Abstract
The agricultural sector represents up to 20% of the value added to the gross domestic product in Latin America and the Caribbean (LAC). Employment in agriculture represented a high share on average in LAC. A decreasing condition in competitiveness and economic growth indicators are the illustrative situation in this region since 2009. The most competitive country is Chile, and the least competitive is Venezuela in the region. LAC has great potential to increase its competitiveness in the agri-food trade and become a leader in the global market. However, all LAC countries have made progress in terms of human, economic, and social development, but their agriculture suffers from comparative disadvantages in certain aspects. Despite the global relevance of the topic, research on the patterns and dynamics in Latin America and the Caribbean is scarce, compared to other regions of the world. The definition of trade competitiveness is associated with the concept of comparative advantage, which means the nation’s ability to produce goods or services at a lower opportunity cost than its competing trading partners. Competitive performance can be determined by different measurements based on indicators such as revealed comparative advantage, market performance, trade success, and others. Revealed comparative advantage (RCA) indices formulated by Balassa and its modified versions such as RMA, RTA, RC, RSCA, and NRCA, as well as the Lafay index, are the most widely used indicators for the trade-based competitiveness of nations. Several studies have been published on analysing comparative advantages in different agricultural sectors in various parts of the world. In contrast, the number of studies that evaluate competitiveness in developing regions, such as Latin America and the Caribbean, is limited compared to other countries of the world. Therefore, this chapter provides an overview of trade competitiveness and revealed comparative advantages in the agri-food sector, focusing on the LAC region.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Notes
- 1.
The agricultural sector includes forestry, hunting, and fishing, as well as cultivation of crops and livestock.
References
Bakhshinejad, M., & Hassanzadeh, A. (2012). Comparative advantage of selected agriculture products in Iran: A revealed comparative advantage assessment. Agricultura tropica et subtropica, 45(1), 28–31. https://doi.org/10.2478/v10295-012-0004-9
Balassa, B. (1965). Trade liberalisation and “revealed” comparative advantage. The Manchester School, 33(2), 99–123. https://doi.org/10.1111/j.1467-9957.1965.tb00050.x
Beyene, H. G. (2015). BRICS and sub-Saharan Africa trade interdependence and peace: Evidence based on revealed comparative advantages. Journal of Law, Society and Development, 2(1). Accessed February 10, 2023, from https://hdl.handle.net/10520/EJC186388
Bojnec, S. (2001). Trade and revealed comparative advantage measures: Regional and Central and East European Agricultural Trade. Eastern European Economics, 39(2), 72–98. https://doi.org/10.1080/00128775.2001.11040990
Bojnec, S., & Fertő, I. (2017). The duration of global agri-food export competitiveness. British Food Journal, 119(6), 1378–1393. https://doi.org/10.1108/BFJ-07-2016-0302
Bojnec, S., & Fertő, I. (2018). Drivers of the duration of comparative advantage in the European Union’s agri-food exports. Agricultural Economics (Zemědělská ekonomika), 64(2), 51–60). Czech Academy of Agricultural Sciences. https://doi.org/10.17221/173/2016-agricecon
Bojnec, Š., & Fertő, I. (2019). European Union countries agri-food trade structures and main competitors on the internal and global agri-food markets. Ekonomika Poljoprivrede, 66(2), 635–650. https://doi.org/10.5937/ekopolj1902635b
Borges Aguiar, G. M., & Balogh, J. M. (2022). Analysis of the Competitiveness in the Agri-food sector: The case of Latin America and the Caribbean Region. Competitio, 21(1–2), 92–117. University of Debrecen. https://doi.org/10.21845/comp/2022/1-2/2
