (250kg in cereal equivalent) for 198 000 ha = 49 500 tonnes
• - Wheat, Barley and other cereals: 200 kg/ha for 156 000 ha = 31 200 tonnes
• Similar to the previous years, post harvest losses of 15 percent in view of persistent problems of transport and threshing and poor storage facilities.
• Other uses including industrial use of grains at 3 percent of the total availability.
• The overall livestock numbers are increasing but as stated earlier the emphasis is less on grain eating animals such as cattle and more on goats and rabbits. In view of this the Mission used the feed grain figure provided by the Ministry of Agriculture. This figure is considerably lower than the estimate used by the last year's Mission.
• Paddy to rice milling rate of 65 percent as used by previous FAO/WFP Missions; cereal equivalent of potato is computed at 25 percent of the tuber volume.
• In view of chronic foreign exchange shortages which constrained commercial import of cereals to only about 43 000 tonnes in 2000/01 and 37 000 tonnes in 2001/02, commercial food imports in 2002/03 are projected at 100 000 tonnes due to signs of some recovery in the economy.

The cereal balance sheet for the 2002/03 marketing year (Nov./Oct.) is outlined in Table 4.

Table 4: DPR Korea - Cereal balance sheet for 2002/03 (Nov./Oct., in '000 tonnes)1/

1/ Including potatoes in cereal equivalent.

2/ Rice imported on loan from Republic of Korea 400 000 tonnes minus 100 000 tonnes consumed in Oct. 2002, before the new marketing year.

3/ Includes a conservative estimate of 100 000 tonnes from China.

The total cereal import requirement in 2002/03 is estimated at 1.084 million tonnes and is shown in historical context in Figure 5. During the past seven years the cereal import requirement (or national food deficit), has been in excess of 1 million tonnes, reaching over 2 million tonnes during 2000/01, the year of the worst harvest. Over the last two years the gap is narrowing, but it is still higher than the lowest level of 1.04 million tonnes in 1998/99. For the coming year the uncovered food deficit is estimated at 684 000 tonnes assuming that the anticipated commercial and concessional imports materialize. The Republic of Korea has offered 400 000 tonnes of rice on loan, of which 100 000 tonnes is expected to be consumed before the start of the next marketing year. Hence the remaining 300 000 tonnes is included in the food balance sheet as concessional imports for the coming year. Food aid expected to be in stock or to arrive after 1 November 2002, is estimated at 126 000 tonnes of cereals. Thus, the uncovered deficit is large and must be viewed seriously. It needs to be emphasized that unless the international community responds positively, millions of people in DPR Korea, including large numbers of children, old people, pregnant women and lactating mothers, will face severe hardship resulting in malnutrition and poor health.

In view of the chronic food emergencies for each of the past eight years in DPR Korea, the Mission recommends that in addition to providing urgently needed food aid, the Government and the International Community enter into a policy dialogue to set an enabling framework to mobilize the economic, financial and other assistance needed to promote sustainable food production and overall food security.

Table 7 shows the province-wise cereal balances. Only three provinces (North Pyongan, North Hwanghae and South Hwanghae) out of a total of 12 have small surpluses, while the other 9 face severe food shortages ranging from 14 000 tonnes in Ryanggang to 434 000 in Pyongyang.

Table 5: DPR Korea - Cereal surplus/deficit by province, 2002/03 ('000 tonnes)

1/ After deduction for seed, feed, losses and other uses.

2/ Revised population figures projected to mid-2002/03 using revised growth rate of 1 percent.

3/ At 167 kg of cereals per caput/annum.

5. FOOD AID NEEDS AND ROLE OF FOOD ASSISTANCE

5.1 Household food security

The second consecutive year of reasonably good harvests in the DPR Korea will help underpin the advances made in food security at the national level, since the disastrous harvests of 1997/98 and 2000/01. At the household level, however, the picture is very different and there remain - predominantly for the urban population - serious problems of purchasing power, insufficient availability in markets and consequently, for many, lack of a diversified diet. It is still too early to predict the medium- to long-term impact that the process of economic adjustment will have on household food security. However, it is almost certain that it will change the profile of vulnerability in the country, calling for a high degree of innovation and flexibility in humanitarian assistance programmes.

