Agricultural Market Competitiveness in the Context of Climate Change: A Systematic Review

Abstract

Climate change poses a significant threat to food security, poverty alleviation, and the economic growth generated by agriculture. In 2020, it is anticipated that the massive impacts of climate change, warfare, pests, and spreading infectious diseases will jeopardize food production, damage the supply chains, and over-stretch people’s ability to obtain nutritious foods at affordable/reasonable prices, threatening agricultural markets’ competitiveness. The study compiles information on climate change, competitiveness, and literature that links these phenomena to agricultural market competitiveness. The objective is to investigate the peer-reviewed and gray literature on the subject and explore the link between climate change and agricultural market competitiveness. Moreover, this study aims to find an appropriate technique to validate this assumed relationship. The findings indicate that there is currently no comprehensive measure/composite index for assessing the agricultural sector’s global competitiveness. The majority of used indicators of agricultural competitiveness do not account for the effects of climate change on agricultural market competitiveness. The study concludes by outlining implications/justifications for developing a global agricultural competitiveness index incorporating climate change impacts. The index is essential to maximize the potential of agricultural markets for optimizing the agricultural sectors’ competitiveness, and also to ensure global food security.

1. Introduction

Agriculture is one of the sectors that is most vulnerable to climate change and it has already been adversely affected [1]. Climate change has a multiplicity of effects on the agricultural sector, primarily through changes in productivity and yield, agri-food market shifts (supply adjustments and increased demand), and climate accountability regulations [2]. According to the Intergovernmental Panel on Climate Change (IPCC) assessment, if the current trends in global warming continue, temperatures would rise by 1.5 degrees Celsius between 2030 and 2052 [3]. The rising temperature alone has a detrimental effect on plant growth, reducing yields, productivity, and product quality, and also affecting loss during handling and transportation [4,5,6]. In addition, water availability and distribution problems, as well as increasing water scarcity, bring the agricultural lands under acute water stress [7,8]. Moreover, the increasing frequency of natural disasters such as droughts and floods exacerbates the complexity of food production [9,10].

Given the agricultural sector’s sensitivity to climate change and the fact that climate change is the world’s most pressing threat [11], measuring agricultural competitiveness cannot be disregarded [12]. According to the IPCC report, climate change has more detrimental effects than beneficial effects in a wide range of crops across many locations around the globe [1]. A small number of studies revealing the positive impacts of changing climate target the regions with high latitudes, for the most part [13]. However, it is still ambiguous whether the overall balance of effects in the region is positive or negative [14]. Furthermore, most of the previous studies focused solely on the production side of food security, market access, and availability, and other market-related components of food security appear to still be neglected [15]. However, the existing markets in the major producing regions seem to be highly responsive to stages of quick price hikes caused by climate extremes [16]. In addition, the IPCC [17] report also reveals a clear negative impact of climate change on agricultural production systems and food security. Only a few crops grown at high latitudes benefited from the positive influence [17]. Thus, climate change is one of the most important factors which needs consideration while calculating global competitiveness, as endorsed by Schwab and Sala-i-Martin [18], particularly in the agricultural sector [19].

The study sought to establish a link between climate change and agricultural competitiveness. Agriculture, being the sector most vulnerable to climate change, was chosen as the primary sector/area for examining the influence of climate change on competitiveness. However, within the study, it was found that there were multiple measures that could be used, such as productivity and efficiency, profitability, cost measures, and trade measures, along with others. Latruffe [20] used the abovementioned measures of agricultural competitiveness either individually or in index forms. Despite the multiple competitiveness measures used, there is still a lack of a global composite scale for agricultural competitiveness similar to the World Economic Forum’s Travel and Tourism Competitiveness Index (TTCI) [21]. Additionally, there is a severe lack of literature measuring the effects of climate change on global agricultural market competitiveness. The focus of the majority of the literature has been on the micro (farm) level of the industry. Therefore, this study proposes the construction of a global agricultural competitiveness measure/index when assessing the climate change impacts on the agricultural sector.

This study lays the groundwork for developing a global agricultural competitiveness metric. It will allow countries to assess their agricultural standing/position and provide room for the sectors’ continued development. This development of a global agricultural competitiveness measurement tool will emphasize the impact of climate change on agricultural markets and offer the foundation for developing climate-smart agricultural policies not just on a micro (farm) scale but also on a large scale (national and international). It will bring innovations in the agricultural sector and initiate measures for controlling the immense produce loss/wastage over the value chain. Moreover, agricultural finances will also be redirected on a national and international scale towards the countries with more agricultural potential but with a smaller share in the global markets. In addition to this, it will stifle the commercialization of fertile farmlands while supporting more productive climate-smart farms and marketplaces in naturally abundant countries. On the one hand, more competitive farms will address the problem of food insecurity, and on the other, they will stop the misutilization of agricultural produce.

The paper is a collection of knowledge regarding climate change, competitiveness, and literature that links these phenomena to agricultural market competitiveness. The objective is to investigate the peer-reviewed and gray literature on the subject to explore the link between climate change and agricultural market competitiveness and explore an appropriate technique to validate the presumed relationship. In conclusion, the paper identifies implications/justifications for developing a global agricultural competitiveness index. This index must include climate change impacts to maximize the potential of agricultural markets while optimizing agricultural sectors’ competitiveness and ensuring global food security.

2. Materials and Methods

2.1. Data Sources and Extraction

To observe the impact of climate change on agricultural market competitiveness in the literature, we conducted a systematic literature review. The study followed the framework proposed by Berrang-Ford et al. [22]. The framework includes,

(a)

The description of literature sources;

(b)

The articulation of search terms and a detailed description of the search process;

(c)

The elaboration of criteria for inclusion and exclusion;

(d)

The documentation of literature included and excluded.

