Effects of a tariffreduction on grain self-sufficiency: Evidence from country-level panel data

Abstract

This paper investigates the effects of a tariffreduction on the grain self-sufficiency and the sustainability of domestic grain production. We develop a theoretical model in which trade, tariff, and supply-demand equations are explicitly included, with the classification of food importing and exporting countries. Estimation results based on panel data for 150 countries over 17 years show that the effects of domestic tariffof food-importing countries on the grain self-sufficiency rate (SSR) are positive. This implies that market expansion through tariffreduction will have a negative effect on the importing country's food SSR and sustainable domestic supply. Using the estimated coefficients on the empirical equations, we derived the elasticities of grain SSR with respect to the tariffrate of food-importing countries. Those are in the ranges of 0.221-0.387.