Research Seminars @ Illinois

Trade and Agriculture: An Analysis at Global and Bilateral Scales

Advisor: Professor Megan Konar

Abstract

Over the last six decades, global agri-food trade has witnessed tremendous growth with parallel improvements

in agricultural productivity. This has also resulted in the establishment of major trade participants with bilateral

systems of significant consequence at the global scale, principally the US and China. Yet its implications for

crop productivity, resource use, and the bilateral agri-food trade between the key nations remain insufficiently

understood. This dissertation examines how international trade affects agricultural outcomes across scales, from

global crop yields and groundwater use to county-level farm income, through four interconnected studies.

At the global scale, we construct, decompose, and compare measures of global physical crop yield weighted by

harvested area, production, and trade shares using FAO data from 1961 to 2021, finding that global exports are

systematically skewed toward higher-yield crops and that exporting countries consistently outperform

importing countries in physical yield, indicating that globalization complements efforts to close yield gaps.

Turning to the environmental consequences of trade, we develop a suite of econometric regressions to account

for the impact of trade liberalizations in a framework that includes standard determinants of countries' water

supply and demand. We focus on groundwater use and on the contribution of regional trade agreements (RTAs)

to capture the impact of trade liberalizations. We find that more openness to trade due to an increasing number

of RTAs may actually reduce total groundwater abstractions, which is qualified by countries' comparative

advantage.

Focusing on the United States and China, two of the largest players in global agricultural trade, we develop a

novel data-fusion algorithm integrating U.S. Census trade data, the Freight Analysis Framework, and

Multi-Regional Input-Output tables to estimate 15,469 state-province and 713,806 county-province bilateral

agri-food links and identify critical port counties as core nodes in the trade network.

Additionally, using China's WTO accession and its favorable soybean tariffs as a quasi-natural experiment, we

employ a difference-in-differences design to estimate the causal impact of trade liberalization on farm income.

We find that U.S. counties specialized in soybean production saw significantly higher farm income growth

following the trade shock.

Together, these four studies contribute multi-scale evidence on how international trade affects agriculture to

inform decision-making for national and global food security.