Food security and multicommodity agricultural international trade: Quantifying optimal consumer subsidies for nutritional needs

Abstract

Hundreds of millions of people are now facing food insecurity as challenges from climate change, the aftereffects of the COVID-19 pandemic, and strife and conflicts make availability of food at reasonable prices challenging. International trade has enabled the reallocation of agricultural products, essential for nutrition, from countries with supply markets to other points of demand and has been the subject of an increasing number of policy interventions by governments. In this paper, a multicommodity international trade network equilibrium model is constructed with the inclusion of nutritional minimal standards to support food security, accompanied by consumer subsidies, for which explicit formulae are provided. The theoretical and computational framework is based on variational inequalities. Numerical examples focusing on Ukraine and MENA (Middle Eastern and North African) countries and a staple commodity of wheat demonstrate the modeling and policy framework.