The rise of privately produced food sold in North Korean markets has slowly overtaken state-run Public Distribution System as the primary distributor of food
* FAO warned of major North Korean drought threat in July
* Ag analysts, defectors say late rains mean crop yields steady
* Growth of private food markets mean N.Korea more resilient
By James Pearson
SEOUL, Sept 18 (Reuters) - Late summer rains and the growing importance of privately produced crops mean North Korea will likely avoid acute food shortages this year despite earlier fears of drought and mounting international sanctions, defectors and experts say.
The U.N.'s Food and Agriculture Organisation (FAO) warned in July of the worst drought in 16 years in the country, saying there were "serious concerns" about a lack of rainfall in key cereal-producing areas.
"People said they delayed planting because it was too dry in the early spring, but right after that it rained," said Kang Mi-jin at the Seoul-based Daily NK, a website run by defectors.
"Crop conditions are fine now," said Kang, who said she had cross-checked the news of the harvest with several sources still inside North Korea.
Weather data for areas in China that border North Korea's main crop zones show rains picked up from August, helping to alleviate dry conditions.
U.S. Department of Agriculture satellite images suggest North Korea's crop yields will be similar to last year, said Kim Young-hui, a North Korean defector and a specialist in the country's economy at Korea Finance Corp in Seoul.
North Korea experienced a crippling famine in the 1990s when a combination of bad weather, economic mismanagement and the demise of fuel subsidies from the Soviet Union all but destroyed its state-run Public Distribution System (PDS) of rationing.
The FAO report, which described the PDS as the "main source of food" for around 70 percent of the population, said increased food imports would be required to ensure adequate food supplies for the most at-risk groups, including children and elderly.
FOOD SECURITY IMPROVES
However, the rise of privately produced food sold in North Korean markets has slowly overtaken the PDS as the primary distributor of food, a factor which experts say official U.N. reports overlook.
The reports, often produced in conjunction with the North Korean government, may not be able to focus on markets given the political sensitivity of inherently capitalist activity in a state which still outwardly professes to maintain a Soviet-style command economy, experts say.
"Many people rely completely on the markets and off-the-books private farming for their food," said Sokeel Park of Liberty in North Korea, an organisation which aids defectors.
"Corrupt officials will also siphon off government supplies and sell them for profit," said Park. "This means international agencies' regurgitation of Pyongyang's official food data should be taken with a pinch of salt".
In the years since the famine, farmers have also been granted increasing autonomy at local levels to proactively change crops, staving off the risk of food shortages, and reducing the reliance on imports.
North Korea's grain imports totalled $26.5 million in 2016, down from $139.2 million in 2012, according to the state-run Korea Trade-Investment Promotion Agency. January to June imports this year were just $10.6 million, albeit up sharply on the $3 million over the same period a year go.
Prices in North Korean markets have remained relatively stable and continue to be a reliable source of food, according to defectors who closely monitor North Korean market prices and activity.
The U.N.'s World Food Programme (WFP) said there was still very little direct information available on how important markets are for household food access. WFP was consulting with the North Korean government to carry out more detailed studies on food security later this year, it said in an emailed response to questions.
Another threat to North Korea's food security was an increase in U.N. sanctions following the country's sixth and largest nuclear bomb test earlier this month.
The U.N. Security Council unanimously agreed to a range of new measures including imposing a ban on the country's textile exports and capping imports of crude oil and fuel.
Gasoline and diesel prices rose sharply since the nuclear test, market data analysed by Reuters on Monday showed.
The sanctions were likely to hit essential items such as oil, sugar, salt, vinegar and milk powder, which are imported, controlled centrally and distributed via state shops at subsidized prices, the WFP said.
But in contrast to more developed countries, agriculture in North Korea relies much more on mass-mobilisation of workers rather than mechanisation such as harvesters and tractors.
So while a lack of oil would likely slow the harvest, the overall impact would not be significant, according to Linda Lewis of the American Friends Service Committee, an NGO running farm projects in North Korea.
"Fuel shortages are not a new problem, and North Korean farmers are quite resourceful," Lewis said. (Additional reporting by Hyonhee Shin, Soyoung Kim and Haejin Choi; Editing by Lincoln Feast)
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