Understanding the determinants of domestic food availability: Evidence from a Caribbean Small Island Developing State

This study examines the key determinants of domestic food availability in a Caribbean Small Island Developing State, Trinidad and Tobago, focusing on the roles of inflation, globalization, population growth, and financial development. Given the nation's heavy reliance on food imports and vulnerability to inflationary pressures, understanding these macroeconomic drivers is essential for ensuring long-term food security and economic resilience. Using an Autoregressive Distributed Lag (ARDL) model with an Error-correction Mechanism (ECM) and annual data spanning 1983 to2022, this study investigates both short- and long-run dynamics. Additionally, Toda-Yamamoto causality analysis is employed to examine the direction of causal relationships between the variables. The findings reveal that inflation has a negative and statistically significant effect on food availability, emphasizing the need for price stabilization policies to mitigate rising food production costs. Globalization negatively affects food availability in the long-run, suggesting that excessive dependence on food imports can weaken domestic food production. Conversely, population growth and financial development positively impacts food availability, reinforcing the idea that a growing population stimulates food production when supported by proper infrastructure and policies and financial development can enhance domestic food availability by improving credit access and investment in agricultural modernization. The error-correction term of −0.977 suggests a high speed of adjustment, indicating that short-term deviations from equilibrium are quickly corrected. These findings have important implications, highlighting the need for inflation control to counter its negative impact on food availability, trade policies that reduce over-reliance on food imports due to the adverse effects of globalization, strategic investments in agricultural expansion to harness the positive impact of population growth, and financial sector development to support increased access to credit and agricultural modernization.