2.1.1. Description of Literature Sources

We used the web-based search engines Google, Google Scholar, Web of Science (WoS), and Scopus for the literature search. We opted to integrate gray literature, such as institutional reports, to find the link between climate change and agricultural market competitiveness. To identify publications that refer to climate change’s impact on agricultural competitiveness, we used the topic search in Google Scholar. For this purpose, papers were first evaluated on the basis of their titles, followed by abstracts and keywords. For more relevant studies, we also studied methodologies and conclusions. It was either indexed in the Science Citation Index, the Social Sciences Citation Index, or the Emerging Sources Citation Index.

To find the relevant literature in Scopus, we employed the Compound Field TITLE-ABS-KEY, which searches abstracts, keywords, and article titles. We narrowed down our search to English-language publications. Additionally, we also considered the most relevant non-English abstracts. The search studied all peer-reviewed articles, reviews, book chapters, books, and editorial materials available in the search engines, with publication dates ranging from 1 January 2000 to 28 February 2021. However, the search for the history and definitions of competitiveness was carried out for a substantial period (1970–2020), as competitiveness is a multifaceted phenomenon and has evolved over the past century.

Table 1. Eligibility Criteria.

Criterion	Eligibility	Search Keywords
Literature Type	Journal articles, reviews, book chapters, books, editorial materials available	Climate change and competitiveness; Climate change impact on agriculture; Climate change impact on competitiveness; Climate change link to competitiveness; Climate change impact on the global agricultural market; Climate change and agricultural market competitiveness; Measuring Climate change; Measuring competitiveness; Measuring agricultural market competitiveness; Competitiveness defined; History of competitiveness.
Language	English (important non-English abstracts)
Areas	Climate Change, Competitiveness, Agricultural Market Competitiveness
Timeline	2000–2021 (for overall study), (1970–2020 for History of Competitiveness)

provides the summary of our eligibility criteria.

2.1.2. Articulation of Search Terms and/or Detailed Description of Search Process

“Climate change” and “agricultural market competitiveness” were the preliminary search terms (Figure 1 provides the detailed search strategy) with descriptors (or keywords) related to competitiveness measures. Table 1 provides a complete list of search strings/keywords used for the review.

During the first phase, we used the keywords of climate change and agricultural market competitiveness. A total of 239,000 papers appeared. We cut down the search to 2000–2021 during the second phase. As a result, 59,000 articles appeared. During the third phase, we identified 26,800 papers. There was a brief title and abstract evaluation of the records. After evaluation, the papers that did not satisfy the eligibility criterion numbered 26,470, and we excluded them. A total of 330 articles were found to be relevant to the current study. After a detailed review, we removed 238 of them, and the remaining 64 most relevant studies were included (Appendix A).

2.1.3. Description and Documentation of Literature Included and Excluded

We exported all the relevant publications found in the preliminary search. The database contained information on authors, publication year, publication title, source title, publication type, authors’ name, keywords, and subject areas of each document.

Table 2. Inclusion and Exclusion Criteria for Literature Selection.

Inclusion Criteria	Exclusion Criteria
Text in English (other language papers with English abstract available considered)	Text in languages other than English
Publication type is article, review, book chapter, report, or conference paper	Publication type is other than article, review, book chapter, report, or conference paper (e.g., note, erratum, book review)
Focus on the agricultural sector	Focus on sectors other than agriculture (e.g., energy and transport sectors)
Focus on composite measures of competitiveness	Focus on trade measures and individual measures of competitiveness
Climate impact on agriculture included	Agriculture’s impact on climate excluded
Focus on impact of temperature and precipitation changes on the agricultural sector	Focus on impact of climate change mitigation and adaptation measures on the agricultural sector
Focus on climate change impact on agricultural productivity and competitiveness	Focus on climate change impact on agricultural policies
Focus on national and global measures of competitiveness	Focus on farm level measures of competitiveness
Focus on multiple crops and crop markets	Focus on individual crops
Focus on measures of competitiveness	Focus on modeling approaches

presents the list of included and excluded criteria.

2.1.4. Originality Statement

The study is approved by the Institute of Management Sciences. It has no duplication on the same topic, and the title does not exist elsewhere. It is an original work of the authors. Moreover, the study has followed the Preferred Reporting Items for Systematic Reviews and Meta-Analysis (PRISMA) checklist for systematic literature reviews to conduct this study (Supplementary Materials).

3. Results and Discussion

The literature includes article reviews, book chapters, reports, and conference papers, all in English, apart from important non-English abstracts that were considered. The two main themes under focus were climate change and competitiveness. However, the main target area of the study was the competitiveness of the agricultural sector. Along with discussing agricultural competitiveness measures, we conducted an in-depth discussion/comparison of composite measures of competitiveness. We also connected climate change and agriculture, climate change and competitiveness, and climate change and agricultural competitiveness. Finally, we discussed the potential strategies for increasing agricultural competitiveness.

For many years of its existence, the term competitiveness has remained obscure. Even though it is an important concept, it does not have a universally accepted definition, since competitiveness is a complex and relative phenomenon, with many facets. It is associated with many mutually dependent factors, making it challenging to describe this concept. A global-level definition stated in the Global Competitiveness Report defines competitiveness “as the set of institutions, policies, and factors that determine the level of productivity of a country” [23]. On the other hand, the International Institute of Management Development’s World Competitiveness Yearbook declares competitiveness to be “the ability of a nation to create and maintain an environment that sustains more value creation for its enterprises and more prosperity for its people” [24].

