North Korea back on the brink of famine - study

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By Jon Herskovitz

SEOUL, Nov 4 (Reuters) - North Korea has fallen into a grain deficit that has caused food prices to shoot up, its citizens to die from a lack of food and pushed the impoverished state to the brink of famine, a study obtained on Tuesday said.

The problem has been exacerbated by donors cutting food and fertiliser aid in response to Pyongyang ratcheting up security concerns, according to the study by Marcus Noland and Stephan Haggard for the U.S.-based Peterson Institute for International Economics.

"North Korea is once again poised on the brink of famine," the two experts said in their paper on the North's economy.

The authors said that although hunger-related deaths are occurring, they doubt the tally will come close to matching the 1990s famine, which killed as many as 1 million of the North's then 22 million people.

The first reason is that Pyongyang, which now works with international relief agencies, was slow to admit the problem in the 1990s and seek help.

The second is that even in its degraded state, the market aspects of the North Korean economy function better than they did a decade ago, the report said.

The U.N. World Food Programme last month warned of a humanitarian crisis in North Korea because food aid was drying up and stocks were low.

The U.N. Food and Agriculture Organisation (FAO) said in late March it expects North Korea to have a shortfall of about 1.66 million tonnes in cereals for the year ending in October 2008, the largest deficit in about seven years. The North needs about 5 million tonnes to feed it people, experts have said.

The study looked at grain quantities, prices and direct observation of the North's precarious food situation and said the shortfalls estimated by U.N. agencies "are almost certainly exaggerated" due to a lack of proper data.

"Nonetheless, even after making appropriate adjustments, we find for the first time since the 1990s famine, the aggregate grain balance has gone into deficit," the paper said.

North Korea has relied on food handouts from South Korea, China, the WFP and others for years to get by.

"It looks to us like aggregate supply is on a knife's edge. That means that stuff has to be spread around incredibly equitably to avoid some serious localised shortages and deaths," Haggard said by telephone from California.

Flooding over the past few years and the South's decision to suspend fertiliser aid in response to Pyongyang failing to live up to the terms a of nuclear disarmament deal have pushed down domestic production.

Haggard said he saw a recurrence of the food problems going into next year at least.

"The long-run solution to North Korea's chronic food insecurity lies in a political settlement of the nuclear issue and reforms that would open and revitalise the economy," the study said.

(Reporting by Jon Herskovitz; Editing by Paul Tait)

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