Trade in Technology: A Potential Solution to the Food Security Challenges of the 21st Century

Thomas W. Hertel, Uris L.C. Baldos, Keith O. Fuglie

NBER Working Paper No. 27148
Issued in May 2020
NBER Program(s):International Trade and Investment

The recent rise in caloric undernutrition in Sub-Saharan Africa (SSA) demonstrates the continued relevance of the Malthusian footrace between food availability and population. Sluggish growth in farm productivity in SSA has brought to the fore the key role of agricultural technology in alleviating future food insecurity. We develop a model of technology, food security and international trade with three distinct channels for technology reduce food insecurity in SSA. The first is via greater domestic R&D investment. An alternative is to import technologies from other countries with significant knowledge capital. The third role for technology to resolve the Malthusian dilemma in SSA is that of ‘virtual technology trade’, i.e., importing technological investments undertaken elsewhere through cheaper imported food. To assess the relative contribution of each channel to food security in Africa, we employ a partial equilibrium, quantitative trade model, augmented by a temporal relationship between R&D investments, knowledge capital and agricultural productivity. Over the historical period: 1991-2011 we find that direct R&D investments in SSA have been the dominant vehicle for lowering food prices in Africa. Looking forward to 2050, we find that virtual technology trade will be the most important vehicle for reducing non-farm undernutrition in Africa.

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Document Object Identifier (DOI): 10.3386/w27148

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