Exploring the Dynamic Effects of Agricultural Subsidies on Food Loss: Implications for Sustainable Food Security

Abstract

This paper analyzes the dynamic effects of agricultural subsidies on food loss using the two-stage dynamic panel model. The results reveal that dynamic adjustments exist in agricultural productivity (0.56) and food loss (0.58), with a U-shaped curve between them. That is, food loss declines as productivity grows, but it rises after reaching a certain productivity level. In addition, the results show that agricultural subsidies induce an increase in food loss in the short and long terms. Particularly in the short term, agricultural subsidies increase food loss directly by about 0.09%, and increase it indirectly by about 0.33% through changes in agricultural productivity. The long-term direct and indirect effects are estimated to be about 0.21% and 4.06%, respectively. While the indirect effects are greater than the direct effects, it is found that food loss responds more sensitively to agricultural subsidies in the long term.