A study on the relationship between international trade and food security: Evidence from less developed countries (LDCs)

Abstract

Hunger and poverty are main critical issues in less developed countries (LDCs) and can be attributed to the fact that almost 70% of the LDC populations are employed in the agricultural sector. Although the international trade can reduce food insecurity in LDCs, for example, facilitating the access to larger markets, the volatility in food prices since the late 2000s has negatively aff ected the food availability. Th is study examines the eff ects of trade on the food security and traces a U-shaped relationship between two variables, using 2000-2010 panel data for the LDCs. Th e results are robust across different methods and show that the food security decreases in the initial stages of the trade expansion but increases beyond a given threshold. Th e key fi nding of this study is the U-shaped relationship between trade and food security, which suggests that the policy makers should pay more attention to expanding investments in the agricultural productivity, particularly from the viewpoints of the self-suffi ciency and self-reliance.

Impact of Trade Openness on Food Security: Evidence from Panel Data for Central Asian Countries

“…The results in columns (1)–(4) show that TO has negative coefficients and TO 2 has positive coefficients, and both are statistically significant. Therefore, the estimation results of the panel data fixed effect model show a U-shaped relationship between trade openness and food security’s four pillars in Central Asian countries, which is similar to the results of Kang [ 43 ], but different from the findings of Fusco et al [ 14 ] and Dithmer and Abdulai [ 36 ]. The early stages of trade openness negatively impact food security, which implies that increased trade openness contributes to the redistribution of world production based on a comparative advantage due to trade and globalization [ 43 , 79 ].…”

“…Therefore, the estimation results of the panel data fixed effect model show a U-shaped relationship between trade openness and food security’s four pillars in Central Asian countries, which is similar to the results of Kang [ 43 ], but different from the findings of Fusco et al [ 14 ] and Dithmer and Abdulai [ 36 ]. The early stages of trade openness negatively impact food security, which implies that increased trade openness contributes to the redistribution of world production based on a comparative advantage due to trade and globalization [ 43 , 79 ]. Considering that trade openness means a change in relative prices of traded and non-traded commodities [ 38 ], the more a country becomes reliant on traded food, the more it will be inducting the “global food price” for related goods, and global inflation will more negatively influence its low-income groups, which spend most of their family income on food, resulting in increased food security risk [ 80 ], especially in transition economies such as Central Asian countries, where a perfect market-oriented economic system has not yet been established since achieving independence from the Soviet Union [ 24 , 81 ].…”

“…As indicated previously, this study aims to empirically analyze trade openness’s impact on food security in Central Asian countries by adopting a panel data fixed effect model as the baseline model. Considering the trade openness–food security relationship and the effect of other important potential determinants, and based on the model developed by Kang [ 43 ], Dithmer and Abdulai [ 36 ] and Fusco et al [ 14 ], we built the panel data fixed effect model as: where i and t denote Central Asian countries and time periods, respectively.…”

“…Additionally, reducing foreign dependency on food could significantly abate the conveyance of international market shocks to indigenous markets [ 31 ]. It has also been found in some relevant literature that there was a U-shaped relationship between trade openness and food security in less developed countries (LDCs), and food security has decreased in the initial stages of trade openness expansion but increased beyond a given threshold [ 43 ].…”

Measuring regional differences in food security from access and stability dimensions: A methodological proposal based on elasticities

“…The dimensions of access and stability have been considered the ones with greater impact. Access is related to the situation in which people have enough economic resources to get a proper nutrition, and stability is a situation in which they should not run the risk of being left without access to food as a result of sudden crises -economic and/or climatic -or cyclical events (Kang 2015). Higher food prices cause budget shocks that reduce the real income of families (Emery et al 2012), decreasing the amount of food purchased (Naylor and Falcon 2010) and affecting consumer preferences and the ability to decide on the food to be consumed (García-Germán et al 2018).…”