The Australian Broadcasting Corporation said the video was taken by an undercover North Korean journalist over several months earlier this year and smuggled out of the communist country to China.
It shows filthy, orphaned children begging for food in the streets and a party official ordering a vendor at a private market to give her a donation of rice for the army -- once quarantined from food shortages.
"My business is not good," complained the stallholder.
"Shut up," replied the official. "Don't offer excuses."
One young North Korean soldier is filmed saying to the reporter's hidden camera that "everybody is weak".
"Within my troop of 100 comrades, half of them are malnourished," he said.
North Korea's 1.1-million-strong military, under the regime's "Songun" or "army first" policy, is usually given greater access to food than ordinary citizens.
But in June 2008, Seoul-based humanitarian group Good Friends reported that enlisted soldiers had been abandoning their posts due to a lack of food since April of that year, with some troops forced to skip meals.
The ABC said the exclusive video also showed labourers building a private railway track near the capital Pyongyang for ailing ruler Kim Jong-Il's son and apparent heir Kim Jong-Un.
"This rail line is a present from Kim Jong-Il to comrade Kim Jong-Un," the undercover journalist is told when he asks the building site supervisor what they are doing.
"The life of North Koreans has hit rock bottom," he said. "I feel very angry about the succession of Kim Jong-Un."
Japanese publisher Jiro Ishimaru, who instructed the undercover reporter on how to use the camera, told the ABC the footage was important because it showed Kim Jong-Il's regime weakening.
"It used to put the military first, but now it can't even supply food to its soldiers," Ishimaru, who edits a magazine featuring insider accounts of life in North Korea, said.
"Rice is being sold in markets but they are starving. This is the most significant thing in this video," he said.
Ishimaru works for Asia Press, a Tokyo-based network of independent journalists, which has a team of 10 North Korean volunteers who cover news deep inside the country.
Impoverished North Korea has requested overseas food and relief groups have said that the state faces imminent shortages, saying people are again eating grass and tree bark.
The United Nations has pleaded with international donors to overlook political difficulties in the face of a humanitarian crisis, saying six million people are in danger of not getting enough to eat.
Hundreds of thousands of North Koreans died in a famine in the 1990s, with North Korea depending on foreign aid to help feed its 23 million people since then.