Trade liberalisation, market behaviour and food security: Evidence from Tanzania

The increasing dependency on food imports for food security in the Global South implies a higher vulnerability to trade shocks. Trade barriers, such as export restrictions on stable food crops, are commonly used by developing countries in times of crisis. Surges in international food prices raise the real incomes of the farmers selling food while hurting the net food consumers. Trade restrictions may stabilise the domestic availability and price of food for net consumers in the short run. However, the question remains how liberalisation after a long period of ad-hoc export restriction influences rural producers. This working paper examines the effects of lifting a maize export ban on farmers’ food security and market behaviour in Tanzania. Using data from the National Panel Surveys over multiple waves, the study employs a difference-in-difference methodology to analyse the association at the household and district level. The results suggests that farmers who sold maize under the ban reduced their maize production and shifted to other stable crops, becoming less commercialised and disconnected from the market after liberalisation. A borderline significant negative association on household-level dietary diversity and quality is observed in regards to food security.