Burianová, J., & Belová, A. (2012). The competitiveness of agricultural foreign trade commodities of the CR assessed by way of the Lafay Index. Agris on-line Papers in Economics and Informatics, IV(4), 27–36. Accessed February 14, 2023, from https://www.researchgate.net/publication/282053863_The_competitiveness_of_agricultural_foreign_trade_commodities_of_the_CR_assessed_by_way_of_the_Lafay_Index
Castillejo, C., Fleischner, N., Harrison, Ch., Horwitz, L., Keller, M., & Orbach, J. (2022, August 23). Explainer: What is Mercosur? AS/COA. Accessed February 15, 2023, from https://www.as-coa.org/articles/explainer-what-mercosur
Cele, L. P., Hennessy, T., & Thorne, F. (2022). Evaluating farm and export competitiveness of the Irish dairy industry: Post-quota analysis. Competitiveness Review: An International Business Journal, 32(7), 1–20. https://doi.org/10.1108/cr-11-2020-0136
Dalum, B., Laursen, K., & Villumsen, G. (1998). Structural change in OECD export specialisation patterns: de-specialisation and ‘stickiness’. International Review of Applied Economics, 12(3), 423–443. https://doi.org/10.1080/02692179800000017
De Benedictis, L., Tamberi, M., De Benedictis, L., & Tamberi, M. (2004). Overall specialization empirics: Techniques and applications. Open Economies Review, 15(4), 323–346. https://econpapers.repec.org/RePEc:kap:openec:v:15:y:2004:i:4:p:323-346
Ferrarini, B., & Scaramozzino, P. (2011). Indicators and patterns of specialization in international trade. Swiss National Center of Competence Research Working Paper No 2011/10| March 2011. Accessed February 7, 2023, from https://www.wti.org/media/filer_public/3c/45/3c450e2f-21a9-4ce0-846b-f33acb38b7b5/indicators_and_patterns_of_specialization.pdf
Fertő, I. (2008). The evolution of agri-food trade patterns in Central European countries. Post-Communist Economies, 20(1), 1–10. https://doi.org/10.1080/14631370701865680
Fertő, I., & Hubbard, L. J. (2003). Revealed comparative advantage and competitiveness in Hungarian agri-food sectors. The World Economy, 26(2), 247–259. https://doi.org/10.1111/1467-9701.00520
French, S. (2017). Revealed comparative advantage: What is it good for? Journal of International Economics, 106, 83–103. https://doi.org/10.1016/j.jinteco.2017.02.002
Galle, V., Rachor, E., Arruda Coronel, D., Machado Pinto, N. G., & Costa, N. L. (2020). Vantagem comparativa revelada da indústria da carne de frango brasileira e dos principais players (2009-2016). Revista Eletrônica Científica, Da UERGS, 6(1), 42–53. https://doi.org/10.21674/2448-0479.61.42-53
Giordano, P., Campos, R., & Michalczewsky, K. (2022, November). Trade and Integration Monitor 2022: Shockwaves: Latin America and the Caribbean Facing Global Trade Turmoil. Trade and Integration monitor. Inter-American Development Bank. https://doi.org/10.18235/0004540.
Hoang, V. V. (2020). Investigating the agricultural competitiveness of ASEAN countries. Journal of Economic Studies, 47(2), 307–332. https://doi.org/10.1108/JES-10-2018-0366
Hoen, A. R., & Oosterhaven, J. (2006). On the measurement of comparative advantage. The Annals of Regional Science, 40(3), 677–691. https://doi.org/10.1007/s00168-006-0076-4
Inter-American Development Bank. (2022, November 10). Exports from Latin America and the Caribbean grow more than world trade despite slowdown. Accessed February 10, 2023, from https://www.iadb.org/en/news/exports-latin-america-and-caribbean-grow-more-world-trade-despite-slowdown
Ishchukova, N., & Smutka, L. (2013). Revealed comparative advantage of Russian agricultural exports. Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 61(4), 941–952. https://doi.org/10.11118/actaun201361040941
Jámbor, A., & Babu, S. (2016). The competitiveness of global agriculture: Policy lessons for food security. Springer. https://doi.org/10.1007/978-3-319-44876-3_6
Jámbor, A., Tóth, J., & Köröshegyi, D. (2018). Competitiveness in the trade of spices: A global evidence. Bulgarian Journal of Agricultural Science, 24(5), 729–736. http://agrojournal.org/24/05-01.pdf
Lafay, G. (1992). The measurement of revealed comparative advantages. In M. G. Dagenais & P. A. Muet (Eds.), International trade modeling. Chapman and Hill.
