Research Reports
Strategies for Agricultural Reform in North Korea and Inter-Korean Cooperation
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AuthorKwon, Taejin
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Publication Date2004.12.01
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Original
The purpose of this research is to come up with strategies for North Korean agriculture to make a soft landing in preparation of its pushing of reformation and open-policy. North Korea, which has a closed economy and a centralized administration, has started to expand its reformation and opening as of economic reform on July 1, 2002. North Korea reduced the food distribution and readjusted the price to a realistic level according to the cost-concept, of various supplies and services, that were provided at a low price. It also gave a sharp raise to the laborer's wage. Companies introduced the cost-concept, as a result broadening the management's sense of responsibility and autonomy. For follow up measure, it granted privileges to some areas and reorganized the farmer's market into a generalized market. In 2004, it introduced a individual farming practice for some collective farms. The out look of North Korea is that it will widen the reformation and opening economy in every fields.
Presuming the developments as above, this research set up a basic direction for the reformation as decentralization, decollectivization, marketization, and privatization; presenting the reformation direction and strategy of the agriculture. To begin with, the reformation of the agriculture has been divided into three categories, agricultural system, investment and financing, haman power and technology development. The system reformation is then divided into land ownership and utilization, farm management system and methods, agricultural marketing and price mechanism. Agricultural investment and finance is divided into agricultural finance, financing system, and investment. Finally haman power and technology development is divided into human power and development of agricultural technologies. When presenting the reformation strategies, it is explained by two stages, change within the system and fundamental change. Change within the system does not accompany structural change in system, however, fundamental change accompanies change in the system. The way to minimize the impact due to the reformation is to use the percepts of countries that have already experienced system transformation; first to increase the agricultural productivity through system reformation, then complete the reformation by reforming the distribution and price.
For North Korea to carry forward the reformation, there are several conditions in need but the most important matter is to ensure financial resources. A 25 billion dollars of financial resources, annually, needs to be invested for North Korea to have a 7% of annual economic growth. It is impossible for North to ensure this much financial resource on its own, thus borrowing financial resources from the international monetary organizations is inevitable. For this matter, North Korea would have a solve the nuclear problem in advance and restore the trust with the international society. Especially the inter-Korean cooperation is not only helpful in North Korea joining the international monetary organizations but also North Korea's economic development.
To speed up North Korea's reformation and opening in the agricultural field, assistance strategy needs to change from a humanitarian aid to a development assistance. Moreover, trade in farm products and economic cooperation needs to expanded. For this, getting rid of any institutional obstacles is the most important over anything. The wisdom to keep the our agricultural policy and policy for North Korea in harmony while speed up the trade and cooperation between South and North Koreas is necessary.
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