Impact of Trade Openness and Climate Change on Food Productivity in Nigeria

Abstract

Liberal trade regimes could help improve food productivity if environmental concerns such as adverse weather conditions that affect agriculture are addressed. This issue has not received adequate empirical scrutiny as linear models dominate extant literature. In this article, we check whether accounting for trade and climate change asymmetries is important in explaining food productivity in Nigeria. Using a nonlinear autoregressive distributed lag (ARDL) model, the existence of asymmetry was established in the long run but not in the short run. The long-run estimates show that high rainfall variability increases food production, but the reverse is the case in the short run where the decomposed shocks exert a negative impact. An increase in the volume of trade boosts food production in the long run, whereas the contemporaneous estimates reveal that lower trade flows enhance food productivity. The findings have important implications for food policy formulation and implementation. JEL: F18, Q18, Q56

The Influence of Economic Uncertainty on Food Security and the Moderating Role of Trade Openness in Developing Countries

“…In turn, it benefits food security as lower prices make food more accessible, while a greater variety of food options improves food stability by reducing reliance solely on domestic production. This study supports evidence from previous observations (Adamchick & Perez, 2020;Dithmer & Abdulai, 2017;Fusco et al, 2020;Marson et al, 2022;Shuaibu, 2021;Sunge & Ngepah, 2022), These studies found that trade openness enhances food security. Trade openness improves food security because international trade plays a crucial role in stabilizing agricultural production, not only at a global level but also within nations or regions.…”

“…Interestingly, these effects are primarily attributed to the import component rather than income, indicating a direct influence. Several other studies, such as those by Adamchick & Perez (2020); Dithmer & Abdulai (2017); Fusco et al (2020); Shuaibu (2021); Sunge & Ngepah (2022) have also yielded similar results, demonstrating the positive influence of trade openness on food security. However, it is worth noting that not all studies reach the same conclusions.…”

The impacts of climatic conditions on cereal production: implications for food security in Africa

“…The plausible explanation is that if environmental concerns are addressed, liberal trade policies improve the productivity of agriculture. For instance, by regulating the effects of adverse weather conditions on crops, trade openness among countries can help boost food production (Shuaibu, 2021 ). Besides, we find that increased farmed cereal area significantly promotes cereal production.…”

Climate Change and Macro Prices in Nigeria: A Nonlinear Analysis

“…Following Huh and Park (2013) on the relevant regressors for Food Prices (fp) in this study, I specify fp = f (exr, ms, ir, to, cc) where (i) the Exchange Rate (exr) against the dollar can affect local food prices by altering import prices, (ii) Money Supply (ms) is included to reflect inflationary pressures on the general price level, (iii) Interest Rate (ir) is incorporated because a change in interest rate changes demand for money and hence food prices (high interest rates reduce firms' desire to carry inventory (Frankel 2014), and (iv) International trade (to) is included, first because Nigeria is an open economy and second, because high food prices could engender increased import and vice versa (Lee et al 2021). Finally, (v) Climate Change (cc) variable (average temperature) is included because climate change affects food production and food prices (Shuaibu 2020).…”