Influence of Foreign Remittances on Afghanistan's Food Security Using a CGE Model

Articles in Press

Document Type : Research Paper

Authors

1 Department of Agriculture Economics and Extension, University of Kabul, Kabul, Afghanistan.

2 Department of Agricultural Economics, Faculty of Agriculture, Ferdowsi University of Mashhad, Mashhad, Iran.

3 Department of Agricultural Economics, Faculty of Agriculture, University of Tehran, Karaj, Iran.

4 Department of Nature Engineering, Shirvan Faculty of Agriculture, University of Bojnord, Shirvan, Iran.

10.22059/ier.2024.373567.1007960

Abstract

The study utilizes a general equilibrium model and Afghanistan's social accounting matrix data to assess the impact of foreign remittances on food availability and access in Afghanistan, evaluate macroeconomic factors influenced by these remittances, and recommend agricultural-based policies for economic growth. The study focuses on the responses to a 60% drop in foreign remittances and a 20% surge in the volume of remittances abroad. It delves into the correlation between the domestic production of agriculture sub-sectors and the foreign remittance variable. Reducing foreign remittances leads to lower domestic production across all agriculture sectors, but this reverses when remittances swell, except for cereals. In the rising scenario, production of all agricultural categories rose except cereals. The study confirmed a fall in household consumption in all agricultural sectors except for cereals, due to a decline in foreign remittances. A 60% decline in foreign remittances has led to a nearly 7% decrease in cereal imports and a 15% decrease in exports. The study suggests that a 60% drop in foreign remittances negatively impacts food availability and accessibility, while a 20% rise in foreign remittances positively influences agricultural exports. It suggests the government should increase investment in agriculture, use skilled immigrants as scientific capital, and encourage sustainable agriculture investment.

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Iranian Economic Review

Articles in Press, Accepted Manuscript
Available Online from 06 November 2024

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