The work of global organizations mainly relies on productivity as a significant representative of competitiveness. However, recent research enumerates other aspects of competitiveness as well. For instance, Atkinson [25] discusses innovation as a significant representative of competitiveness. Further, Atkinson [25] stated that while productivity and innovation are related to competitiveness, these are still separate terms that require different definitions. Therefore, as a result, he defines competitiveness as “the capability of a region to export more in value-added terms than it imports”. As part of a qualitative content analysis, Plumins et al. [26] conducted a comprehensive review of 125 competitiveness definitions from 1949 to 2013, and after analyzing 34 rationales, they concluded that competitiveness is the ability to obtain something using commodities on a global scale. They explained the phrase in terms of three different categorizations of its constructions throughout its evolution. Early definitions of competitiveness were more concerned with the scale and basic meaning of the phenomenon. Following that, the definitions focus on the crucial channels, particularly commodity-related strategies and resources, for achieving and maintaining competitiveness. Finally, definitions include internal factors, such as the capabilities, skills, and competencies of organizations. In addition, Plumins et al. [26] found that the term competitiveness is equally linked to the national and firm levels, while there is comparatively less discussion on the sector, industry, and regional levels.

Moreover, Lee and Karpova [13] outlined the competitiveness theory-building process. Three major theories and the existing literature provided the basis for their new definition, with particular attention given to the current global environment. After conducting a systematic content analysis of nine existing definitions, they specified three key components to define the phenomenon of competitiveness. The recognized constructs are fundamental aims, methods, and historical factors. The main goal is to achieve a higher standard of living based on per capita income, employment, and income equality. Productivity is revealed to be a critical source for achieving competitiveness from a methodological perspective, while from a historical perspective, knowledge is shown to be the most significant factor in determining competitiveness in the new world environment. Given the identified factors, it is stated that competitiveness “Is an ability to achieve a high standard of living through productivity growth in the new global environment, where knowledge becomes a critical factor”. “Knowledge” is added as a core factor in the competitiveness definition and is declared to be a bridge between the competitive advantage theory of Porter [27] and the comparative advantage theory of Krugman and Obstfeld [28]. Finally, Aiginger [29] discusses how competitiveness has progressed from a cost-oriented construct to an outcome-focused concept. He compared the low and high road methods, with the latter preferred. As a result, countries that choose the high road strategies of skills, innovation, productivity, and sophisticated markets are more prosperous in the long run than countries that choose the low road tactics of cost cutting.

Additionally, wealthier countries may gain more from high road initiatives, while developing countries can enter markets with more ease due to their lower prices. These strategies, however, require a distinct set of concepts and constructs to lay the groundwork for a new idea of competitiveness that is consistent with high road plans. Aiginger [29] outlines the evolution of the competitiveness concept. He divides the constructs of competitiveness into three broad categorizations, among which the first one has its basis on an older version of the competitiveness concept. In this category, in the beginning, cost alone and later cost and productivity have a vital role in measuring competitiveness. The second category, quality competitiveness, includes structural elements based on the country’s shares and drivers of competitiveness based on different growth and welfare theories involving innovation, education, country-level theories, clustering, social capital, and others. This categorization is quite broad and encompasses a variety of competitiveness drivers. It finds its place between cost and outcome competitiveness. The third category is outcome competitiveness, subdivided into old and new perspectives. In the previous version, competitiveness measures include outcome indicators, such as Gross Domestic Product (GDP) and employment, whereas in the new version, they added goals beyond GDP, such as life expectancy, satisfaction, and happiness. Finally, the author concludes that the definition of competitiveness is a country’s ability to provide goals beyond GDP growth to its native people, both in the present and future. Aiginger [29] declares this version of competitiveness to be a perspective of socio-ecological transition.

3.1. Study Characteristics of Crops: Reviewed Papers

We reviewed ten studies in

Table 3. Characteristics of Crops’ Studies.

Serial No.	Publication	Crop Selection Criteria	Crops Studied/Analyzed	Competitiveness Approach/Index Used	Region
1	Müller et al. [32]	Four major crops	Wheat, maize, soybean, and rice	Patterns of crop yield stability under additional inputs	Global
2	Coronado et al. [33]	Predominant crops in Peru	Rice, potato, alfalfa, and sugarcane	Productivity	Peru
3	Calvin et al. [34]	Agricultural goods represented in Global Change Assessment Model (GCAM)	Corn, fiber crops, misc. crops, oil crops, other grain, palm fruit, rice, roots and tubers, sugar crops, and wheat	Crop yield	Global
4	Baker et al. [35]	Major US crops	Crops (barley, corn, cotton, rice, sorghum, soybeans, and wheat), livestock commodities (ruminant meats, non-ruminant meats, and poultry), and agricultural land uses (cropland and grasslands)	Productivity	US (along with global comparison)
5	Tamini et al. [36]	Important crops	Corn, apple, and maple syrup	Production and partial budgeting	Quebec
6	Elsgaard et al. [37]	Important crops	Maize, oat, and wheat	Cropping shares	25 European countries
7	Carraresi and Banterle [30]	Agriculture and food industry inter-comparison	Agriculture: live animal, edible fruits and nuts; peel of citrus fruits, cereals, oil seeds, and oleaginous fruits Food industry: meat and edible meat, dairy products, coffee, tea, mate, spices, animal/vegetable fats and oils and their cleavage products; prepared edible fats; animal or vegetable waxes, preparations of meats, fish, sugar and sugar confectionary, cocoa and cocoa preparation, preparations of vegetables, fruits, nuts or other parts of plants, miscellaneous edible preparations, beverages, spirits, and vinegar	Export Market Share (EMS) and Balassa Revealed Comparative Advantage (RCA)	27 EU countries
8	Hermans et al. [38]	Cereals and root crops cover approximately 60% of the arable land in EU27. Permanent grassland and meadows as a representative for milk cover more than 50 million ha in EU27.	Wheat (a cereal), potato (a root crop), and milk (relying on grassland)	Productivity	All regions of the EU27 and Norway
9	Costinot et al. [39]	10 most important by value of all-country output- crops. 50 most important countries by value of all-crop output	Banana, soybean, cotton, sugarcane, maize, tomato, oil palm, wheat, rice, and white potato	Productivity	Algeria, Argentina, Australia, Bangladesh, Brazil, Burma, Cameroon, Canada, China, Colombia, Cote d’Ivoire, D.R. Congo, Ecuador, Egypt, Ethiopia, France, Germany, Ghana, Greece, India, Indonesia, Iran, Italy, Japan, Kazakhstan, South Korea, Malawi, Malaysia, Mexico, Morocco, Netherlands, Nigeria, Pakistan, Philippines, Poland, Romania, Russia, South Africa, Spain, Sudan, Tanzania, Thailand, Turkey, Uganda, Ukraine, United Kingdom, United States, Uzbekistan, Venezuela, Viet Nam
10	Barrueto [31]	Most climate resilient sub-sectors/crops	Sub-sectors: banana, charcoal, coffee, macadamia, orange, vegetables, and walnut	Climate impact analyzed at each stage of value chain	Nepal