In the marketing year 2002/03, the Government will maintain the food allocation for the farming population at a substantial 600g per day for each member of the farming family, regardless of age (219kg per annum). This provides more than the family's daily cereals requirements. Farmers supplement their state food allocations from kitchen gardens¹¹ and additional production on hillsides. They have increased their livestock holdings in the past 1-2 years. Additional cash income is generated through sales of surplus produce through farmers' markets. In general, this gives them far more diversified and substantial diet and a much higher level of comfort in terms of food security than the urban population. This level of comfort extends likewise to state farmers, who are provided with a PDS ration, but who at the same time receive significantly higher salaries than many urban workers and cultivate sizeable kitchen gardens. Such families are likely to be left with over half of their monthly income after having met the family's basic food needs.

The implications of the economic reforms on the co-operative farm economy cannot be fully assessed at present as the prices of agricultural inputs, such as seeds, fertilisers, pesticides, fuel and spare parts, have not yet been determined. However, given the State's policy that those producing the nation's food should be favoured, it is highly unlikely that co-operative farm families will be worse off (the free rent which both state and co-operative farmers will enjoy is already a good indication of this).

Urban populations in general are still far more vulnerable than rural populations. Despite the marginal increase in harvest, the Government has announced that it will only have enough food to provide an average of just over 270g of cereals per person per day through the PDS next year (a decrease of 7.5 percent compared with the current marketing year)¹² This cereals ration covers only 45 percent of the daily energy requirements of the urban population. It is precisely the ability of the family to meet the remaining 55 percent which is the decisive and critical factor determining urban food security.

In order to cover its basic food needs, the average urban family is forced to spend 75 - 85 percent of its income on food, including purchases made from the PDS, state shops¹³ and farmers' markets ¹⁴. This compares to 20 - 35 percent for state farmers and much less for co-operative farmers.

Another key issue is that urban families rely heavily on farmers' markets to supplement the PDS ration, with some having to purchase between 25 percent and 30 percent of their food in these markets, depending on the composition of the family. The recent increased monetisation of the economy has given rise to significant inflation in farmers' markets, with the price of rice increasing by 50 percent in just three months. The implications of this are clearly serious for those with high exposure to the markets, who are finding it increasingly difficult to purchase enough additional food to meet their family's needs. This is the case in all parts of the country and will be most acute during the lean season (typically up to 5 months). However, the problem is likely to affect to a greater extent the northern and north-eastern provinces, where the availability of food in farmers' markets is believed to be lower, due to less arable land being available, the lower productivity of that land, and lower scope for fruitful kitchen garden production on farms.

The price reforms are likely to have a positive impact on the economy of a number of urban households. Most favoured are hard labourers, such as coal miners, and while those groups also received more benefits than other workers under the old system, the recent rise in salaries is proportionately higher for them. Less favoured are the 'non-productive' urban dwellers, such as housewives, the elderly and those working in less productive industries. These groups have seen the free benefits they enjoyed under the old coupon system disappear and have watched the disparity widen between their income and standard of living, and those of their more 'productive' neighbours.

WFP has recently been able for the first time to carry out rudimentary household food economy analyses in the DPR Korea. These have been made possible thanks a wide array of data collected by WFP staff through focus group discussion held with both urban and rural families. They are demonstrative also of a new level of open partnership which WFP is enjoying with the Government of the DPR Korea. Data on salaries and pensions, food commodity prices in PDS outlets, state shops and farmers' markets, rent, utility and transport costs, have been used to produce household economy profiles for families of different sizes, compositions and in different conditions. These focus on how each type of household tries to meet its basic food needs using all sources of food and income at its disposal.

Such analyses have given WFP renewed confidence in its targeting and in the scale of its proposed 2003 programme. At the same time, they have confirmed that certain sub-groups within the urban population are highly vulnerable, regardless of their geographical location. Mothers and children remain the most vulnerable groups in general, given special dietary needs which would simply not be met in the current context without external food assistance. While both groups continue to need assistance, urban mothers and children remain particularly vulnerable, because they have access both to a lower quantity of food than those in rural areas and to a much less diversified diet, containing sufficient sources of protein and micronutrients.

Many large urban families are also food insecure. Even if both husband and wife are working and there is additional income from a pension, large families (4-6 people) find it immensely difficult to make ends meet, mainly due to the large quantity of cereals they require over and above the PDS ration. Most are forced to spend over 80 percent of their income on food. They rely extensively on the farmers' markets, with some needing to procure an additional 15 - 50 kg of cereals per month, even if they have a kitchen garden. Such families are vulnerable the whole year round and will be among the hardest hit, if inflation continues in the farmers' markets. They will not be able to cope at all in the lean season, when availability of both cereals and other food commodities diminishes in the farmers' markets and state shops.

