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Research Reports

KREI publishes reports through medium- and long-term research related to agricultural and rural policies, and through studies in various fields to promptly respond to current issues.

Inter-Korean Cooperation for the Development of Sericulture in North Korea

2006.07.01 28719
  • Author
    Kwon, Taejin
  • Publication Date
    2006.07.01
  • Original

This study aims to find the current state, policies, and potential of sericulture in North Korea, and analyze the feasibility of inter-Korean cooperation for the development of sericulture in North Korea. We have developed concrete strategies for better outcome from the cooperation.
North Korea was a major sericultural country until the early 1990s. 600,000 boxes of silkworm eggs were reared from 62,000ha of mulberry area, which produced 1,450 tons of raw silk. However, the productivity of the sericulture was very low. The International Fund for Agricultural Development (IFAD) estimates that North Korea has a potential to produce 5,000 tons of raw silk when the basis of sericulture is well developed.
South Korea's sericulture has been shrinking since the mid 1970s. There is no raw silk manufacture operating because domestic cocoons are not supplied. However, silk fabric and silk garment industries produce 300 million dollars worth of products each year.
Cocoon production has been increasing by 4.7% per year during the recent 20 years. However, among the total cocoon produced in the world, only 2% is being traded in the international market, because most sericultural countries utilize their own cocoons to produce raw silk. These characteristics cause relatively high fluctuations in the cocoon price. Major export countries are China and Uzbekistan. These countries export 60% of the total cocoons traded in the international markets.
Raw silk production has increased by 7.5% since 1988. China is a major producer and exports 80% of the total raw silk circulated in the international markets. India is a major importing country and imports 48% of the total raw silk traded in the international market. South Korea imports 8% of total raw silk. Recently international raw silk price has been hiked to 35~40 dollars per kilogram. Both supply and demand have affected the price increase. High price of the raw silk will be maintained for a while.
Silk industry transfers slowly from developed countries to developing countries. Sericultural technologies are not transferred easily among countries, and raw silk industry has a characteristic of being raw material-oriented. These characteristics block industry transfer among countries. However, for that matter, North Korea has good conditions for developing sericulture as a major industry.
It is desirable for North Korea to develop sericulture rather than raw silk or silk fabric industries. Productivity enhancement is more important than expanding mulberry area when developing sericultural industry. North Korea needs 2 stages of sericultural development strategy: the first stage is to restore sericulture production from the early 1990s, and the second stage is to set the level same as the IFAD's target.
For the cooperation between two Koreas, a wide range of fields is a possible target. Possible fields are as follows: exchange of mulberry and silkworm varieties, management of mulberry and silkworm, commercial trade of raw silk and silk fabric, direct investment of raw silk and silk fabric manufacture, training skilled laborers, market development, and etc. Also, there are several types of cooperations between the South and the North, such as assistance, trade, and commercial cooperation. We need to set the final target as an enhancement of commercial cooperation.
We suggest a desirable strategy for inter-Korean cooperation in sericulture. The first stage is to develop a civilian assistance program for agricultural materials in a small scale. Second stage is to increase assistance and initiate inter-government cooperation. A medium scale of pilot farm is desirable in this stage. Third stage is to develop infrastructure of sericulture through loan basis. Forth stage is to enhance commercial cooperation such as commercial trade, contract farming or contract production, and processing on commission. The final stage is to make joint ventures or to collaborate silk-related manufactures.
There are several financial sources for inter-Korean sericultural cooperation. The most important financial source is the Inter-Korean Cooperation Fund, which is supported by the South Korean government. The fund is available on grant or loan basis for assistance, trade, or commercial cooperation with North Korea. Official Development Assistance(ODA) or Economic Development Cooperation Fund(EDCF) can be possible sources when economic cooperation between two Koreas expands. Commercial assistance program is available from the Korea Development Bank.

Researchers: Kwon Tae-Jin, Suh Chong-Hyuk, Ji In-Bae
E-mail address: kwontj@krei.re.kr

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