The Implications of World Trade Liberalization on Agricultural Trade and Food Security: A Case Study of Sudan

Abstract

This paper assesses and quantifies the consequences of world trade liberalization in agriculture on trade and food security of Sudan. Sudan, with the agricultural sector as the main sector of economy, is characterized by its small open economy, and is classified as one of the least developed countries. Thus, Sudan becomes more vulnerable to any changes in international agricultural markets. The liberalization of international agricultural trade has a great influence on Sudan's food security and on the whole economy. An extended form of a multi-market model for Sudan is developed and used for the analysis. The model embodies important characteristics of agriculture in Sudan like substitution effects and stages of production. As agriculture is the main sector of Sudan's economy, the model is extended to explicitly integrate some of the key important macroeconomic linkages, and to establish certain feedback effects between agriculture and the macro-economy. The model simulations reveal that a higher world market price would overall lead to measurable gains in food security and agricultural trade of the country. However, when the effect of a higher cost of production is considered, the positive results are reversed. Furthermore, the results of the model simulations show that the domestic policy environment matters very much with respect to the potential impact of world trade liberalization of agriculture. The paper concludes that Sudan should reorient its national policies towards export promotion in order to benefit from the new emerging trading opportunities in world markets. However, to capture a greater benefit from the new environment in the international markets, Sudan should consider and manage carefully all factors, domestically or internationally - e.g. quality standard, loss of preference, dumping effects - that hinder its economic and trade growth.International Relations/Trade,