Bloomberg News

North Korea Food Crisis Worsens as Prices Jump, Aid Vanishes

September 15, 2011

(Updates with Carter accusation in second paragraph.)

Sept. 15 (Bloomberg) -- North Korea’s food shortages are worsening, with a drop in aid and a jump in food prices prompting a “rapid” rise in malnourished children and putting millions of others at risk, two United Nations agencies warned.

The country faces a shortfall of as much as 700,000 metric tons of food this year, which could affect a quarter of the 24 million population, Hiroyuki Konuma, the Food & Agriculture Organization’s Asia representative, told reporters in Bangkok today. Former U.S. President Jimmy Carter accused the U.S. and South Korea in April of a “human-rights violation” for refusing to give food aid to North Korea.

While a harsh winter and summer floods damaged crops, agricultural output is expected to remain about the same or slightly higher than last year, Konuma said. A slump in trade and aid amid U.S.-led efforts to stem funding for Kim Jong Il’s regime, together with global food prices that remain close to record highs, have meant the North Korean government has been unable to bridge the shortfall, he said.

“We are afraid that next year will be a more severe situation,” said Konuma, who returned yesterday from a three- day trip to North Korea. “That’s why we are making a big voice to the international community to provide support.”

South Korea and the U.S. have resisted UN appeals to provide food to North Korea, which they blame for attacks last year that killed 50 South Koreans. President Lee Myung Bak dismantled his predecessor’s “Sunshine Policy” of engaging with the North, arguing that this only served to encourage Kim’s provocative behavior.

Tough Line

The administration of U.S. President Barack Obama echoed that policy, saying that sanctions aimed at cutting the flow of revenue to the North had to be enforced until Kim meets commitments made in multinational talks to dismantle his nuclear weapons program. The U.S. and Lee say the North must also make an irrevocable commitment to cease provocations like the March sinking of the Cheonan and November shelling of Yeonpyeong Island.

The UN will probably be able to provide about 100,000 tons of the 434,000 tons of food it appealed for after an outbreak of foot-and-mouth disease killed cows and oxen widely used as draft animals, Konuma said. North Korea bought about 180,000 tons on the open market, with a further 80,000 tons coming from donors including Algeria, Myanmar, China and Russia.

“The price of maize has soared and it became very difficult for the North Korea government to keep the same quantity they need,” Konuma said.

Corn futures have jumped 46 percent in the past year. The FAO’s food index, a broader gauge of global prices, gained 26 percent in the 12 months to August to 231.13, close to its February record high of 237.68.

Starving Children

South Korea, which provided 400,000 tons of food aid to North Korea in 2006, discontinued shipments in 2009, the FAO said. The country faces an annual shortfall of about 1 million tons, and efforts to boost food production by 20 percent to become self-sufficient may be a decade away, Konuma said.

“We remain very concerned about the rapidly rising number of malnourished children,” Marcus Prior, a spokesman for the World Food Program, said at the same event. A famine in Africa that has killed tens of thousands of people and threatens the lives of 12.4 million in Somalia, Ethiopia and Kenya has diverted donor attention, he said.

“There is no doubt at the moment the Horn of Africa is the global priority,” Prior said. “It’s been a long time since we’ve had a famine to respond to, so there is always a decision to be made when you only have a pie to cut a certain way.”

Yacht, Fireworks

Former South Korean Unification Minister Hyun In Taek in April said the North’s plea for donations of food seemed to be politically motivated. The South regularly accuses members of the ruling Workers’ Party of Korea of indulging in luxurious lifestyles at the expense of ordinary people, with added concerns that aid is siphoned off by the military.

South Korea’s Yonhap news agency last month reported that Kim had enjoyed a sailing holiday on his yacht as the country struggled to cope with devastating floods. North Korea spent more than $6 million on fireworks to celebrate the birthday of its late founder, Kim Il Sung, Seoul-based Open Radio for North Korea said in May, citing unidentified people in China.

The North and South are still technically at war after their 1950-1953 conflict ended without a treaty. Signs of a thaw have emerged recently, with both sides agreeing on July 22 to try to revive the six-country nuclear talks.

South Korea’s Lee last month appointed Yu Woo Ik, a former ambassador to China, to oversee North Korean affairs. China is the North’s main ally and biggest benefactor.

‘Paradigm Shift’

“A paradigm shift” in South Korea’s policy toward the North is needed to revive the country’s agricultural productivity, Hong Joon Pyo, chairman of the ruling Grand National Party, said in a Sept. 7 speech. “To do this, South Korea can provide agricultural aid, help improve irrigation systems and operate joint farming projects in the North.”

North Korea has relied on outside handouts since the mid-1990s when an estimated 2 million people died from famine. Konuma visited North Korea from Sept. 11 to Sept. 14 at the invitation of the government. The FAO has a $5 million program to promote crop-seed production, improve agricultural statistics and prevent post-harvest losses of food.

--With assistance from Ben Richardson in Hong Kong. Editors: Ben Richardson, Tony Jordan

To contact the reporter on this story: Daniel Ten Kate in Bangkok at dtenkate@bloomberg.net

To contact the editor responsible for this story: Peter Hirschberg at phirschberg@bloomberg.net


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