Certain elderly people remain highly food insecure. The most vulnerable elderly (such as the single widow living alone or the couple living on one pension) are able to cover only 60 - 70 percent of their food needs using their pension income; they can purchase only a negligible quantity of vegetables in state shops and cannot afford to shop in farmers' markets. Others rely on farmers' markets for additional food purchases, meaning that they will experience difficulty in lean season months and may be unable to cope, if inflation persists. Elderly families of this kind are highly food insecure in all parts of the country, as the critical factor in their food economy is less the availability of food in markets and more the lack of cash to access those markets, after they have purchased their PDS ration and settled rent, heating and utilities payments.

Under the economic reform, surplus labour which is created as factories seek to increase both productivity and efficiency is being redeployed by the State to work in other enterprises or on public works schemes. In this way, those designated as excess labour can still receive a salary which - depending on the number of days they work and their work outputs on the public works scheme - could in theory approximate the salary they were receiving in the factory. One concern is that, particularly in the northern and north-eastern regions, where there is a high concentration of ailing and unproductive industries, there may be insufficient public works to absorb a potentially significant excess labour force.

In conclusion, while in general the economic reforms and other developments in the country should have a positive impact in the long run, many families in the DPR Korea still find it extremely difficult to cover their basic food needs. Some find it impossible. There remain geographical disparities in access to food, with the north and north-eastern regions greatly affected due to their lower agricultural potential, the much higher concentration of PDS dependants and the downturn in economic activity. However, more marked than this geographical disparity is the urban/rural divide, with a significant number of urban families across the country facing serious food insecurity. What is clear is that food assistance, targeted to specific highly vulnerable groups within the population, must continue in the coming year to prevent extreme hardship.

5.2 Food aid needs and the targeting of food assistance

With continuing gains in food security for the farming population and the marginalisation of many less productive urban families, the Mission recommends that the focus of WFP's programme turn increasingly to urban areas and particularly to vulnerable groups with special needs residing in those areas.

Over 50 percent of WFP's programme continues to be aimed at children from 6 months to 10 years old in nursery, kindergarten and primary schools, or in institutions such as orphanages or hospitals. Maternal health continues to be a high priority, with the targeting of pregnant and nursing women limited to PDS-dependent urban mothers in recognition of the far more substantial and diversified diet, to which rural women have access. With WFP's recent household food economy analyses having confirmed their vulnerability, the Mission recommends that WFP broaden its assistance to the elderly in geographical terms, while narrowing its eligibility criteria. The recommended number of food aid beneficiaries is shown below.

Table 6: DPR Korea - Recommended number of food aid beneficiaries for 2003

* Children in hospitals not included in the total as the figure is accounted for under the respective age groups (nurseries, kindergartens, schools)

Food assistance requirements for these groups for the period January to December 2003 are estimated to be approximately 512 000 metric tons.

In this critical period of economic transition, there are three factors which could have serious implications for the 2003 food assistance programme. Firstly, if rising prices in the farmers' markets further erode consumer purchasing power, additional assistance may be required for marginal families, predominantly in urban areas. Moreover, if further study reveals that a greater degree of price stability would be desirable, the Mission recommends that WFP, in consultation with the Government, consider direct market interventions, in order to even out seasonal availability and price fluctuations.

Secondly, there is concern regarding the absorptive capacity of the economy/state infrastructure for redeploying the excess labour created as industries strive to become more efficient. The Mission recommends an expansion of food-for-work schemes, focusing on the economically marginalised North and North-east region. Such programmes will provide a critical safety net, while at the same time allowing communities to look beyond the humanitarian and enhance longer-term food security. In addition, there will be a need to observe this phenomenon closely and to constantly reassess the need for additional humanitarian interventions.

Thirdly, the 2002 Nutritional Survey will intensify the humanitarian community's knowledge of malnutrition among women and children and may give rise to recommendations aimed at enhancing WFP's programme and further sharpening the targeting of food assistance.

These factors will oblige WFP to maintain a high degree of flexibility, to pursue new and innovative approaches to its interventions, and to leave scope for adjusting the scale and nature of its 2003 programme as the economic situation unfolds and the profile of vulnerability shifts.

Finally, it should be stressed that, with advances made in WFP's analysis of vulnerability, the WFP 2003 programme will target food assistance more strictly than ever to those who cannot survive without it. It is ever more critical, therefore, that breaks in the food pipeline be avoided, as these will have widespread and serious health implications for women, children and the elderly in particular. The Mission urges the donor community to do everything possible to maintain essential safety net being provided by targeted food assistance through WFP and help avoid a deepening of the humanitarian crisis faced by the people of the DPR Korea.

