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The Double Dividend of Agricultural Trade Liberalization: Consistency between National Food Security and Gains from Trade

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  • Nobuhiro Hosoe

    (National Graduate Institute for Policy Studies)

Abstract

National food security is one of the main justifications used to oppose agricultural trade liberalization in Japan. Opponents of agricultural trade liberalization argue that because food supply is subject to various uncertainties, importation of cheap foods is too risky a policy. We used a Monte Carlo simulation to perform a computable general equilibrium analysis and investigated the impact of trade liberalization on national food security with random productivity shocks in four major crop markets, such as rice and wheat. Our results indicate that not only would the level of welfare be improved but also its fluctuations would be reduced by trade liberalization of rice, which shows almost perfect self-sufficiency, and by that of other crops whose supply depends heavily on importation. This double dividend would be obtained even when we focused on the cases of extremely poor crops yields.

Suggested Citation

  • Nobuhiro Hosoe, 2013. "The Double Dividend of Agricultural Trade Liberalization: Consistency between National Food Security and Gains from Trade," GRIPS Discussion Papers 13-02, National Graduate Institute for Policy Studies.
  • Handle: RePEc:ngi:dpaper:13-02
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    References listed on IDEAS

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    1. Rutten, Martine & Shutes, Lindsay & Meijerink, Gerdien, 2013. "Sit down at the ball game: How trade barriers make the world less food secure," Food Policy, Elsevier, vol. 38(C), pages 1-10.
    2. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
    3. Tanaka, Tetsuji & Hosoe, Nobuhiro, 2011. "Does agricultural trade liberalization increase risks of supply-side uncertainty?: Effects of productivity shocks and export restrictions on welfare and food supply in Japan," Food Policy, Elsevier, vol. 36(3), pages 368-377, June.
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    More about this item

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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