Soaring global food prices and reluctant donors are pushing North Korea back toward 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 neighboring China since a famine in the late 1990s that experts estimate killed at least 1 million people, he said. Noland told a panel in Washington that after neglecting to reform, reimposing state controls on some trading and kicking out most foreign aid groups, "North Korea is on the precipice of a famine" that would be less severe than in the 1990s. Pyongyang's 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. North Korea also lost crops and farmland last year to floods. A senior official with the UN World Food Program, which earlier this month warned of a food crisis in North Korea, said that in some places the price of rice had more than doubled in a year with 1 kg (2.2 pounds) costing about one-third of the monthly salary of an average North Korean worker. FOOD SHORTFALL The UN Food and Agriculture Organization said in late March it expected North Korea to have a shortfall of about 1.66 million ton(ne)s 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 UN 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 fertilizer shipments, with few questions asked -- the price the South was prepared to pay for stability of the Korean peninsula. 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 program and is unlikely to bend in disarmament bargaining due to the food crisis, analysts have said. Noland and Haggard said North Korea would "ultimately weather this challenge politically by ratcheting up repression and scrambling, albeit belatedly, for foreign assistance." But without fertilizer 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. (Additional reporting by Paul Eckert in Washington) (Editing by Jonathan Thatcher, Alex Richardson and Peter Cooney) Story by Jon Herskovitz REUTERS NEWS SERVICE