Accessing Food Trade Sustainability in ASEAN-4 Countries

Izzah Syahirah, Jani (2018) Accessing Food Trade Sustainability in ASEAN-4 Countries. Masters thesis, Universiti Malaysia Sarawak(UNIMAS).

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Abstract

The purpose of this research is to examine the sustainability and long-run relationship between food exports and imports for four ASEAN countries (Indonesia, Malaysia, Philippines and Thailand) on the aggregate and disaggregate level. This study utilises the Intertemporal Budget Constraint (IBC) model to explain the behaviour of the food trade sustainability in these countries. The analysis was carried out using various unit root and cointegration procedures for the annual observations over the period from 1996 to 2014. According to the analysis results, several conclusions could be made. First of all, the results clearly show that a long-run relationship exists between food exports and imports in ASEAN-4 countries as a group at the aggregate level. At a disaggregated level, the results reveal that a long-run relationship exists between food exports and imports only for food commodities 022, 024, 034, 042, 044, 047, 075, 081 and 091. It is evident that the macroeconomic policies in these countries have been implemented effectively. Secondly, the study found evidence that food exports and imports are cointegrated with a strong form of sustainability in aggregate level which is the coefficient of β is more than one (1.0049). For every dollar ($) increase in the import of food, exports of food increase by $1.0049. This means that the food export is growing at a faster rate than food import in ASEAN-4 countries. At disaggregated level, the results show strong sustainability for food commodities 034, 047, 075 and 091 but weak sustainability for food commodities 022, 024, 042, 044 and 081. The results suggest that first, reducing the dependence on food import may improve food trade balance in ASEAN-4 countries. Second, policymakers should review the price regulation on food commodities so that it can buffer the future risk of market speculation. Third, some measures such as R&D intensification, technology transfer and extension services have to be done consistently to improve the quantity and quality of food production. Finally, urban agriculture is one of the better initiatives, hence, incentives should be prepared by the government of ASEAN-4 countries to improve the availability and quality of adequate food among the urban population.

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