Multicommodity international agricultural trade network equilibrium: Competition for limited production and transportation capacity under disaster scenarios with implications for food security

Abstract

The number of people affected by disasters, including man-made ones, is on the rise globally, with rising food insecurity being one of the most critical impacts. Disasters, both sudden-onset and slow-onset ones, can cause disruptions to the production and transportation of agricultural commodities. Having the tools that can quantitatively assess the changes in agricultural commodity shipment volumes and their prices under disruptions caused by disaster scenarios is of major importance. In this paper, we utilize the theory of variational inequalities as the methodology to construct a multicommodity international agricultural trade network equilibrium model, which contains novel features of capacities on the production and transportation of multiple agricultural commodities to capture competition. The model includes exchange rates and accounts for multiple routes and possibly distinct transportation modes and combinations. Theoretical results are given and an algorithm is proposed. A series of numerical examples, both illustrative and algorithmically solved ones, inspired by Russia’s war on Ukraine, highlight the effects of reduced production and transportation capacities on food security in the Middle Eastern and North African (MENA) countries of Lebanon and Egypt. We also include sensitivity analysis results for exchange rates. The solutions reveal insights into the importance of the production and transportation capacities regarding food security, along with having multiple transportation routes that are cost-efficient as well as the importance of the magnitude of exchange rates.