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Reserves and trade jointly determine exposure to food supply shocks

Author

Listed:
  • Marchand, Philippe
  • Carr, Joel A
  • Dell’Angelo, Jampel
  • Fader, Marianela
  • Gephart, Jessica A
  • Kummu, Matti
  • Magliocca, Nicholas R
  • Porkka, Miina
  • Puma, Michael J
  • Ratajczak, Zak
  • Rulli, Maria Cristina
  • Seekell, David A
  • Suweis, Samir
  • Tavoni, Alessandro
  • D’Odorico, Paolo
Abstract
While a growing proportion of global food consumption is obtained through international trade, there is an ongoing debate on whether this increased reliance on trade benefits or hinders food security, and specifically, the ability of global food systems to absorb shocks due to local or regional losses of production. This paper introduces a model that simulates the short-term response to a food supply shock originating in a single country, which is partly absorbed through decreases in domestic reserves and consumption, and partly transmitted through the adjustment of trade flows. By applying the model to publicly-available data for the cereals commodity group over a 17 year period, we find that differential outcomes of supply shocks simulated through this time period are driven not only by the intensification of trade, but as importantly by changes in the distribution of reserves. Our analysis also identifies countries where trade dependency may accentuate the risk of food shortages from foreign production shocks; such risk could be reduced by increasing domestic reserves or importing food from a diversity of suppliers that possess their own reserves. This simulation-based model provides a framework to study the short-term, nonlinear and out-of-equilibrium response of trade networks to supply shocks, and could be applied to specific scenarios of environmental or economic perturbations.

Suggested Citation

  • Marchand, Philippe & Carr, Joel A & Dell’Angelo, Jampel & Fader, Marianela & Gephart, Jessica A & Kummu, Matti & Magliocca, Nicholas R & Porkka, Miina & Puma, Michael J & Ratajczak, Zak & Rulli, Maria, 2016. "Reserves and trade jointly determine exposure to food supply shocks," LSE Research Online Documents on Economics 67783, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:67783
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    File URL: http://eprints.lse.ac.uk/67783/
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    Citations

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    Cited by:

    1. Rebekka Burkholz & Frank Schweitzer, 2019. "International crop trade networks: The impact of shocks and cascades," Papers 1901.05872, arXiv.org.
    2. Love, David & Allison, Edward H. & Asche, Frank & Belton, Ben & Cottrell, Richard S. & Froehlich, Halley E. & Gephart, Jessica A. & Hicks, Christina & Little, David C. & Nussbaumer, Elizabeth M., 2020. "Emerging COVID-19 impacts, responses, and lessons for building resilience in the seafood system," SocArXiv x8aew, Center for Open Science.
    3. Maio, Roland & Puma, Michael, 2017. "Improving the resilience of African Countries to Food Shocks," Conference papers 332894, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Zuluaga-Guerra, Paula Andrea & Martinez-Fernandez, Julia & Esteve-Selma, Miguel Angel & Dell'Angelo, Jampel, 2023. "A socio-ecological model of the Segura River basin, Spain," Ecological Modelling, Elsevier, vol. 478(C).
    5. Hao, Xiaoqing & An, Haizhong, 2022. "Comparative study on transmission mechanism of supply shortage risk in the international trade of iron ore, pig iron and crude steel," Resources Policy, Elsevier, vol. 79(C).
    6. Tiziano Distefano & Francesco Laio & Luca Ridolfi & Stefano Schiavo, 2017. "Shock transmission in the International Food Trade Network. A Data-driven Analysis," SEEDS Working Papers 0617, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Sep 2017.
    7. Ana Esteso & M. M. E. Alemany & Fernando Ottati & Ángel Ortiz, 2023. "System dynamics model for improving the robustness of a fresh agri-food supply chain to disruptions," Operational Research, Springer, vol. 23(2), pages 1-53, June.
    8. Chen, Bowen & Villoria, Nelson B., 2018. "Food Price Variability and Import Dependence: A Country Panel Analysis," 2018 Annual Meeting, August 5-7, Washington, D.C. 274285, Agricultural and Applied Economics Association.
    9. Jessica A. Gephart & Rahul Agrawal Bejarano & Kelvin Gorospe & Alex Godwin & Christopher D. Golden & Rosamond L. Naylor & Kirsty L. Nash & Michael L. Pace & Max Troell, 2024. "Globalization of wild capture and farmed aquatic foods," Nature Communications, Nature, vol. 15(1), pages 1-13, December.
    10. Hu, Xin & Zhu, Bo & Zhang, Bokai & Zhou, Sitong, 2024. "Do internal and external risk spillovers of the food system matter for national food security?," Economic Modelling, Elsevier, vol. 136(C).
    11. Rulli, Maria Cristina & Casirati, Stefano & Dell’Angelo, Jampel & Davis, Kyle Frankel & Passera, Corrado & D’Odorico, Paolo, 2019. "Interdependencies and telecoupling of oil palm expansion at the expense of Indonesian rainforest," Renewable and Sustainable Energy Reviews, Elsevier, vol. 105(C), pages 499-512.
    12. Moritz Laber & Peter Klimek & Martin Bruckner & Liuhuaying Yang & Stefan Thurner, 2022. "Shock propagation from the Russia-Ukraine conflict on international multilayer food production network determines global food availability," Papers 2210.01846, arXiv.org, revised Jun 2023.
    13. Tiziano Distefano & Francesco Laio & Luca Ridolfi & Stefano Schiavo, 2018. "Shock transmission in the International Food Trade Network," PLOS ONE, Public Library of Science, vol. 13(8), pages 1-15, August.
    14. Nunung Nuryartono & Muhamad Amin Rifai & Triana Anggraenie & Budi Indra Setiawan, 2021. "Determining factors of regional food resilience in Java-Indonesia," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 23(3), pages 491-504, December.
    15. Yu, Yu & Ma, Daipeng & Qian, Yingmiao, 2023. "A resilience measure for the international nickel trade network," Resources Policy, Elsevier, vol. 86(PA).
    16. Linqing Liu & Weiran Wang & Xiaofei Yan & Mengyun Shen & Haizhi Chen, 2023. "The cascade influence of grain trade shocks on countries in the context of the Russia-Ukraine conflict," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-28, December.
    17. Yao, Guolin & Zhang, Xin, 2020. "The role of international trade in wheat supply resilience," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304641, Agricultural and Applied Economics Association.
    18. Rahman, Md Mamunur & Nguyen, Ruby & Lu, Liang, 2022. "Multi-level impacts of climate change and supply disruption events on a potato supply chain: An agent-based modeling approach," Agricultural Systems, Elsevier, vol. 201(C).
    19. Alam, Md. Mahmudul & Siwar, Chamhuri & , Abu N.M. Wahid, 2019. "Resilience, Adaptation and Expected Support for Food Security among the Malaysian East Coast Poor Households," SocArXiv hkbwn, Center for Open Science.
    20. E. Gutiérrez-Moya & B. Adenso-Díaz & S. Lozano, 2021. "Analysis and vulnerability of the international wheat trade network," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 13(1), pages 113-128, February.

    More about this item

    Keywords

    food systems; resilience; food crises;
    All these keywords.

    JEL classification:

    • N0 - Economic History - - General
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

    NEP fields

    This paper has been announced in the following NEP Reports:

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