, that explored crops in the context of agricultural competitiveness, and we found them to be quite relevant. The majority of the studies mentioned wheat, maize, soybeans, rice, corn, fiber crops, palm fruit, roots and tubers, sugar crops, and other crops, such as sugar cane crops, etc. Carraresi and Banterle [30] also discussed live animals and other crops. The majority of the studies were global and from Europe. However, a single study conducted by Barrueto et al. [31] was from Nepal.

3.2. History of Competitiveness

In the present globalized world, a country’s development is increasingly evaluated in terms of competitiveness. However, the concept has evolved rapidly over the centuries, from the work of Adam Smith to Michael Porter and others. The competitiveness concept has been categorized by economists into three major theoretical perspectives. These include the functional, structural, and behavioral perspectives [40]. The behavioral perspective is represented by Adam Smith and Michael Porter’s views. Competitiveness, in this context, refers to identifying the traits and approaches of business organizational behaviors in the face of competition as businesses attempt to generate better efficiency, with success measured in financial terms. Therefore, business organizations strive to achieve market competitiveness, with the foundations of this perspective based on consumers’ capital allocations and the maximization of their wants.

A second view, the structural perspective, outlined by A. Cournot, F. Edzhwarth, E. Chemberlain, and J. Robinson, has its foundation on the idea that a fair market structure is independent of particular business organizations and individuals [41]. The market system and its operating conditions are the only significant players. Competition in this situation takes the form of collective production management, resulting in resource reallocation among multiple branches. Here, the market is ruled by various buyers of identical products. Thirdly, Y. Schumpeter’s ideas are categorized as the functional perspective. The functional perspective views business organizations’ economic development strategies as innovative. Business organizations must cut production costs and develop new products to meet rising consumer demand. Olczyk [42] traces back the history of the international competitiveness concept to the 1970s, considering it to have dominated research in the domain of global economics. As a result, until the 1970s, the theory of competitive advantage dominated international trade theory. The most important tenet of this theory was that a country specializes in the production of more efficiently produced goods [28]. The theory of absolute advantage in Adam Smith’s book, the Wealth of Nations is widely recognized as the first effort, establishing the framework for international trade and competitiveness [28]. David Ricardo’s 1817 book, Principles of Political Economy and Taxation, introduced the Theory of Comparative Advantage [43], and received wide recognition as the most significant contribution to the theory of global trade and competitiveness. However, after World War II, the comparative advantage theory failed to account for the massive two-way trade between industries producing homogeneous products. However, rather than the constant scale and perfect competition assumed by Ricardo in his comparative advantage theory, this mutual trade was possible due to economies of scale [44].

Towards the end of the nineteen-seventies, the monopolistic competition models provided foundations for the new trade theories [45]. The comparative advantage theories and the new trade theories both emphasized the importance of specialization, while the new trade theories were founded on the premise of economies of scale and not on the comparative advantage assumption [42]. Economies of scale at the firm level were considered to be sufficient to constrain the number of rivals, as were trade models based on the assumption of oligopolistic markets. Even without comparative advantage, trading in homogeneous products among companies with internal economies of scale was regarded as favorable on a bilateral basis between the mid- and late 1970s [44]. However, despite this, new trade theories failed to identify the production sites [44]. Porter [27] removed this shortcoming by introducing a new trade theory, the diamond model, thereby providing a holistic perspective of national competitive advantage. Accordingly, four different country characteristics were responsible for a country’s competitive advantage. These were the demand conditions, factor conditions, supporting and associated sectors, and the company’s structure, strategy, and competition. Moreover, state policy and chance also aided the national competitiveness mechanism. However, these do not initiate the competitiveness process [27].

Alternatively, Porter combines several opposing theories into a single concept, selecting “factor conditions” from the classical and neoclassical schools, “demand conditions” from the Rostow growth and product cycle theories, “related and supporting companies” from Marshall’s industrial districts and polarization theory, and “firm strategy, structure, and rivalry” from Schumpeter’s theory of firm strategy, structure, and rivalry [42]. The diamond model is generally considered to be paramount for a country’s international competitiveness. Additionally, Porter has come under criticism from both economists and management specialists. Economists chastised him for establishing a tenuous link between the model and the international trade ideas, as well as for the model’s inability to forecast future scenarios [44]. While the management experts criticized Porter for omitting multinational exercises, Dunning added additional factors in 1993, including pro-competitiveness policies, government policies, and foreign direct investments [46]. Following Dunning, the model was expanded, including human variables such as professional, entrepreneur, bureaucrat, politician, and worker [47].

