Global Changes Skew Calculus Of Food Aid For N. Korea

By Blaine Harden
Washington Post Foreign Service
Saturday, March 15, 2008; A01

SEOUL -- A grim rite of spring in Northeast Asia is the calculation of how many North Koreans could starve before the fall harvest -- and what the neighbors are willing to do about it.

This year, though, the famine bailout season is more urgent, more complicated and more politically explosive than at any time since the mid-1990s, when millions starved behind North Korea's closed borders.

Severe crop failure in the North, surging global prices for food and tougher behavior by donors, particularly South Korea and China, are putting unaccustomed pressure on Kim Jong Il's dysfunctional communist state.

"For Kim Jong Il, this will be his most difficult year," predicts Park Syung-je, a scholar at the Asia Strategy Institute in Seoul, referring to the North's dictator. "North Korea does not have much choice for food."

The threat of a calamitous 1990s-style famine has fallen substantially because of the emergence of grass-roots private markets across North Korea and a U.N. system for nutrition monitoring. Still, large numbers of people stand to suffer severe hardship, although probably not death, joining the ranks of the millions of North Koreans who go hungry even when harvests are good and food aid arrives.

Roughly a third of children and mothers are malnourished, according to a recent U.N. study. The average 8-year-old in the North is seven inches shorter and 20 pounds lighter than a South Korean child of the same age.

This year is anything but good. Floods last August ruined part of the main yearly harvest, creating a 25 percent shortfall in the food supply and putting 6 million people in need, according to the U.N. World Food Program.

Over the winter, drought damaged the wheat and barley crop, according to a recent report in the official North Korean media. That crop normally tides people over during the summer "lean season" until the fall harvest.

North Korea's ability to buy food, meanwhile, has plunged, as the cost of rice and wheat on the global market has jumped to record highs, up 50 percent in the past six months.

Equally important for North Korea, its reliably generous neighbors seem to be operating under new, less tolerant rules for charity.

For nearly a decade, South Korea had led the world in providing assistance to the North, while setting almost no conditions on aid and asking few questions about who was getting it.

But South Korea's new president, Lee Myung-bak, wants to condition some of his country's gifts of food and fertilizer on progress in removing nuclear weapons from the North, on improvements in human rights and on guarantees that food will go to poor people, not to the North Korean military.

While South Korea will probably end up providing some aid without conditions, a long and politicized debate in Seoul about how much to give and under what conditions is delaying delivery.

"I will not rush but wait until the time is ripe," South Korea's new minister of unification, Kim Ha-joong, told reporters this week.

It seems unlikely that South Korean fertilizer -- a key to preventing crop failure in the coming fall harvest -- will arrive in time for planting, analysts here say.

"Crunch time for fertilizer is now, but negotiations haven't even begun to arrange for delivery," said Lim Eul-chul, a North Korea specialist at Kyungnam University in Seoul. "This means that North Korea's dependency on China has to grow."

But China, the North's closest ally and main trading partner, also seems to be stiffening its food policies.

It has quietly slashed food aid to North Korea, according to figures compiled by the World Food Program. Deliveries plummeted from 440,000 metric tons in 2005 to 207,000 tons in 2006. Last year there was a slight increase in aid, but it remained far below the levels of the past decade.

The reason for the cuts has not been made public, but some analysts believe it is related to North Korea's decision in 2006 to detonate a nuclear device. "China decided to punish the North Koreans," said Andrei Lankov, a professor who specializes in North Korean studies at Kookmin University in Seoul.

The nuclear explosion led the Bush administration to begin negotiating directly with Kim's government. But it also brought on a drastic reduction in the willingness of the United States and much of the rest of the world to give food to North Korea.

Total donations under a World Food Program project declined by more than 80 percent between 2005 and 2007, and U.S. donations fell to zero.

China also appears to have tightened its food squeeze on North Korea for domestic reasons. In order to meet local demand and control inflation, Beijing slapped a 22 percent tariff on grain exports to the North.

