Global agricultural value chains and food prices

Food price volatility in sub-Saharan Africa: Has it really increased?

Globalization has enhanced the development of the transport sector and more importantly, the distribution of agricultural produce and food globally. However, not much is known about how this has impacted the welfare of the poor in Nigeria. Therefore, the study probed the persistence and asymmetry in food and transport price volatility; creating a dummy with the period before and after the adventure of significantly improved internet facility like 3G allowed the study to observe the significant effect of this period on persistence volatility of food price returns; and exploring the welfare effects of these volatility dynamics. A bi-variate EGARCH model was deployed to estimate the heteroskedastic behavior in rural food price and transport returns (1995M1-2017M11) obtained from National Bureau of Statistics while a simple welfare framework was used to gauge the effect of the price fluctuations. Persistence volatility in food price declined after introduction of 3G innovation. The study also confirmed that the risk in transport market significantly transmitted to rural food price volatility. Volatility persistence was high (0.99% apiece) both in food and transport markets. Also, there was evidence of leverage effect in transport price volatility in Nigeria. The study revealed that due to persistent price volatility, households gave up an average/maximum of 12%/33% and 13%/44% of their food consumption and transport expenditure/returns accordingly to achieve household food stability. Using the Lucas (1987, 2003) threshold, the study concludes that the benefits of eliminating volatility in food and transport are high.   Key words: Food price volatility, welfare and globalization.

Agriculture, food and global value chains: issues, methods and challenges

This study examines the impact of technological progress on food price dynamics and supply stability across the 27 European Union Member States during 2011-2024. Using a balanced panel dataset, the analysis explores four dependent indicators-consumer food prices, food price inflation, price volatility, and food supply variability-while controlling for trade openness, GDP per capita growth, and population. Technological progress is estimated through panel least squares regression with fixed effects. The results reveal that technological advancement significantly reduces food prices and inflation, suggesting that innovation-driven productivity and efficiency gains stabilize consumer markets. However, its influence on food price volatility and supply variability is statistically insignificant, indicating that innovation alone cannot fully mitigate systemic risks in the European food system. The results provide policy-relevant evidence supporting the integration of technological innovation into food system governance across the European Union. They underline the need for targeted investment and regulatory coordination to translate innovation gains into tangible resilience outcomes, thus offering practical guidance for policymakers and stakeholders involved in implementing the European Green Deal and the Farm to Fork Strategy.

This study aims to analyze the volatility of food prices, especially rice, in Central Java from 2020 to 2023. Food price volatility can have a negative impact on consumer welfare and costs. Indonesia, as a country that still imports basic food needs, is vulnerable to food price volatility. Spikes in food prices can cause inflation to rise and economic growth to decline, which impacts the condition of people’s households, especially the poor. This research uses a quantitative method using ARCH GARCH time series data. The results of this study are expected to identify and analyze the volatility of rice food prices, predict rice food prices at the end of 2023, and determined Bank Indonesia’s policies related to rice food price volatility. This research is based on the concepts of volatility, food prices, and inflation. Quantitative methods such as ARCH and GARCH models are used to analyze the volatility of rice food prices. Secondary data is used in this study, and the research steps include data collection, data analysis and interpretation, and presentation of results to provide recommendations

This paper examines the effects of international collaborative efforts on climate-friendly agricultural technologies on global food security. In particular, we use patent data on environmental technological innovations for OECD countries and global food prices from the period 1990 to 2016. Also, we investigate the impact of uncertainties in weather conditions in terms of rising global temperature created by climate change using data on global surface temperature from the Energy Information Administration and the Goddard Institute for Space Studies (GISS) Surface Temperature Analysis of the National Aeronautics and Space Administration (NASA). We used both impulse response functions and variance error decomposition from a panel Vector Auto-Regressive (VAR) model to examine both the response of global food prices to shocks on the concerned variables and the decomposition of error variance in global food prices. First, our results show that international collaborative efforts on climate-friendly agricultural technologies reduce global food prices while increasing global surface temperature increases food prices. Regarding the variance decomposition of global food prices, results show that surface temperature followed by international collaborations in climate-friendly innovations and other environment-related technologies are the main drivers of forecast error variance in global food prices. The food price variance share associated with greenhouse gas emissions is less when compared to that of technological innovations.