Although Porter’s diamond model transformed our understanding of international competitiveness by introducing a compound approach to analyzing this phenomenon, it also sparked a global discussion about the indicators and determinants of competitiveness. As a result, the World Economic Forum Global Competitiveness Index and the International Institute for Management Development World Competitiveness Ranking were launched, with their foundations on the Porter diamond model. However, the technique adopted by the World Economic Forum (WEF) closely resembles the Porter diamond model because the WEF defines competitiveness as a composite index encompassing micro, macro, and policy-related variables [48]. Porter also examined the government capacity, microeconomic variables, and macroeconomic possibilities when determining international competitiveness. Finally, in a bibliometric analysis of international competitiveness, Capobianco-Uriarte et al. [49] related the three most dominant theories to the concept of competitiveness. Additionally, they found that David Ricardo’s Theory of Comparative Advantage, outlined in the 19th century, was the first theory providing the basis for the competitiveness concept. The second theory closely associated with the competitiveness concept is Michael Porter’s Theory of Competitive Advantage (1990) [27], and the third is the Theory of Systematic Competitiveness developed by Esser et al. [50]. Systems competitiveness considers an inventive environment, provided by the state, social actors, and business associations, to be a vital contributor to growing productivity and increasing the competitiveness of firms/businesses, while systematic competitiveness, on the other hand, is defined as a combination of four levels: macro, micro, meta, and meso. This is a step up from the previously described combination of the micro and macro levels. Throughout the preceding two centuries, the concept of competitiveness has gone through several stages and taken on a range of interpretations. In contrast, the Porter diamond model and comparative advantage are the most durable and significant contributions, as they radically altered the dynamics of the term competitiveness and paved the way for the formation of global competitiveness indicators.

3.3. Measures of Competitiveness

Competitiveness is measured using a range of measures, such as productivity, market share, trade indices, and other indicators of economic health. The use of global indexes, on the other hand, might give a more comprehensive picture of the competitiveness issue because they are more focused on certain aspects of the idea. Several global indexes can be used to determine a country’s competitiveness, as shown in

Table 4. Global Competitiveness Indices and their Dimensions.

Source	Indices	I	i	ii	iii	iv	v	vi	vii	viii	ix	x	xi	xii	xiii	xiv	xv	xvi	xvii	xviii	xix	xx	xxi	xxii	xxiii	xxiv	xxv	xxvi	xxvii	xxviii	xxix	xxx	xxxi	xxxii	xxxiii	xxxiv	xxxv	xxxvi	xxxvii
a	CCI	2	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	✔	✔	×	×	×	×	×	×	×	×	×	×	×	×	×	×
b	GCI	12	✔	✔	×	×	×	✔	×	✔	✔	✔	×	✔	✔	✔	✔	✔	✔	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×
c	SCI	17	✔	✔	×	×	×	×	✔	✔	✔	✔	×	✔	✔	✔	✔	✔	✔	×	×	×	×	×	×	✔	×	×	×	×	✔	✔	×	×	×	×	✔	×	✔
d	SACI	14	✔	✔	×	×	×	✔	×	✔	✔	✔	×	✔	✔	✔	✔	✔	✔	×	×	×	×	×	×	×	×	×	×	×	×	×	✔	✔	×	×	×	×	×
e	GSCI	4	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	✔	×	✔	×	×	×	×	✔	✔	×	×	×
f	EU RCI	11	✔	✔	×	×	×	×	✔	✔	✔	✔	✔	×	✔	×	✔	✔	✔	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×	×
g	TTCI	14	×	×	✔	✔	✔	✔	×	×	✔	×	×	×	✔	×	×	✔	×	✔	✔	✔	✔	×	×	×	✔	×	✔	×	×	×	✔	×	×	×	×	×	×

I = Number of Dimensions, i = Institutions, ii = Infrastructure, iii = Air Transport Infrastructure, iv = Ground and Port Infrastructure, v = Tourist Service Infrastructure, vi = CT Adoption/Readiness, vii = Technological Readiness, viii = Macroeconomic Stability, ix = Health, x = Skills/Higher Education, Training, and Lifelong Learning, xi = Basic Education, xii = Product Market, xiii = Labor Market/Labor Market Efficiency, xiv = Financial System, xv = Market Size, xvi = Business Dynamism/Environment/Sophistication, xvii = Innovation/Innovation Capability, xviii = Safety and Security, xix = Prioritization of Travel and Tourism, xx = International Openness, xxi = Price Competitiveness, xxii = Climate Performance, xxiii = Climate Accountability, xxiv = Environmental Policy, xxv = Cultural Resources and Business Travel, xxvi = Natural Capital, xxvii = Natural Resources, xxviii = Resource Intensity, xxix = Resource Efficiency, xxx = Management of Renewable Resources, xxxi = Environmental Sustainability, xxxii = Social Sustainability, xxxiii = Social Capital, xxxiv = Intellectual Capital, xxxv = Environmental Degradation, xxxvi = Climate Change, xxxvii = Others; a = United Nations Environment Programme (UNEP), Account Ability 2010, b = World Economic Forum (WEF) 2019, c = Klaus Schwab; World Economic Forum (WEF) 2011–2012, d = Klaus Schwab; World Economic Forum (WEF) 2012–2013, e = SolAbility 2017, f = Paola Annoni, Lewis Dijkstra 2019, g = World Economic Forum (WEF) 2019; CCI = The Climate Competitiveness Index, GCI = The Global Competitiveness Index, SCI = The Sustainable Competitiveness Index, SACI = The Sustainability Adjusted Global Competitiveness Index, GSCI = The Global Sustainable Competitiveness Index, EU RCI = The European Union regional competitiveness index, TTCI = The Travel and Tourism Competitiveness Index.

.