China is by far the country's major source of food imports, and the tariffs have resulted in higher prices and less grain in markets across North Korea, according to several aid groups.

Still, if hunger inside North Korea threatens to become widespread famine, China -- host for the Summer Olympics in August -- is certain to rush in large amounts of food, according to diplomats and aid experts.

"China will be elastic," said Lankov, a Russian who studied in the North and is a periodic visitor there. "They are unhappy with North Korea and they want to keep pressure on Kim, but they don't want collapse and they don't want to risk a refugee mess on their border during the Olympics."

In the 1990s, weather-related crop failures in North Korea combined with a reduction in aid from China and from states of the collapsed Soviet Union to cause widespread famine that killed an estimated 2 million people. Since then, though, the risk of famine has fallen substantially, according to food aid specialists and political analysts.

Behind its closed borders, the country has undergone a fundamental change. Analysts say North Korea now has two economies: the crumbling state system, which often fails to pay salaries and supply food, and a growing network of neighborhood markets, where people buy and sell, free of government controls. Kim's government grudgingly tolerates these places.

In the markets -- despite periodic police raids and crackdowns -- euros and dollars can buy Chinese gadgets and clothes. Local and imported food is also available for purchase or barter and would no doubt increase, arriving illegally if necessary, in response to a sudden spike in demand.

"You will never see mass starvation again," said Lee Seung-yong, secretary general of Good Friends, a Seoul-based charity with contacts across the North. "Except for some isolated areas, people have found ways to survive. They know they cannot depend on the government."

Institutionally, mechanisms are in place in North Korea to ring the international alarm bell before hunger turns into mass starvation. The World Food Program monitors nutrition in 50 counties, and the Kim government has become expert in asking for help.

But while famine is much less likely than in the 1990s, so is loyal public tolerance of food shortages, analysts and aid officials say.

These experts agree that cynicism and restiveness have increased because of the highly visible failings of Kim's government, the willingness of poorly paid police to take bribes and the now-proven ability of markets to deliver food and other goods that the state cannot provide.

"There is a small but growing potential of rebellion if the food supply dries up -- and Kim's government knows it," said Lankov, echoing several other analysts and aid experts.

All this could make the coming summer a test of Kim's ability to procure food and keep the lid on inside North Korea while maintaining good relations with his most important patron, China.

Unless foreign aid arrives, food shortages are expected to worsen just as Beijing begins to host the Olympics.

Special correspondent Stella Kim contributed to this report.

As Prices Soar, U.S. Food Aid Buys Less

By CELIA W. DUGGER

Soaring food prices, driven in part by demand for ethanol made from corn, have helped slash the amount of food aid the government buys to its lowest level in a decade, possibly resulting in more hungry people around the world this year.

The United States, the world’s dominant donor, has purchased less than half the amount of food aid this year that it did in 2000, according to new data from the Department of Agriculture.

“The people who are starving and have to rely on food aid, they will suffer,” Jean Ziegler, who reports to the United Nations on hunger and food issues, said in an interview this week.

Corn prices have fallen in recent months, but are still far higher than they were a year ago. Demand for ethanol has also indirectly driven the rising price of soybeans, as land that had been planted with soybeans shifted to corn. And wheat prices have skyrocketed, in large part because drought hurt production in Australia, a major producer, economists say.

The higher food prices have not only reduced the amount of American food aid for the hungry, but are also making it harder for the poorest people to buy food for themselves, economists and advocates for the hungry say.

“We fear the steady rise of food prices will hit those on the front lines of hunger the hardest,” said Josette Sheeran, executive director of the United Nations World Food Program. The United States is the biggest contributor to the agency.

She warned that food aid spending would have to rise just to keep feeding the same number of people. But the appropriations bill for the coming year now moving through Congress does not promise any significant increases in the food aid budget.

The impact of rising food prices on food aid is part of a broader debate about the long-term impact on the world’s poorest people of using food crops to make ethanol and other biofuels, a strategy that rich countries like the United States hope will eventually reduce dependence on Middle Eastern oil.