Forecasting disruptions in global food value chains to tackle food insecurity: The role of AI and big data analytics – A bibliometric and scientometric analysis

Food price volatility often occurs and cannot be avoided, including food price volatility that occurs in Parepare City. The effect of movement or changes in food prices appears to influence inflation, which in turn becomes the purpose of this study, namely to analyze the effect of changes in food prices on inflation in Parepare City. The analysis method used is multiple linear regression analysis. The data used is secondary data in the form of monthly time series from July 2018 to June 2021. The independent variables in this study are the food prices of rice, chicken meat, red chili, chicken eggs and granulated sugar. The results showed that the food prices of rice and chicken eggs have an increasing trend while the prices of chicken meat, red chili, and granulated sugar tend to decrease. The coefficient of determination test results shows that changes in food prices simultaneously positively and significantly affect inflation. The t-statistical test shows that partially changes in food prices of rice and chicken meat have a positive and significant effect on inflation while changes in food prices of red chili, chicken eggs and granulated sugar have a positive but insignificant effect on inflation. This research has implications for public policy to develop food prices stabilization policies, such as food reserve policies, market regulations, incentives for food producers, or social assistance programs to alleviate the impact of food inflation.

Economic globalization creates new opportunities for countries to develop and achieve high rates of economic growth through participation in global value chains. However, many countries, especially developing ones, face economic difficulties due to weak involvement in global value chains and low prospects for moving from the least profitable to more profitable links of the chains. The relevance of the study lies in the need to assess the nature of Russia's participation in global value chains in high-tech sectors in order to understand the prospects for improving the position of Russian companies in the global production system, ensuring a technological breakthrough and sovereignty. In this study, based on the concept of the "smile curve" of global value chains and the ADB MRIO input-output tables for 2000, 2011 and 2021 for 63 countries and 35 industries, an assessment of the nature of participation of companies in high-tech sectors of the Russian economy in global value chains is given for the first time. The distribution of added value for Russian global value chains takes the form of a "smile curve". At the same time, the main beneficiaries of the added value in such chains are domestic service companies. The theoretical significance of the work is due to the original knowledge about the specifics of the involvement of high-tech sectors of Russia in global production, as well as the features of its spatial organization (by identifying key foreign partners) and the transformation of participation in global value chains over the studied period of time. The practical significance of the study primarily comes from the data obtained on the contribution of foreign partners and Russian sectors of the economy to intra- and inter-industry trade in the studied sectors. This made it possible to decompose the studied sector in terms of added value from the point of view of foreign and national final and intermediate products, as well as from the point of view of foreign and national added values.

The article is devoted to the generalization and systematization of the main theoretical approaches and practical methods of measuring the participation of countries or industries in global value chains (GVC). The work provides the definition and main content of global value chains. It has been noted that the growing role of global value chains and their importance not only changes the approach to the ways of generating income and ensuring economic growth, but also gives an awareness that the most important driver of economic growth of an industry or country is direct participation in global value chains. Significant arguments have been presented in favor of the participation of countries in global value chains. Summarizing the existing methods of calculating the degree of a country’s participation in global value chains, the authors have singled out four index based methods: Index of Vertical Specialization, Export complexity index, GVC participation index and GVC position index. Index of Vertical Specialization assumes using data on the country’s expenditure-output for the distribution of the value of imported foreign goods contained in export products of a certain industry in this country, on the total export value of the industry. Export complexity index based on export volume and income of a country that participates in global value chains, as well as the export of goods of a specific country and the industry index of goods to measure the national product index. GVC participation index is measured in terms of the value of goods and services added as a result of trade. GVC position index shows the “status” of a certain industry in a country: the higher the value, the higher the “status” of a certain industry in the country’s global value chain, and vice versa. The main formulas for calculating indices, advantages and disadvantages of their use have been presented. Thus, it has been proven that the GVC participation index, which is based on the Index of Vertical Specialization, reflects the dynamics of the integration of countries in the GVC and allows for inter-country and inter-industry comparative analysis, but does not provide an opportunity to assess the benefits received from participation in the GVC. The use of the GVC Status Index allows to solve this task both at the country and at the sectoral level. It has been proposed to use GVC participation index and GVC position index as a basis for analyzing Ukraine’s participation in global value chains. This will allow not only to reveal the degree of Ukraine’s participation in the modern international division of labor but also, based on the conclusions of such an analysis, to develop recommendations for improving the place of Ukraine in the GVC and change the position of Ukraine from a raw material supplier country to a raw material processing country.

The recent period of high and volatile food prices has cast doubt on many longstanding assumptions such as the inevitability of declining real food prices, and brought to an end a long period of food price stability. Some of the key driving forces appear to have been declines in yield growth for major commodities and the rapid growth of biofuels. Both high and volatile food prices are justly causes for concern. Key elements of the cure for high food prices include a strong focus on agricultural research and development, as well as rural development more generally, and a reconsideration of the role of biofuels. The best cures for food price volatility aim to reduce it by improving market information and reducing output volatility. Social safety nets are the best policy for coping with its effects, while the widely-used trade and storage policy measures have many complex and uncertain effects.

