Trade, policy, and food security

Smith, Vincent H.; Glauber, Joseph W.

doi:10.1111/agec.12547

Cited by 61 publications

(45 citation statements)

References 41 publications

(47 reference statements)

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“…The effect of food inflation on the number of people with insufficient food consumption is found to be weaker across upper-middle-income economies compared to that in low-income countries. This finding both supports Hypothesis 3 and agrees with Frankenberg and Thomas [168] and Smith and Glauber [69], who revealed that higher prices for staple foods aggravated poverty traps for low-income households, but might not have much effect on the food security status of relatively well-off households. On the other hand, domestic price volatility may be exacerbated by trade restrictions that have been implemented by some Group 2 and Group 3 countries on the backdrop of the COVID-19 outbreak.…”

Section: Discussionsupporting

confidence: 89%

“…In Group 1 countries, the strongest influence over Y is exerted by food availability and food access parameters, X 2 and X 3 , respectively. With a rise in income level, a portion of imported food in consumption increases due to importing higher-quality and pricier products [68][69][70], whereas the fluctuations in world prices and import volumes exert stronger effects on the food security status of the households compared to those of domestic supply. In a situation when global food supply chains are disrupted by currency exchange volatilities and trade restrictions amid the COVID-19 pandemic, we assume that: Hypothesis 3.…”

Section: Study Hypothesesmentioning

confidence: 99%

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Impacts of COVID-19 on Trade and Economic Aspects of Food Security: Evidence from 45 Developing Countries

Erokhin

Tianming

2020

IJERPH

237

173

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The stability of food supply chains is crucial to the food security of people around the world. Since the beginning of 2020, this stability has been undergoing one of the most vigorous pressure tests ever due to the COVID-19 outbreak. From a mere health issue, the pandemic has turned into an economic threat to food security globally in the forms of lockdowns, economic decline, food trade restrictions, and rising food inflation. It is safe to assume that the novel health crisis has badly struck the least developed and developing economies, where people are particularly vulnerable to hunger and malnutrition. However, due to the recency of the COVID-19 problem, the impacts of macroeconomic fluctuations on food insecurity have remained scantily explored. In this study, the authors attempted to bridge this gap by revealing interactions between the food security status of people and the dynamics of COVID-19 cases, food trade, food inflation, and currency volatilities. The study was performed in the cases of 45 developing economies distributed to three groups by the level of income. The consecutive application of the autoregressive distributed lag method, Yamamoto’s causality test, and variance decomposition analysis allowed the authors to find the food insecurity effects of COVID-19 to be more perceptible in upper-middle-income economies than in the least developed countries. In the latter, food security risks attributed to the emergence of the health crisis were mainly related to economic access to adequate food supply (food inflation), whereas in higher-income developing economies, availability-sided food security risks (food trade restrictions and currency depreciation) were more prevalent. The approach presented in this paper contributes to the establishment of a methodology framework that may equip decision-makers with up-to-date estimations of health crisis effects on economic parameters of food availability and access to staples in food-insecure communities.

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Section: Discussionsupporting

confidence: 89%

Section: Study Hypothesesmentioning

confidence: 99%

Impacts of COVID-19 on Trade and Economic Aspects of Food Security: Evidence from 45 Developing Countries

Erokhin

Tianming

2020

IJERPH

237

173

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“…Smith and Glauber [8] indicated that food insecurity is extensive throughout the world, and hunger and malnutrition are expected to remain serious political concerns particularly in low-income developing countries where many rural and urban households are both income and asset poor. The authors showed that free trade policies allow countries to exploit their comparative advantages in economic activity, thereby increasing average per capita incomes, longer-term growth rates, and a country's capacity to fund social safety nets for the poor.…”

Section: Domestic Food Policies In the Selected Countriesmentioning

confidence: 99%

Food Trade Openness and Enhancement of Food Security—Partial Equilibrium Model Simulations for Selected Countries

2021

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This research measured the welfare impacts of food trade liberalization in India, Egypt, Pakistan, Saudi Arabia, and the United Arab Emirates (UAE) using the partial equilibrium model—World Integrated Trade Solution (WITS). Macroeconomic settings, domestic policy objectives, and food security indicator data are used to assess the implications of the simulations on food availability and stability. Simulation results for India, Egypt, and Pakistan indicate annual welfare gains (consumer surplus) of 2571, 340, and 25 million USD, respectively, while Saudi Arabia and the UAE have gains of 14 and 17 million USD. Results show that tariff elimination would have wide-ranging welfare impacts across food commodities within these countries. Moreover, reductions for specific commodities directly relevant to food energy and protein availability would have a greater direct impact on the poor. Lowering the highest tariffs on those commodities might raise the real incomes of more than 350 million persons by 7.5% or more and could create shifts in consumption towards more diversified and nutritionally sound diets.

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“…Current researchers of commodity markets outline various factors directly or indirectly influencing the real asset prices. Among them are international trade and factors related to trade distortion (export bans, tariffs, and other barriers; Rutten et al, 2013;Smith and Glauber, 2020), currency volatility (Buberkoku, 2017), oil prices (Taghizadeh-Hesary et al, 2019;Zmami and Ben Salha, 2019), and speculators' activities, including heavy investment in futures, which result in grain market financialization (Seddon, 2019;Aït-Youcef, 2019). Other factors of the food commodity market dichotomy are the mismatch between exchange storage and commercial storage rates (Garcia et al, 2015;van Huellen, 2018).…”

Section: Speculation and Financialization: Is Regulation Effective?mentioning

confidence: 99%

Islamic finance and food commodity trading: is there a chance to hedge against price volatility and enhance food security?

Kalimullina

Orlov

2020

Heliyon

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This paper evaluates current food commodity trading from the Shariah point of view, which is particularly relevant for the MENA region. It focuses on futures contracts as the main instrument for grain trading and analyzes the traders' activities. Through a qualitative and multifaceted approach, the paper accumulates and evaluates the suggestions for 15 Shariah-based alternatives to futures by contemporary researchers. Sukuk, commodity funds and takaful programs are among potential structures that could be developed and broadly implemented. The research compares the current criticism of futures markets with the opinions of Islamic scholars and researchers, as well as Shariah standards. The paper also evaluates several recent suggestions by researchers to raise the efficiency of the international commodity trading market for the sake of food security. The results show that there is space for cooperation taking into account Islamic financial principles and conventional commodity exchange regulations, in combining existing best practices of the latter and the rulings of the former in engineering a sounder system of grain trading for the benefit of market players and the end consumers. This would require a joint effort and support from exchanges, standard-setting bodies, and regulators. Among the areas of cooperation are the approach towards corners (ihtikar), squeezes, speculation (gharar, maysir, and najash), and defining the border between reasonable and excess speculation; financial architecture using new technologies in developing a commodity trading contract conforming to the Shariah regulations and the exchange requirements. There is a need to develop the ideas for global food contracts and grain reserve systems, and to test the contracts based on existing exchanges.

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Trade, policy, and food security

Cited by 61 publications

References 41 publications

Impacts of COVID-19 on Trade and Economic Aspects of Food Security: Evidence from 45 Developing Countries

Impacts of COVID-19 on Trade and Economic Aspects of Food Security: Evidence from 45 Developing Countries

Food Trade Openness and Enhancement of Food Security—Partial Equilibrium Model Simulations for Selected Countries

Islamic finance and food commodity trading: is there a chance to hedge against price volatility and enhance food security?

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