Some advocates for the poor say rising food prices could benefit poor farmers in developing countries, providing them with markets and decent prices for their crops. But others warn that the growing use of food crops to make fuel, especially if stoked by large subsidies in rich countries, could substantially increase food prices. That could push hundreds of millions more poor people into hunger, especially landless laborers and subsistence farmers, according to a recent article in Foreign Affairs magazine. The authors were Benjamin Senauer and C. Ford Runge, food policy analysts and professors at the University of Minnesota.

Production of food crops to make biofuels will also tend to favor growers with plenty of capital and large land holdings, they say, rather than small-scale, impoverished farmers lacking modern grain storage facilities in poor countries. “The policies put in place are going to be crucial to whether the small producer and the people who live where hunger is concentrated can benefit,” Mr. Senauer said.

But for now food aid is suffering, as are poor people in poor countries, economists say. And their situation may get even tougher next year, relief agencies warn. The United Nations Food and Agriculture Organization is projecting that low-income countries reliant on food imports, including most of sub-Saharan Africa, will see the amount they pay to import cereals rise 14 percent.

The world’s ability to absorb fresh price shocks has shrunk along with food stocks. “We’re very worried,” said Henri Josserand, who heads the organization’s global information and early warning system. “World food stocks are much smaller than they used to be.”

The food aid declines may also continue. Catholic Relief Services, a major distributor of American food aid, has projected substantial increases in what the federal government pays for food aid next year, based on an analysis of the futures market for the wheat, corn and soybean products that are mainstays of aid. “It’s bad news and it’s not just going to affect U.S. food aid, but food aid from every source,” said Frank Orzechowski, a retired commodity trader who now advises Catholic Relief Services.

This year’s decline in food aid follows a period when the sharply escalating costs of shipping American-grown food aid to Africa and Asia already reduced the tonnage supplied. The United States Government Accountability Officementnd this year that the number of people being fed by American food aid had declined to 70 million in 2006 from 105 million in 2002, mainly because of rising transportation and logistical costs.

Now food prices are also playing a role. New data from the Department of Agriculture show that the cost of food for the federal government’s main food aid program, Food for Peace, rose 35 percent over the past two years.

The amount of food bought for American food aid programs has fallen to 2.4 million metric tons this year from 4 million metric tons in 2005 and 5.3 million metric tons in 2000. Thomas Melito, who supervised the Government Accountability Office’s food aid investigation this year, called the escalating costs of food aid “frightening.”

“In a situation where there are 850 million hungry people in the world and the program was only providing enough for 70 million people in 2006, the new totals will be even lower,” he said.

Congress is considering changes to the food aid program as part of the omnibus farm bill that some economists and advocates for the hungry say would improve the efficiency of the program and allow it to feed more people. They point to a Bush administration proposal that would allow the government to use up to $300 million of the food aid budget to buy food in African countries close to hunger emergencies rather than shipping it from the United States on mainly American-flagged vessels as current law requires.

In his speech to the United Nations this week, President Bush said the proposal would speed delivery and help provide a market for poor farmers in developing countries.

The House version of the farm bill includes no such provision. The Senate Agriculture Committee has not produced a farm bill.

“To my mind, that’s the way out of this pincer,” said Emmy Simmons, an agricultural economist and retired senior manager at the United States Agency for International Development.

“But the shipping guys are hanging tough,” she added. “They’re defending that little chunk of revenue. They aren’t super concerned whether you feed less people.”

Groups representing shipping companies and agribusiness interests have opposed using the budget of the main food aid program to buy food in developing countries instead of relying on American food shipped overseas.

Gloria Tosi, who represents most of the American ship owners involved in the food aid system, said buying commodities abroad would erode domestic political support for the program and lead to lower food aid budgets from Congress. She said it was “politically naïve” to think the food commodity groups and ship owners that have for decades supported food aid in Congress would favor buying commodities abroad.

“None of us will be working toward that,” she said.