N.Korea to allow limited private ownership of farmland

N.Korea to allow limited private ownership of farmland. September. 25, 2012 06:34. zsh75@donga.com.

North Korea is set to implicitly allow “family-based farming,” something similar to what China introduced when it started to implement economic reform and market opening, said a source on the North on Monday.

Pyongyang will thus effectively acquiesce the new system of “production and disposal of surplus agricultural produce under the responsibility of a family or individual." This will end the practice of its socialist agricultural system based on “joint production and distribution.”

Amid this development, speculation is rising over what other measures the North will introduce when its Supreme People’s Assembly opens in Pyongyang Tuesday.

New agricultural reform pushed for by the communist government, as reported externally thus far, will allow the division of farmer groups into three to six members each at collective farms instead of groups of 15 to 20.

A source familiar with North Korean affairs said Monday, however, “Dividing the groups into smaller ones is Pyongyang’s official stance, but when explaining the reform measures to farmers recently, authorities said they wouldn`t block the groups from further dividing farmland into smaller pieces for farming by households.”

This means that the North Korean government will effectively allow individual cultivation by farmers, a move that is expected to bring about massive change in the society there.

While agricultural produce is divided at a ratio of 7:3 for the state and farmers, Pyongyang will accept payments to the government either in kind or cash at the same time. This means that farmers can sell all of their produce on the market and pay 70 percent of the revenues to the state in lieu of agricultural produce.

North Korean authorities are reportedly saying the government is collecting 70 percent of agricultural produce due to fiscal difficulties, but that if state finances improve, farmers will have to pay just half of their produce.

As soon as this year’s harvest ends, Pyongyang will start the process of distributing farmland to individual groups and officially commence the new farming system beginning next year.

North Korea has also simultaneously implemented agricultural and industrial reform and tested its new economic system at several factories in certain regions. Pyongyang has thus experimented on if companies can feed workers on their own if the former is given self-autonomy in production and sales and halts rationing and monthly salary payments to workers.

The test reportedly ended in failure, however. An informed source on the North said, “The measure was tested on ‘best performing’ companies, but monthly production per worker amounted to just 30,000 to 40 North Korean won (4.60 to 6.20 U.S. dollars based on the exchange rate of late September)."

This figure is far below 150,000 won, the monthly living expense for a family of four as estimated by the North.