The Analysis of Trade Liberalization and Nutrition Intake for Improving Food Security across Districts in Indonesia

Abstract

The debate on the effect of trade liberalization on food security poses solid arguments, both in favor as well as against the issue. This study aims to analyze the linkages between trade liberalization (measured using food import tariff exposure) and food security (measured using nutrition intake) in the case of Indonesia. The national food import tariff is decomposed into district-level import tariff exposure and is analyzed based on sectoral tariffs such as agriculture tariffs and food manufacture import tariffs. The analysis employs panel data of 496 Indonesian districts and postulates an association between trade and food security by using fixed-effect regression. By analyzing the effects of tariff exposure towards food consumption in all districts and grouping the districts into 5 (five) islands, we can contribute to the literature on trade liberalization and food security. First, it is found that import tariff exposure is negatively impacting nutrition intake and each sector has a different effect on each nutrition intake. Furthermore, the impact of manufacturing tariffs on calorie and protein intake is slightly higher than that of agriculture tariffs. Second, it is shown that both sectoral import tariffs’ effects vary across islands in Indonesia. Furthermore, the research is expected to contribute to and become a reference for the government in regulating tariffs and other trade liberalization schemes to support households to be food secure.