Yes, it's well known that entire families are punished for the "crimes" of a individual. There was an article a while back that tells the story of a child that was actually born in prison and who eventually escapes NK. Chilling story.
As for eating corn out of pig shit, it's not that much of a stretch. During the last famine, eating grass was commonplace.
Not to mention a recent story where Kim Jong Un had his ex-girlfriend and colleagues shot, then had their families shipped off to a prison camp. Wow, no wonder Dennis Rodman likes hanging with that guy.