Analysts say the reforms are designed to increase agricultural output, reduce reliance on expensive imports, reduce malnutrition and halt rising food prices. Previously, farmers have been required to sell all their produce to the government which then distributes it to the population.
The reforms are expected to be debated by the Supreme People’s Assembly when it convenes in Pyongyang on Tuesday.
The move is a reversal of the crackdown on private production that was introduced by Kim Jong-il, the former North Korean leader, in 2005 and suggests that his son and heir, Kim Jong-un, is continuing reforms in an effort to improve the lot of the impoverished nation and its people.
The proposed changes mimic China’s rural reform in the late 1970s and early 1980s, when China allowed farmers to hold onto their surplus after meeting state quotas, said John Delury, an assistant professor at Yonsei University in South Korea.
“Of course, a major difference between the two cases is that the vast majority of the Chinese population were farmers at the time,” he said. North Korea has fewer farmers and less arable land, and “will have to find its own formula for successful development.”
North Korea’s present system has proved to be uncertain in the past and at times collapsed entirely, such as in the famine that gripped the country in the mid-1990s and contributed to the deaths of as many as 3.5 million people from starvation.
“Peasants will have incentive to grow more food,” an unnamed North Korean source told Reuters. “They can keep and sell in the market about 30-50 percent of their harvest depending on the region.”
Other reports from North Korea have put the amount that farmers will be able to sell privately as high as 70 per cent.
“These reforms are designed to provide incentives to the farmers to produce more from their land and to help feed the country,” Toshimitsu Shigemura, a professor at Tokyo’s Waseda University and expert on North Korea, told The Daily Telegraph.
Yet he anticipates new problems arising from the change of direction, in much the same way as the disastrous revaluation of the currency in 2009 caused most people to lose their life savings.
“It will be very difficult to change North Korea’s deeply bureaucratic system and enable farmers to be free,” he said. “There is also the question of where they will be able to get fertilisers for soil that has been badly managed for decades, as well as modern farming machinery.
“There is no way for farmers to be able to secure sufficient investment and I expect these changes will simply lead to an explosion in the North Korean underground economy,” he said.
Trading on the black market will raise prices and could lead to further shortages of basic foodstuffs, Professor Shigemura warned.
Speaking to the Associated Press news agency, two workers at a farm south of Pyongyang said they were told about the new rules last month and they should take effect with this year’s upcoming full harvest.
“We expect a good harvest this year,” said O Yong Ae, who works at Migok Cooperative Farm in South Hwanghae Province, in southwestern North Korea, among the region’s largest and most productive farms. “I’m happy because we can keep the crops we worked so hard to grow.”
According to estimates by the United Nations, North Korea requires around 5 million tons of grain and potatoes each year to feed a population of 24 million, but in the last two decades has fallen well short of reaching that figure from domestic sources.