Connected we stand: A network perspective on trade and global food security

Abstract

We analyze the link between virtual water trade, that is, the flow of water embodied in the international trade of agricultural goods, and vulnerability to external shocks from the vantage point of network analysis. While a large body of work has shown that virtual water trade can enhance water saving on a global scale, being especially beneficial to arid countries, there are increasing concerns that openness makes countries more dependent on foreign food suppliers and, in this way, more prone to external shocks. Our evidence reveals that the increased globalization witnessed in the last three decades is not associated with the increased frequency of adverse shocks (in food production). Furthermore, building on recent advances in network analysis that connect the stability of a complex system to its topological features, we find that the world is more interconnected, but not necessarily less stable.Keywords: virtual water; international trade; vulnerability; complex networks; agricultural production shocks JEL codes: F14, F18, Q25, Q56 Acknowledgements Financial support received through the project "The global virtual-water network: social, economic, and environmental implications" (FIRB -RBFR12BA3Y) funded by the Italian Ministry of Education, University and Research (MIUR) is gratefully acknowledged. The authors thank Francesco Laio and Stefania Tamea for providing the data on virtual water trade, Andrea Fracasso for insightful comments on an earlier draft of the paper, two anonymous referees and the Journal Editor for their suggestions and valuable inputs. 2 IntroductionThis paper investigates whether the globalization of food trade has made the world more vulnerable to shocks and, as a result, whether there is a trade-off between stability and openness. To do so we exploit the insights provided by network analysis: we study the structural features of the web of bilateral trade flows in agricultural goods -and the associated flows of virtual water-to ascertain whether they have evolved in a way that makes the world system more (or less) prone to large disruptions. In our endeavor, we relate to several streams of the existing literature, and interweave them to provide novel and original insights on the relationship between international trade and food security. The idea of measuring the water 'embodied' in goods, and 'virtually' traded from one country to another when goods are sold across borders, has been introduced by Allan (1993). In his seminal study, Allan describes virtual water (VW) trade as a market-mediated mechanism that enables water-scarce regions to cope with water scarcity (and food security) over the past few decades. (2012), the temporal evolution of the virtual water network is also analyzed, showing the progressive intensification of VW exchanges and the geography of these variations. We contribute to this literature by linking the topological features of the global network of VW trade to the resilience of the world system to shocks. In fact, the relationship between network topolog...

Global virtual water trade and the hydrological cycle: patterns, drivers, and socio-environmental impacts

“…Scaling properties of food flow networks from the village to the global scale were found to have consistent statistical distributions, indicating that similar governing mechanisms may be driving the redistribution of food across spatial scales . Other work concludes that the global food network is becoming more connected, but not necessarily less stable (Sartori and Schiavo 2015) and that shocks induce long-term structural changes leading to an evolution in the network's capability to absorb shocks (Fair et al 2017). At short time scales, the vulnerability, and resilience, of countries to external shocks has been analyzed using shock propagation models.…”

A framework for modelling the complexities of food and water security under globalisation

“…As the food system becomes increasingly globalised and urbanised, trade, both domestic and international, drives interdependency for food and water security among trading regions (FAO, 2015;Sartori and Schiavo, 2015). Water footprint studies have played an important role in quantifying the volume of water used in food production and embedded in traded food, known as virtual water trade (Allan, 1998;Fader et al, 2011;Hanasaki et al, 2010;Konar et al, 2016b).…”

“…A knowledge gap in these water footprint studies is that there tends to be a focus on international bilateral trade, meaning the much larger domestic trade fluxes are often neglected (Konar et al, 2016a). In the developed world, almost all food reaches consumers through trade whilst in the devel-oping world, trade is also increasing in importance as people move to cities and the numbers of people involved in subsistence agriculture decreases (Chen, 2007;IFPRI, 2017;Seto and Reenberg, 2014;United Nations, 2012). The lack of studies on domestic trade is in large part owing to the lack of data.…”

Networks of Value‐added Trade

“…(), Fan et al. () for network analysis of the robustness of the WTW to shocks and Sartori and Schiavo () for an application to international trade of agricultural products.…”

“…Given that the networks of value-added trade have a time-varying density, panel (d) ofFigure 1presents the measure of reciprocity ofGarlaschelli and Loffredo (2004b). 9 SeeFoti et al (2013),Fan et al (2014) for network analysis of the robustness of the WTW to shocks andSartori and Schiavo (2015) for an application to international trade of agricultural products.10 The 2013 World Investment Report (UNCTAD, 2013) offers a general view of GVCs in the global economy and discusses their contributions and risks for global and sustainable development.…”