The impacts of economic policy uncertainties on agriculture export

The agricultural sector has experienced increased haphazard policy interventions and has been exposed to different policy uncertainties. However, relatively little empirical research has been done on how economic policy uncertainties (EPU) affect agricultural exports. Thus, this paper explores the effects of trade and economic policy uncertainties on agriculture exports. It also assesses trade agreements’ mediation function and logistics performance in the EPU-agricultural export relationship. The Poisson pseudo-maximum likelihood (PPML) method is employed to apply the structural gravity specification using data for 60 high-income and emerging economies from 2007-2018. The findings disclose that policy uncertainties adversely impact agricultural exports. The impacts of EPU remain qualitatively indistinguishable from those of a high-income or an emerging economy. However, emerging economies suffer more severe trade policy uncertainty impacts on agriculture exports than high-income countries. The results further prove that strong logistics and trade agreements mitigate policy uncertainty’s effect on agriculture exports. Besides, the results demonstrate that policy actions to improve EPU to the mean value of the sample result in a 2.6% reduction in tariff. Policymakers should take swift and decisive actions to reduce uncertainties and promote agriculture exports. Additionally, this study calls for improving trade agreements and logistics infrastructure to promote agricultural exports.The agricultural sector has faced unpredictable policy uncertainties. Therefore, this study examines the effects of trade and economic policy uncertainties on agricultural exports, considering the role of trade agreements and the logistics performance of the countries. The study utilizes data from 60 agricultural goods exporting and 60 destination countries. The PPML model is utilized to exercise the structural gravity model to find the outcomes.Findings implied that economic policy uncertainty negatively affect agricultural exports, with emerging economies suffering more than high-income ones. However, better logistics performance and trade agreements can mitigate the negative impacts of uncertainties on agricultural exports. Besides, the results highlight that the higher the GDP per capita in the exporting country, the weaker the negative effects of EPU on agriculture export. Moreover, the results show that emerging economies have far more severe agricultural export losses from TPU shock than high-income countries.The significance of this research work lies in its practical implications and policy frameworks to elucidate the complex link between policy dynamics and agricultural export, enabling governments and policymakers to develop more resilient and adaptive policies to mitigate the adverse effects of trade and economic policy uncertainties. Besides, the findings of the study contribute to strategic decision-making for agricultural producers and exporters during high policy uncertainties.