According to Table 4, seven competitiveness metrics are examined: CCI, GCI, SCI, SACI, GSCI, EU RCI, and TTCI. Each has a different number of dimensions studied, with the CCI having two, the GCI having twelve, the SCI having seventeen, the SACI having fourteen, and the GSCI having four. Three dimensions/pillars (ix, xiii, xvi) account for 71.4 percent of all indices, according to the analysis of each dimension. Six pillars are used four times, with each having an individual proportion of 57%, while three others appear three times, each with a percentage of 43%, and one is used only once, with a portion of 33%. A single dimension (xxxi) is used twice in the seven indices, and is mentioned in the table with a percentage of 29%, while twenty-three pillars are used for a single time, each with a proportion of 14.3%. However, none of the indices include the climate change pillar. All the above indices measure the competitiveness phenomenon very comprehensively. However, none of these include the most relevant aspect of climate change in the competitiveness measurement. Though we have the indicators of climate performance and accountability in the climate competitiveness index, we cannot find any indicator measuring the impact of climate change on competitiveness. Moreover, this study identifies a deficiency: there is no global index available for agricultural market competitiveness measurement to the authors’ best knowledge.

3.4. Measures of Agricultural Market Competitiveness

The Global Competitiveness Index 2015–2016 is a composite index ascertaining a country’s productivity level, which serves as the determinant of national prosperity. Gardiner [51] reported nations approaching high productivity and record-high employment rates to be competitive, while Latruffe [20] established that a firm’s competitiveness is considerably affected by productivity. Moreover, Porter [27] stresses that national productivity is the sole representative phenomenon for competitiveness measurement. Just like firms, agricultural productivity is a crucial determinant of agricultural competitiveness. Krugman [45] declares productivity to be a better measure of competitiveness only at the national level and not at the firm level. Most of the studies also rely on trade-related measures of competitiveness. However, Latruffe [20] draws attention to the various components of agricultural competitiveness that need consideration. As a result, relying just on trade- or productivity-related indicators to assess a phenomenon as broad as competitiveness will fall short of the mark. On such grounds, organizations such as the World Economic Forum and the Institute of Management Development have developed global competitiveness indices for country competitiveness evaluation. However, there is still a need for a mechanism for calculating the global agricultural competitiveness index that can rank countries on an annual basis based on their agricultural competitiveness. This index is consequential not only to support the development of the agricultural sector, but also to establish the groundwork for better food and agricultural policies, which are critical for the sustainability of the world food supply. Agricultural competitiveness is quantified with the help of a large number of indicators. Some of those are employed discretely, while others are in clusters. Latruffe [20] has divided agricultural competitiveness measures into two main categories: trade competitiveness measures and strategic management competitiveness measures. The real exchange rate, purchasing power parities, disclosed comparative advantage, derived indicators, and other export and import indices are used as trade metrics. The strategic management measures include cost measures, profitability, productivity, and efficiency. However, agricultural sector competitiveness cannot rely only on Latruffe’s trade measures and strategic management measures of competitiveness since there is a pivotal role of the related and other industries and government policies in this sector’s competitiveness determination [52]. In addition, human resource development, technology, and infrastructure development also serve as key contributors towards the agricultural sector competitiveness. Popescu et al. [53] looked at the macroeconomic dimension of sustainable competitiveness by examining its three determinants: the economic, natural, and social environments. They employ hierarchical cluster analysis to determine their global competitiveness within their framework for sustainable development. Along with GDP per capita, the estimation used a combination of global indicators, including the Global Competitiveness Index, the Human Development Index, and the Environmental Performance Index. However, the study concluded that the current indices did not provide a comprehensive approach for sustainable competitiveness evaluation and that the initiation of a new complex indicator was pivotal.

Coronado [33] measured regional agricultural competitiveness by using six productivity indices, namely, the Water Production Index (WPI); the Economic Index of Water (EIW); the Water and Soil Use Index (WSUI); the Soil Production Index (SPI); Rural Inhabitant’s Financial Profit (RIFP); the Labor Production Index (LPI). Finally, they constructed their regional Agricultural Competitiveness Index (ACI) as an average of the above normalized indices. Nowak and Kaminska [54] used multiple indicators, including agricultural productivity, intermediate consumption, gross investment, fixed assets total value, net farm incomes, the share of exports, trade coverage, and participation in total production, to formulate a synthetic measure for finding the agricultural competitiveness of the European Union’s countries. However, these indices ignored the other related important aspects, such as governance, training, macroeconomic stability, market efficiency, and others, which are significant contributors to a country’s competitiveness according to the global indices. Moreover, the study ignores the most crucial element of climate change during their index construction [18,24].

Babu and Shishodia [55] measured agricultural business competitiveness by combining the three already-developed indices, namely, the World Economic Forum’s Global Competitiveness Index (GCI), the World Bank’s Doing Business Index, and the Balassa index given by Jambor and Babu [56], for agricultural competitiveness. However, they use already-developed indices that are not explicitly designed for the agricultural sector (apart from the Balassa Index) for finding agricultural sector competitiveness. In addition, there is a redundancy of variables between the GCI and Doing Business index, which they have ignored in the measurement.

3.5. Climate Change and Agriculture

There are two impact pathways between climate change and agriculture. First, the impact of climate change on agriculture (temperature, precipitation, rainfall, sunlight hours, and others). Second is the impact of agriculture on climate change (nitrous oxide, methane, and others; pollutants released from the fertilizers and pesticides used during the farming, animal waste, and other activities). The focus of the present study lies in the first pathway. We study the changing climate variables’ impact on agriculture, measuring yield, productivity, price changes, and the resultant market changes. These impacts have been the focal point for the past two decades, where some significant studies were conducted by Easterling et al. [57], Rosenzweig et al. [58], and Porter et al. [59]. During these decades, a range of approaches were used for finding the possible impacts of climate change on agricultural productivity, including model-based (e.g., [32,60,61]) and empirical approaches (e.g., [61,62,63]).

