Impact of Trade Openness and Climate Change on Food Productivity in Nigeria
| Date | 01 May 2021 |
| Published date | 01 May 2021 |
| DOI | 10.1177/0015732520970426 |
| Subject Matter | Articles |
Impact of Trade
Openness and Climate
Change on Food
Productivity in Nigeria
Mohammed Shuaibu1
Abstract
Liberal trade regimes could help improve food productivity if environmental con-
cerns such as adverse weather conditions that affect agriculture are addressed.
This issue has not received adequate empirical scrutiny as linear models domi-
nate 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 exist-
ence 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 Codes: F18, Q18, Q56
Keywords
Climate change, trade openness, international finance, international economics,
food security, nonlinear autoregressive distributed lag (ARDL)
Introduction
The response of food production to environmental and trade shocks has been at
the forefront of global discourse particularly following the 2007 food price shocks
Article
1 Department of Economics, Ahmadu Bello University, Nigeria, Zaria, Kaduna State, Nigeria.
Corresponding author:
Mohammed Shuaibu, Department of Economics, Ahmadu Bello University, Zaria, Kaduna State,
Nigeria.
E-mail: mohammed_shuaibu@yahoo.com
Foreign Trade Review
56(2) 165–184, 2021
© 2020 Indian Institute of
Foreign Trade
Reprints and permissions:
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DOI: 10.1177/0015732520970426
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166 Foreign Trade Review 56(2)
and 2008–2009 recession. Thus, developing countries used liberal trade policy
measures to buffer the shocks. Indeed, this was a spotlight at the 2013–2014
World Trade Organisation’s ministerial meeting in Bali where developing coun-
tries requested for more clarity and flexibility on the Agreement on Agriculture to
pursue trade policies that promote food security (Clapp, 2015). These issues were
also covered during the Doha round of negotiations in 2001. The recent pursuit of
climate-smart agriculture in line with the Malabo declaration and commitment by
African leaders to increase agriculture investment, eliminate food security and
halve poverty by 2020 remains critical for sustained regional development. This
is because climate change is projected to cause significant variations in the global
food supply due to high frequency of droughts and extreme weather events
(Earley, 2009). Many researchers have highlighted the importance of pursuing
climate change mitigation policies and failure of the Kyoto Protocol to ‘design a
more durable international agreement’ or coordinated action (Das, 2020).
The Global Food Security Index ranks Nigeria 96th out of 113 countries, while
the Global Hunger index ranks Nigeria 103rd out of 119 countries in 2018. With
a low score of 31.1, Nigerians face severe hunger as a significant share of the
population remain food insecure. According to UN estimates in 2018, Nigeria’s
population stood at 196 million people and this represents about 2.57 per cent of
the world population. Also, a significant share of the population (69%) are poor
and in rural areas and primarily engaged in agriculture. The impact of climate
change on agriculture could affect the poor who are mainly engaged in this sector
(Cervantes-Godoy & Dewbre, 2010). During the 2007 global food crisis, vulner-
able groups were significantly affected, and a future crisis could be magnified by
climate change risks (Nelson et al., 2009). Despite energy-efficiency escalation, it
is projected that world fossil fuel consumption could double by 2020, and CO2
emission would rise proportionately (Das, 2020).
The impact of climate change is spreading rapidly due to inter alia drought, ero-
sion, heat waves and floods, and this affects food production. Thus, weather-related
shocks affect agricultural productivity, reduce food supply and raise prices. Trade
policies could be used to support food production (Brown et al., 2017; Dithmer &
Abdulai, 2017). However, the role of trade measures in global negotiations on cli-
mate change remains inconclusive (Earley, 2009; Elbehri, et al., 2015) and thus war-
rants further scrutiny. Linear models have dominated the literature even though nega-
tive and positive shocks emanating from climate change and trade policies could
affect food productivity distinctly. Das (2020) notes that economic growth and trade
affect the environment with diverse effects on countries at different stages of devel-
opment through a decrease in output, investment and increasing political instability.
This article examines the effect of trade openness and climate change on food
productivity using a nonlinear ARDL framework. This method is appropriate
because the impact of rainfall variability and trade openness on food production
could be asymmetric. The impact depends on the availability of arable land and
the competitiveness of the agriculture sector. This reinforces the capacity of trade
to balance different social and economic goals on agriculture productivity (Clapp,
2015). Following this introduction, the second section presents stylised facts, the
third section reviews literature, the fourth section explores methodology and the
fifth section discusses the findings. Th sixth section concludes.
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