Global value chain (GVC) participation has played a significant role in boosting the trade gains of both developed and developing seafood-exporting countries over the past three decades. In addition, the extent of GVC participation has become the most important platform for addressing gains from trade in developing seafood-exporting countries to ensure that their participation enhances economic growth. Recent studies on GVC participation in developing countries have highlighted the importance of domestic institutions. However, the literature is silent on the quality of the domestic institutions–GVC participation nexus. This paper aims to investigate the determinants of GVC participation and the effect of the quality of domestic institutional governance on seafood-exporting developing countries’ GVC participation indices. Using the Hausman–Taylor (HT) estimator and the system generalised method of moments (GMM) dynamic panel data methodology to examine seafood export data from 32 countries from 2009 to 2018, we find that economic potential drives backward GVC participation, while low forward participation might not only lead to lower gains from trade, but also limit countries to the supply of primary seafood products with little value addition. In addition, the quality of domestic institutional governance constrains GVC participation. Overall the results indicate that the quality of domestic institutional governance matters for the GVC participation of seafood-exporting developing countries.

The world faces a new food economy that likely involves both higher and more volatile food prices; evidence of both conditions was clear in 2007/08 and 2011. After the food price crisis of 2007/08, food prices started rising again in June 2010, with international prices of maize and wheat roughly doubling by May 2011. This situation imposed several challenges. In the short run, the global food supply is relatively inelastic, leading to shortages and amplifying the impact of any shock. The poor are hit the hardest. In the long run, the goal should be to achieve food security. The drivers that have increased food demand in the last few years are likely to persist (and even expand). Thus, there is a significant role for international organizations like the World Bank, IFAD, AFD, and the IADB to play in increasing the countries’ capacity to cope with this new world scenario and in promoting appropriate policies that will help to minimize the adverse effects of the increase in prices and price volatility, as well as to avoid exacerbating the crisis.

This study investigates the impacts of the global value chain (GVC) participation on conflicts across nations. The first novelty of this study is to observe the impacts of GVC participation on conflicts. In other words, the trade statistics are not conventional, but they track true domestic value-added embedded in exports and true foreign value-added embedded in imports, which provides a more accurate way to measure trade values. Secondly, the comprehensive data set enables us to include 188 countries and to conduct disaggregated analysis via the heterogeneity across sectors. The findings indicate that bilateral GVC participation has a significantly negative impact on the number of conflicts regardless of sector groups. The multilateral GVC participation of manufacturing and service sectors also decreases the number of conflicts across the countries. In other words, greater GVC activities can foster economic interdependence and peace because countries with close economic relations are less likely to wage war on one another due to the associated costs. Moreover, GVC participation may allow countries to access resources that are not available domestically. Therefore, trade can alleviate a potential cause of conflict. Regarding control variables, membership in the GATT, distance, common language, and polity measures are negatively associated with the number of conflicts whereas contiguity, common border, landlocked, and common colony are positively correlated with the number of conflicts. The findings are quite robust to a couple of robustness checks: different dependent variables, different samples, and 5-year (moving) averages. Therefore, we can argue that enlarging and deepening world trade negotiations and policies emphasizing peace might help to decrease tensions.

Engagement in the global division of labor has greatly influenced China’s economy and environment. With the multi-regional input–output (MRIO) framework, we calculate the global value chain (GVC) participation index of China’s 16 manufacturing sectors. We also measure the green upgrade index of manufacturing sectors based on the super-efficiency epsilon-based measure (SEBM) and the Malmquist–Luenberger (ML) index. In addition, the effect of GVC participation on the green upgrade of manufacturing sectors is empirically tested with a fixed effects regression model for panel data. Results show that: (1) sectors that rank high in the forward linkage-based GVC participation index also tend to rank high in the backward linkage-based GVC participation index; (2) the ML index is greater than 1 in most years, indicating that the green upgrade of China’s manufacturing sectors shows an uptrend; (3) for both forward and backward linkage, the rise of the GVC and complex GVC participation indexes significantly promotes the green upgrade of manufacturing sectors. Finally, GVC participation of China’s manufacturing sectors promotes green upgrade mainly through green technology progress. The conclusions have empirical evidence and policy implications for the advancement to medium- and high-end GVC participation and the green transition of China’s manufacturing sectors.