In contrast, according to the author’s current best knowledge, the influence of climate change on agricultural markets, particularly in terms of market competitiveness, has not been well addressed, resulting in a need for the present study.

3.6. Climate Change and Competitiveness

There are two alternative avenues for investigating the climate change–competitiveness relationship. The first is the direct effect of climate change on competitiveness; the second is the indirect effect of climate change mitigation and adaptation programs on competitiveness. The climate change impact measures, as well as mitigation and adaptation policies, are already analyzed in several studies. Some have discussed the impacts upon sectoral competitiveness, covering different sectors such as agriculture, transport, textiles, and others [64], while others [65,66] analyze the industrial competitiveness alone, in addition to studies such as [67], which considers the environment–competitiveness trade-off. There are also studies by Antimiani et al. [68] that find the impacts of mitigation policies upon industrial competitiveness, and studies by Karydas and Xepapadeas [69] and Dechezlepretre et al. [70] that analyze the impacts of environmental regulations on firm competitiveness and climate policies’ impact on competitiveness [71,72]. However, all these studies place greater emphasis on the policy side than on the contribution of climate change in itself. Given this, the present study aims to find out the direct impact of climate change on competitiveness.

3.7. Climate Change and Agricultural Competitiveness

According to the IPCC [73] Special Report, it is predicted that global agriculture will be affected negatively in most of the regions due to climate change. Thus, agricultural welfare and competitiveness are already at risk. However, due to the complexity and multidimensionality of the competitiveness phenomenon, it is complex to measure the direct impact of climate change on agricultural market competitiveness. We found a small number of studies that have examined the implications of climate-induced crop yield changes in agricultural markets and competitiveness [34,35,74,75]. Moreover, most studies have used a single measure, such as productivity, revenue, costs, and others, or trade measures for analyzing the impact of climate change on the competitiveness of the sector.

Calvin [34] analyzed the agricultural market response and its economic welfare implications. He used the existing literature regarding the climate system and how carbon dioxide changes induced crop yield fluctuations. However, the study does not find any clear impact of climate change upon the agricultural sector competitiveness like [76] does, who make clear-cut projections for the changing climate’s impact on the competitiveness of the skiing industry. Goswami et al. [77] develop an index for a sustainability assessment of smallholder farmers.

Tamini [36] analyzed the impact of climate change on some crops and its relation to the country’s relative competitive position. They used partial budgets and the Delphi method. Additionally, they came up with the findings that the impact of climate change was more severe in other competing regions than in the analyzed country. Elsgaard [37] found out the impact of climate change on the cropping shares of wheat, maize, and oat resulting from the different temperature and precipitation levels. Frank et al. [78] provide a consolidated analysis of both demand- and supply-side impacts of climate change on the agricultural sector of Europe. They use partial equilibrium models with a particular focus on Europe and conclude that agricultural demand, supply, and even producer prices will be influenced remarkably by climate change. They contrasted climate change-instigated productivity disturbances against an initial basic framework without climate change and showed a worldwide cutback in the crop supply, along with associated price hikes. However, the European consumers are comparatively not much impacted by climate change with regard to diminishing calorie consumption, while other than Europe, people face elevated foodstuff prices caused by climate change. The general response patterns reflected in the global models clarify that prices are the most sensitive parameter affected by climate change [79]. Despite these shortcomings, the results find a negative effect of climate change upon European consumers and producers through falling productivity and rising prices. However, the paper did not consider the agricultural market competitiveness impact of climate change, which is in close relation to the price changes.

Between 1992 and 2013, the European Union’s agricultural system saw significant changes as a result of the Common Agricultural Policy reform cycle. The operation entailed a gradual but limited and ad hoc deregulation of European agriculture. The reason was that the emphasis was more on dismantling the intervening apparatus than reorganizing, modernizing, and adapting to a more competitive sector. Thus, with such a background, the states were given incentives to formulate policies to accelerate individual competitiveness and innovative capacity under the setup of the Common Agricultural Policy (2014–2020). Under the same framework, Andrés González-Moralejo and Estruch-Sanchís [80] report the basic unseen quantitative and qualitative facts of regional agricultural policy prevalent in Spain. Moreover, the researchers also mark the need for future research to look for viable strategies to boost competitiveness and innovation in the agriculture of the different autonomous communities.

Carraresi and Banterle [30] compared the agricultural sector with the food industry during their assessment of the sector-level competitive performance of the European countries within the European Union’s market. The study aimed to ascertain the European Union’s enlargement and then crisis phase’s effects on EU competitiveness. However, the countries’ competitiveness was determined using a variety of trade indices. These trade indices include export and import market share, revealed comparative advantage, net export index, and Vollrath indices. The findings revealed insignificant changes in the food sector and in agriculture’s competitive performance over the past fifteen years.

Hermans [38] conducted an exploratory study into the crop production of Europe in a liberal world, focusing on climate change and competitiveness dimensions. To evaluate Europe’s agricultural competitiveness, assessments of demography, technology, climate, and international demand for agricultural commodities were used. Indicators such as the economic strength of farms in a region, along with the population pressure on agricultural land, were used to assess the sustainability of agricultural production in a liberalized market scenario. Their findings revealed that, notwithstanding a few unfavorable impacts from climate change, the future food needs could be met with a smaller land area due to the technological progress in the sector.

However, the study examined the future agricultural market scenario in the case of complete liberalization of the same markets, which would entail the elimination of trade barriers and subsidies; it was not focused exclusively on competitiveness. Furthermore, the study focused solely on international competition and commerce, ignoring the sustainability and productivity dimensions of competitiveness. Additionally, the study did not mention the unit of analysis employed to determine agricultural market competitiveness. Additionally, the proxies used to find competitiveness lack significant support in the prior literature. Finally, the study focused exclusively on the agricultural market’s worldwide competitiveness, with no consideration for regional or sectoral competitiveness. Exploratory research is needed to find out more appropriate proxies to better conduct such a study.

