North Korea farm reforms: First step to a market economy?

North Korean farmers who have long been required to turn most of their crops over to the state may now be allowed to keep their surplus food to sell or barter in what could be the most significant economic change enacted by young leader Kim Jong Un since he came to power nine months ago.

The proposed directive appears aimed at boosting productivity at collective farms that have struggled for decades to provide for the country's 24 million people. By giving farmers such an incentive to grow more food, North Korea could be starting down the same path as China when it first began experimenting with a market-based economy.

Two workers at a farm south of Pyongyang told The Associated Press about the new rules on Sunday, saying they were informed of the proposed changes during meetings last month and that they should take effect with this year's upcoming fall harvest. The Ministry of Agriculture has not announced the changes, some of which have been widely rumored abroad but never previously made public outside North Korea's farms.

RECOMMENDED: How well do you know North Korea's new leader? Take the quiz

Farmers currently must turn everything over to the state beyond what they are allowed to keep for their families. Under the new rules, they would be able to keep any surplus after they have fulfilled state-mandated quotas — improving morale and giving farmers more of a chance to manage their plots and use the crops as a commodity.

"We expect a good harvest this year," said O Yong Ae, who works at Migok Cooperative Farm, one of the largest and most productive farms in South Hwanghae Province in southwestern North Korea. "I'm happy because we can keep the crops we worked so hard to grow."

The outside world has been watching closely to see how Kim's rule will differ from that of his autocratic father, Kim Jong Il, who died in December, and how he will deal with the country's chronic food shortages.

The proposed changes mimic central elements of China's rural reform in the late 1970s and early 1980s, when China allowed farmers to hold onto their surplus after meeting state quotas, John Delury, an assistant professor at Yonsei University in South Korea who specializes in Chinese and North Korean affairs, said Monday.

The result for China: a significant boost both for the economy and then-leader Deng Xiaoping's popularity.

"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."

Kim Jong Un, who inherited a nation with chronic food, fuel and power shortages, has made improving the economy a hallmark of his nascent rule. In his first public speech in April, he openly acknowledged economic hardship in North Korea, and pledged to raise the standard of living.

The young leader, who is the third generation of his family to lead North Korea since his grandfather founded the communist state in 1948, has already has made some significant changes. He dismissed his father's army chief and promoted a younger general. He has also been presenting a much more accessible public persona, appearing among the masses with his wife and giving televised speeches, something his father shunned during his time in power.

1 | 2

Next