Seemingly, in recent days some good economic news began to emerge from North Korea. Last month, the World Food Program published its estimates of North Korea’s 2014 harvest. It seems that the harvest is better than the year before, even though the 2013 harvest was also remarkably good. It is estimated that in 2014 the North Korean farmers harvested some 5.1-5.2 million tons of grain, well above the level of 4.5 million tons which was the norm until recently.
So, North Korean agriculture is improving, and it is clear what brings such improvement. From 2013 the North Korean government began to widely implement a policy of reforms, known as the ‘June 28 decisions’. In essence, the measures envision the switch to household-based agriculture. Under the new system, one or two neighbouring families can register as a ‘small work team’ and then keep 30% of the harvest they reap.
According to some reports, from this year, the share will increase to 60%. At least, such an increase is said to be a part of the ‘May 30 measures’ which are to be implemented from this year.
In the past the North Korean farmers were, in essence, modern-day slaves. They could not leave their farm and change jobs without prior permission, and they worked for fixed rations and small salaries. The actual results of their work had little impact on their income: irrespective of whether they worked well or not, the payment was roughly the same. So, like serfs and slaves of the bygone eras, they did not work hard unless supervised closely.
Now, things have changed. North Korean farmers are becoming sharecroppers, not slaves. While sharecroppers are exploited, too, they know that the efficiency of their work will have a direct impact on their income and their living standards;, hence they were willing to work hard and did what they could to increase the harvest. At the end of the day, the more sharecroppers produce, the better they live. The increase in the agricultural productivity, recently experienced by North Korea, seems to confirm it.
Thus, there are good reasons to feel optimistic about the future of North Korean agriculture. The new policies work, and the world experience also confirms that such changes are likely to produce quick results. In China, where similar policies were first implemented in 1978-79, agricultural production increased by an impressive 50 percent within merely seven years from the switch to the new system.
It is remarkable that in China this unprecedented growth was achieved without much additional investment. Once the Chinese farmers began to work for themselves, they increased their output, even though the arable area, the level of mechanization, the availability of fertilizer and many other variables remained, essentially, the same. The only thing which changed in China from the beginning was the incentive structure, and this change immediately produced great and impressive results. There is no reason to believe that North Korean farmers will react differently.
In the past, the North Korean government was remarkably reluctant to change the system, because the top decision makers were afraid that even small reforms would trigger a major political crisis, perhaps a revolution. While such fears are not completely unfounded, of all possible reforms the changes in agriculture are, perhaps, the least risky politically.
The world experience shows that farmers tend to be politically passive, unless organized by outside forces. They are not much interested in political questions, if they assume that hard work will yield good results. Farmers’ unrest is not unknown, to be sure, but most revolutions begin in cities, not in villages. So, from this point of view, a minor relaxation of control in the countryside will not create excessive risks for the North Korean political elite.
Instead, the new policy is likely to bring easy economic improvement, both in the countryside and in major cities. Hence, one can hope that reforms will continue, so we will hear more good news from North Korean farms.