Portuguese Agrifood Sector Resilience: An Analysis Using Structural Breaks Applied to International Trade

Abstract

In the last two decades, Portugal suffered the effects of two global crises, the financial crisis and the COVID-19 pandemic, as well as the Common Agriculture Policy reforms. These crises had a great impact on the Portuguese economy, but it is completely unclear how they affected the dynamics of the Portuguese agrifood sector. This study’s objective is to analyze the resilience of this sector to European and global socks, testing the effects on international trade. Secondary data from the Portuguese Statistics Institute were used for the exports and imports trade series of animal and vegetable products and food industries from 2000 to 2020. The methodology was based on the structural xtbreak model, stability analysis, and tests for structural breaks. Some volatility was observed in the trade series, particularly in imports, without consistency among years, trade sectors, or imports versus exports trade. In the case of exports, one or two structural breaks in the different sectors occurred in different years. The most relevant dynamics occurred after the sovereign debt crisis. It was concluded that CAP reforms and global crises seem to not have caused new relevant dynamics in the Portuguese international agrifood trade. This revealed the resilience of the sector to external shocks.