Agricultural market integration: investigating the impacts of trade openness and climate change on food production in Somalia
Abdikafi Hassan Abdi, A. Ahmed, Abdiwahid Abdullahi Khalif Abdullahi Khalif
Abstract
In Somalia, food imports are substantial, while export earnings derive largely from livestock and agricultural products. Accordingly, food security and agricultural growth are fundamentally determined by the combined influences of climate variability and trade integration. Building on this background and considering the predominance of rain-fed systems, this study examines the long- and short-run effects of climate change and trade openness on food production using annual data from 1990 to 2021. The bounds testing procedure and Johansen cointegration analysis confirm a long-run equilibrium relationship among variables. The study applies an autoregressive distributed lag (ARDL) framework with fully modified OLS (FMOLS) and dynamic OLS (DOLS) estimators to assess robustness. The results indicate that climate variability exerts a significant influence on agricultural output. Rainfall contributes positively to food production, while higher temperatures undermine it. Trade openness exhibits a positive association with food production in both the short- and long-run, which confirms the benefits of market integration for an import-dependent yet export-oriented economy. Among the additional controls, land under cultivation and agricultural employment are positively associated with food production. Granger causality analysis further demonstrates a bidirectional relationship between trade openness and food production. Based on these results, the study derives several policy recommendations.