Understanding the dynamics of food trade, which involves a corresponding virtual trade in environmental resources, is relevant for its effects on the environment. Among the socioeconomic factors driving the international food market, trade agreements play a significant yet poorly understood role in facilitating access to worldwide trade. Focusing on the global trade of grain from 1993 to 2015, we investigate the role of trade agreements in activating new linkages and increasing traded volumes and their environmental implications. Through a data-driven approach, we show that the activation of a trade agreement among countries induces a more than six-fold increase in the probability of establishing a new link. Also, the presence of a trade agreement over time, not just its activation, relates to a more stable market since it reduces the probability of link deactivation by more than half. The trade links covered by agreements show larger flows and smoother inter-annual fluctuations. Furthermore, trade agreements encourage the development of more water-efficient flows by stimulating the exchange of crops with high water productivity values. The average economic water productivity of crops traded under trade agreements increases by 62% when considering total virtual water and even by 93% when focusing on blue water.

Agricultural production exploits about 70% of all water withdrawals around the globe, but to date, it is not clear if and how this water consumption is taken into consideration in the price of the agricultural primary goods. To shed light on this point, we analyze the farm gate prices of twelve representative crops in the period 1991-2016, considering data from 162 countries in total. The crop price dependence on the water footprint is investigated, also accounting for the country’s water scarcity as a possible additional determinant of the price, and of the land footprint as a possible confounding factor. We find that prices of staple crops (e.g. wheat, maize, soybeans, and potatoes) typically embed the amount of water used for their production. Differently, food products that do not contribute in an essential way to the human diet and whose production is more export-oriented (e.g. coffee, cocoa beans, tea, vanilla) exhibit weaker or negligible water-price links. These variations may be ascribable to specific market dynamics related to the two product groups. Staple crops are often produced in markets where many producers have more space for price setting and may have an incentive to include also the value of water in the final crop price. In contrast, cash crops are cultivated in situations where few producers are ‘price takers’ with respect to the international market. This mechanism may decrease the influence of the water used on crop farm gate price composition. The understanding of different water impacts on crop prices may be useful for increasing efficiency in water allocation and governance decisions, with the aim of improved environmental sustainability in this domain.

<p>Most human activities depend on water. Agriculture alone consumes 70% of all freshwater withdrawals worldwide.  In cases when such withdrawal overcome sustainability levels, water scarcity represents a growing threat to food security. In this framework, there has been an enduring debate on the opportunity of assigning an economic value to water. Some studies argue that water resources would be more efficiently allocated if they had a price that reflects their scarcity and that a pricing policy would also provide incentives for more sustainable consumption. Building on these considerations, in this work we investigate whether the water consumption in agricultural production is reflected in crop prices. </p><p>In this research, we focus specifically on the production of agricultural primary goods to understand whether water consumption is taken into consideration in the prices associated with these products on the global market. We consider the water component also in terms of water availability per capita at the country level (Falkenmark Water Stress Indicator). Aware of the fact that water and land are usually regarded as a single entity, we analyze if the water, isolated from this relation, still has an impact.</p><p>We select twelve representative crops analyzing their farm gate prices from 1991 to 2016, collecting data regarding 162 countries in total. We identify two different behaviors: staple crops (e.g. wheat, maize, soybeans, and potatoes) tend to incorporate in their prices the amount of water employed during the cultivation process. Differently, cash crops (e.g. coffee, cocoa beans, tea, vanilla), which are not crucial in human diets and mainly produced for exportation purposes, show a weaker relationship between water footprint and prices on the global market. These variations may be ascribable to specific market dynamics related to the two product groups. While there could be different elements influencing the behavior of these two macro-categories of crops, it is important to understand how water is related to crop prices to purse more efficient practices in water allocation and governance management, improving environmental sustainability in this field.</p>

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<p>Given the importance of food imports for food security and the role of exports in income generation, food trade is an indispensable component of most countries’ development strategies. Global and regional agreements set the rules for trade policies between countries. In this context, we investigate the impact of trade agreements on the trade network of agricultural products. We study whether the ratification of agricultural-oriented trade agreements has an influence on the topology of the cereal trade network (link establishment) and the variation of flows through existing links.</p><p>Our analysis differs from previous studies for three main reasons. Firstly, it is a data-driven analysis, based on a dataset that combines the trade agreement structure provided by the World Bank and cereal trade flow data from FAOSTAT. Secondly, the analysis focuses on a global scale, considering data for all countries where information is available. Finally, we carried out the analysis at the level of aggregated cereals, both from a monetary (US$) and diet-based (Kcal) perspective, over the period from 1993 to 2015. This time interval includes the most important recent reforms in the agricultural sector.</p><p>The results show that a new trade agreement between two countries increases the probability of activating a grain trade link by 7.3% in the year after the agreement is ratified. In the case where trade agreements are not considered, the probability of triggering a new link between two countries drops to 1.3%.</p><p>Regarding the volume of flows, we classify variations into three categories: flow decrease (negative variation of the flux), mild increase (<50% increase in the flow intensity), and sharp increase (>50% increase).</p><p>The results obtained, both in economic value (US$) and in quantitative variations (Kcal), show that the entry force of a trade agreement has two main effects: in flows covered by trade agreements, there is a significant increase in the percentage of flows experiencing a sharp increase, and a reduction of the percentage of flows experiencing a negative variation. </p><p>We, therefore, provide here global-scale, data-based evidence. Previous results suggest that trade agreements are facilitators of the connections between different countries and, therefore, facilitators in terms of global food trade accessibility.  This work aims to be a first attempt to investigate the impacts of international agreements simultaneously on the topology of the agricultural product trade network, and on the increase of existing link flows. Our intention is to dedicate further analysis about which trade agreements perform better, increasing the traded volume, to explore the role of trade liberalization at a worldwide level.</p><p> </p>