N. Korea seen heading towards famine

Soaring global food prices and reluctant donors are pushing North Korea back towards famine, which could see the secretive government turn even more repressive to keep control, a paper released on Wednesday said.

"The country is in its most precarious situation since the end of the famine a decade ago," said the paper from the Washington-based Peterson Institute for International Economics.

Stephan Haggard, who wrote the paper with Marcus Noland, said the sharp increase in world prices for commodities had sent ripples through the communist state's economy.

The authors are specialists in reclusive North Korea's trade with the outside world.

"The North Korean rice market is much more integrated with world markets than most people think," Haggard, a professor at the University of California, San Diego, said by telephone.

North Korea, which even in time of good harvests is about 20 percent short of what it needs, has grown more dependent on rice imported from neighbouring China since a famine in the late 1990s that experts estimate killed at least 1 million people, he said.

Its limited foreign currency reserves, and poor reputation as a trade partner, mean the rice trade is being hit and ordinary North Koreans are feeling the squeeze, Haggard said.

On top of that, North Korea also lost crops and farmland last year to floods.

A senior official with U.N. World Food Programme, which earlier this month warned of a food crisis in North Korea, said that in some places the price of rice has more than doubled in a year with 1 kg costing about one-third of the monthly salary of an average North Korean worker.

FOOD SHORTFALL

The U.N. Food and Agriculture Organisation said in late March it expected North Korea to have a shortfall of about 1.66 million tonnes in cereals for the year ending in October 2008, which would be the largest deficit in about seven years.

North Korea has in the past relied heavily on aid from China, South Korea and U.N. aid agencies to fill the gap.

But the new conservative government in South Korea has said it will tie aid to progress its capricious neighbour makes in giving up development of nuclear weapons - on which Pyongyang is stalling.

Under previous left-of-centre governments in Seoul, the North could expect about half a million tonnes of rice and massive fertiliser shipments, with few questions asked - the price the South was prepared to pay for stability of the Korean peninsula.

And China has its own problems keeping runaway grain prices under control, which means it cannot afford to be as generous this year.

North Korea has been successful in separating appeals for humanitarian aid from international talks on ending its nuclear weapons programme and is unlikely to bend in disarmament bargaining due to the food crisis, analysts have said.

Noland and Haggard said North Korea will "ultimately weather this challenge politically by ratcheting up repression and scrambling, albeit belatedly, for foreign assistance".

But without fertiliser and other aid to help farm production it may be too late to avoid deaths from hunger in the country of some 23 million, they added.