Latruffe, L. (2010). Competitiveness, productivity and efficiency in the agricultural and agri-food sectors, OECD Food, Agriculture and Fisheries Papers, No. 30. OECD Publishing. https://doi.org/10.1787/5km91nkdt6d6-en
Liesner, H. H. (1958). The European common market and British industry. The Economic Journal, 68(270), 302–316. https://doi.org/10.2307/2227597
Mizik, T. (2021). Agri-food trade competitiveness: A review of the literature. Sustainability, 13, 11235. https://doi.org/10.3390/su132011235
Mizik, T., Gál, P., & Török, Á. (2020). Does agricultural trade competitiveness matter? The case of the CIS countries. Agris On-Line Papers in Economics and Informatics, 12(1), 61–72. https://doi.org/10.7160/aol.2020.120106
Narayan, S., & Bhattacharya, P. (2019). Relative export competitiveness of agricultural commodities and its determinants: Some evidence from India. World Development, 117, 29–47. https://doi.org/10.1016/j.worlddev.2018.12.013
Peguero, F., Zapata, S., & Sandoval, L. (2019). Agricultural production of Central America and the Caribbean. Choices, 3rd Quarter 2019, 34(3), 1–10. https://www.jstor.org/stable/10.2307/26964937
Reyes, G. E., & Useche, A. J. (2019). Competitiveness, economic growth and human development in Latin American and Caribbean countries 2006-2015. Competitiveness Review: An International Business Journal, 29(2), 139–159. https://doi.org/10.1108/cr-11-2017-0085
Sarker, R., & Ratnasena, S. (2014). Revealed comparative advantage and half-a-century competitiveness of Canadian agriculture: A case study of wheat, beef, and pork sectors. Canadian Journal of Agricultural Economics, 62(4), 519–544. https://doi.org/10.1111/cjag.1205
Sharma, A., Kathuria, L. M., & Kaur, T. (2022). Analyzing relative export competitiveness of Indian agricultural food products: A study of fresh and processed fruits and vegetables. Competitiveness Review: An International Business Journal., Ahead-of-print. https://doi.org/10.1108/CR-03-2022-0039
Statista. (2023a). Smart agriculture in Latin America – statistics & facts. Accessed February 8, 2023, from https://www.statista.com/topics/7206/smart-agriculture-in-latin-america/#topicOverview
Statista. (2023b). Statistics about agriculture in LAC. Share of value added by the agricultural sector to the gross domestic product (GDP) in Latin America and the Caribbean in 2020, by country. Accessed February 9, 2023, from https://www.statista.com/statistics/1079120/latin-america-caribbean-agriculture-share-gdp/
Statista. (2023c). Statistics about agriculture in LAC. Employment in the agricultural sector as share of total employment in Latin America and the Caribbean in 2020, by country or territory. Accessed February 9, 2023, from https://www.statista.com/statistics/1082252/latin-america-caribbean-share-employment-agriculture-country/
Török, A., & Jámbor, A. (2016). Determinants of the revealed comparative advantages: The case of the European ham trade. Agricultural Economics – Czech, 62(10), 471–481. https://doi.org/10.17221/177/2015-AGRICECON
Vollrath, T. L. (1991). A theoretical evaluation of alternative trade intensity measures of revealed comparative advantage. Weltwirtschaftliches Archiv, 127(2), 265–280. https://doi.org/10.1007/BF02707986
World Bank. (2023a). World Integrated Trade Solution (WITS). LCN 10 trade statistics: Exports, imports, products, tariffs, GDP and related development indicator. Accessed February 10, 2023, from https://wits.worldbank.org/CountryProfile/en/LCN 10
World Bank. (2023b). World Integrated Trade Solution (WITS). Latin America & Caribbean Food Products Exports by country and region in US$ thousand 2020. Accessed February 10, 2023, from https://wits.worldbank.org/CountryProfile/en/Country/LCN/Year/2020/TradeFlow/Export/Partner/all/Product/16-24_FoodProd# 2022
Xia, L., & Dewi, S. (2022). Analysis of trade specialization and competitiveness of Indonesian coconut oil in the international market (2010-2020). Open Journal of Business and Management, 10, 245–262. https://doi.org/10.4236/ojbm.2022.101015
Yu, R., Cai, J., & Leung, P. S. (2009). The normalized revealed comparative advantage index. Annals of Regional Science, 43, 267–282. https://doi.org/10.1007/s00168-008-0213-3
Zdráhal, I., Hrabálek, M., Kadlec, P., & Krpec, O. (2021). Brazil’s comparative advantages and specialization dynamics in agri-food trade. AGRIS On-line Papers in Economics and Informatics, 13(2), 121–139. https://doi.org/10.7160/aol.2021.130210
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2024 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Balogh, J.M. (2024). Agri-food Trade Competitiveness in Latin America and the Caribbean Region. In: Mattas, K., Baourakis, G., Zopounidis, C., Staboulis, C. (eds) Value Chain Dynamics in a Biodiverse Environment. Cooperative Management. Springer, Cham. https://doi.org/10.1007/978-3-031-49845-9_2
Download citation
DOI: https://doi.org/10.1007/978-3-031-49845-9_2
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-031-49844-2
Online ISBN: 978-3-031-49845-9
eBook Packages: Business and ManagementBusiness and Management (R0)