Monitoring

WFP should retain its current operational structures, with a main office in Pyongyang supporting 5 sub-offices in Sinuiju, Wonsan, Hamhung, Chongjin and Hyesan. These structures give WFP by far the most widespread coverage of any international organisation working in the DPR Korea, allowing it to cover all accessible provinces in the country, including those in the remote northern and north-eastern provinces. WFP has approximately 50 international staff, most of which are dedicated to the programming and monitoring of food assistance. It has access to 163 of the 206 counties in the country. In these counties, WFP monitoring staff pay visits to local counterpart offices, public distribution centres, children's institutions, schools, hospitals, beneficiary families, and food-for-work sites.

In 2002, WFP again increased the intensity of its monitoring - in the period January to September 2002, an average of 444 monitoring visits were carried out per month, compared with 323 per month in the same period last year. Furthermore, since mid-2002, WFP monitors and missions alike have been able to collect from Government and beneficiaries a much wider array of data, including salaries and pensions, costs of rent and utilities and prices of food commodities. This has helped enhance the quality of WFP's monitoring and has allowed basic food economy analyses to be carried out to underpin programming decisions.

Other progress made in 2002 includes the Government's commitment to carrying out the Nutrition Survey, the introduction of a medical evacuation system, which has been tried and tested, a greater degree of mobility for staff living in remote sub-offices and the permission to install satellite communications at the country office and at sub-office locations.

These advances are part of an encouraging long-term trend in operating conditions. Nonetheless, in this critical period of economic transition, it is essential that further improvements be made, if the international community is to be in a position to assist and support the reform process and the people who will be affected by it. WFP remains highly concerned for the plight of the population of inaccessible counties, for example, as it has no way of evaluating the impact of economic reform on them. A greater degree of access to, and information on, state shops and farmers' markets is also required in order to enhance vulnerability analyses and monitor the evolution of prices and availability as the economic transition advances. In August 2001, the Government committed to providing WFP with a full list of beneficiary institutions. It has yet to do so, in spite of repeated assurances. WFP is concerned that continued failure to do so will put at risk future donor funding of the programme.

In the coming months, work will continue with the Government to improve access to a wider number of counties, beneficiary families and to allow unannounced visits to families, local markets and institutions alike. It is paramount at this critical juncture that the humanitarian community and the Government work tirelessly together to raise donor confidence, by demonstrating measurable improvements in WFP operating conditions, especially with regard to monitoring and access. Only in this way can sufficient quantities of critically needed food assistance be provided to the most needy people in the DPR Korea.

1 UNICEF, December 2000.

2 UN, Consolidated Inter-Agency Appeal 2002

3 Bank of Korea, Seoul.

4 Economist Intelligence Unit (EIU), 2002.

5 Republic of Korea Customs Service.

6 EIU; and Bank of Korea, Seoul.

7 As part of this policy wages were increased by about 20 fold depending on the type of work, and the exchange rate was increased from 2.15 won per USD to 151 won per USD.

8 Each co-operative farm household is allowed to cultivate a maximum of 30 pyongs (about 97.2 sq meters) as individual plots adjacent to their homes. The produce from these "kitchen garden" plots (vegetables, potatoes, maize) is intended to supplement other foods for home consumption, however, a portion of this produce is sold or bartered at markets held regularly in the county and provincial towns.

9 The number of growing days of maize varieties grown in DPR Korea range from 90 to 150 days, the most common being 120 days. Most of the maize grown are hybrids, while OPV are sown in the mountainous areas. Hybrid varieties, when good weather and cropping conditions permit, are capable of yielding 5-6 tonnes per ha on average.

10 At present, 70 percent of the cultivated varieties are of the high yielding type, while the remainder are improved traditional varieties. Average yields of varieties of 150 days cycle of 6-7 tonnes/hectare are achievable, the range being 4-10 tonnes/hectare. The short cycle varieties (120-130 days) used in DPRK yield less and availability of seed is scarce. Adequate short cycle varieties are thus needed as the pressure for double cropping increases. There is scope for research to enhance yields.

11 Kitchen gardens are plots of land, usually around houses or apartments, which are cultivated by individual households.

12 Through the PDS, the Government makes available a ration of cereals (maize, wheat, barley, rice, potatoes, depending on the season), which the population is eligible to purchase at prices fixed by the Government.

13 State shops sell non-cereal produce such as vegetables, fruits, meat, eggs and vegetable oil at prices fixed by the Government.

14 Farmers' markets are markets in which farming households sell surplus produce. Prices fluctuate according to supply and demand.