Quantifying the Effects of Agricultural Autarky Policy: Resilience to Yield Volatility and Export Restrictions

In the wake of the 2007–2008 global food crisis, various national governmental bodies aimed at increasing their food self-sufficiency to stabilize their domestic markets. Despite the fact that food self-sufficiency is a long-standing policy discussion issue, its effectiveness has not been fully scrutinized with a quantitative modeling approach. Japan’s government rigorously protects domestic agricultural producers on the grounds of national food security and, hence, has grappled with enhancing the country’s food self-sufficiency, even though economists have strongly argue against this, in terms of the inefficiency of resource allocation. This study developed a stochastic world trade computable general equilibrium model to quantify the benefit/loss of wheat autarky policies for Japan against wheat yield shocks and export bans. It was found that the comprehensive economic burden to materialize full self-sufficiency in wheat is approximately $8700 million, regardless of which of the two methods of market intervention––increasing the import tariff or subsidizing production--is used. Greater self-sufficiency causes higher volatility in the domestic wheat price due to the yield variability in exporting nations being more destabilized than that in exporting countries. Also, the autarky strategies almost halve the welfare deterioration induced by export restrictions, although it does not pay for the implementation cost