Another study by Costinot [39] has used the already-existing Global Agro-Ecological Zones (GAEZ) Project’s agronomic models to sum up the individual impacts of the changing climate on the produce of different countries. The study used micro-level studies to produce macro-level knowledge regarding how climate change affects agricultural markets. Moreover, Costinot [39] relates the implications to comparative advantage and the global dispersion of crops via commerce, using the productivity metrics provided by agronomists as the primary variable of interest before and after climate change. He discovered that by utilizing comparative advantage, there was a possibility to mitigate the negative consequences of climate change. Productivity alone cannot adequately assess an organization’s competitiveness because it is a relative concept that has different possible measurements. Many proxies can be used to measure a company’s success in the marketplace. When it comes to crops’ competitiveness, productivity can only tell us how much they produce, but the loss of product during transit and market dispersion due to inappropriate temperature or other factors can create massive losses in products. Additionally, also included are sections on commerce and comparative advantage. Even though it is not strictly a trade notion, competitiveness can refer to the long-term viability of crops and agricultural markets. Agronomists’ productivity measurements, both before and after climate change, were used to estimate climate change consequences at the micro level. However, the agronomists’ estimates may be skewed by a lack of farm records, memory loss in aged agronomists, frequent land fragmentation, and other factors. To conduct the study, exploratory research was required because the study relied on secondary data, and the proxies employed were not properly established in prior work.

3.8. Proposed Strategies for Agricultural Competitiveness Improvement

Jambor and Babu [56] based their work on the World Economic Forum’s Global Competitiveness Index framework and proposed nine strategies for improving agricultural competitiveness. The study links agricultural competitiveness to organizational working, resource management, infrastructure, technology, management mechanisms, education and health finance, land markets, and market access in their recommended solutions. However, agricultural competitiveness is a multifaceted phenomenon that cannot be quantified solely by agricultural statistics. Additionally, therefore, some more non-agricultural but relevant and related indicators also need to be considered while designing a comprehensive measure of agricultural market competitiveness. However, they did not consider the problem of climate change, which has a significant role in agricultural competitiveness via multiple channels. Moreover, in another study, Barrueto [31] has found the impact of climate change on each stage of the agricultural market system and did not consider the production site changes alone.

3.9. Findings Summary

The study is based mainly on the global literature, with some regional and national studies. It aims to explore the competitiveness concept and its measurement, with specific emphasis on the agricultural sector. Productivity is among the most popular indicators of national/global competitiveness in the analyzed literature [81]. Important global competitiveness indices are also found for the productivity aspect of competitiveness. These include the World Economic Forum’s (WEF) Global Competitiveness Index and the Institute of Management Development’s (IMD) World Competitiveness Yearbook, which are built on the productivity aspect of competitiveness [82]. However, the current study considers the WEF’s GCI to be the most preferred index of global competitiveness due to the comprehensive nature of the index structure [53,55] The GCI is based on a pragmatic approach with a combination of both the survey and statistical data. The IMD’s World Competitiveness Yearbook, despite being a very comprehensive competitiveness measure, is based mainly on statistical grounds with 330 statistical variables measured across the globe. Latruffe [20] and Babu and Shishodia [55] provide a list of measures for finding agricultural competitiveness. Prominent measures are categorized as trade measures (including real exchange rate and purchasing power parities; revealed comparative advantage and derived indicators; other export and import indices) and strategic management measures (including cost measures, profitability, productivity, and efficiency) [20,55]. Among all the measures studied, productivity is the most popular and commonly used measure of agricultural competitiveness according to the author’s knowledge/analyzed literature [33,35,38,39].

3.10. Limitations

We have incorporated all relevant and English-language materials that have been released in the past. The publications that were published in other languages but had an English-language abstract were included in the study. We were unable to include the studies that were conducted in other languages. If these studies were included in the review, it is possible that the findings would differ from those of this study. In our review, we did not make use of multivariate statistics at all. However, we believe that it serves as a baseline study for any future research that may be undertaken in this area.

4. Conclusions

One of the most powerful aspects in eliminating extreme poverty, enhancing mutual well-being, and feeding an expected 9.7 billion people by 2050 is the development of the agricultural sector. In comparison to the other sectors, the expansion of this one has been estimated to be up to four times more successful in raising personal earnings at the lowest strata of society. The 2016 World Bank analyses revealed that 65% of the poverty-stricken adults earn their livelihood through this sector. Furthermore, in 2014, agriculture generated one-third of the world’s gross domestic output. However, all this food security, poverty alleviation, and economic growth generated from the agricultural sector are highly at risk. Changes in the climate are already affecting most agricultural yields, with the most alarming consequences occurring in areas where people are already struggling to obtain enough food. Several factors could imperil the food supply in 2020, such as climate change and warfare, pests, and the growth of infectious illnesses. These factors are expected to put pressure on people’s ability to purchase nutritious meals at a fair price [83].

On the other hand, the analysis of the development of countries is more based on their competitiveness in the current global world. Agricultural and food market competitiveness is becoming increasingly important not just in the developing world, but in the developed world as well. It can have a significant impact on the functioning of such markets, and it is a difficult question to answer. Farmers and food consumers are hit directly by the lack of competition in agriculture and food markets. Among these effects are pricing instability and the processes of price transmission, as well as product accessibility and availability. If healthy competition does not exist in these sectors, government initiatives aimed at the same markets may fail. However, the impacts coming upon farmers might differ among producers depending on the food security measurement tools used [84]. Countries such as Australia, with a well-developed agricultural sector, spend a significant amount of money promoting agriculture’s competitiveness. The Australian government aims to expand agriculture, as outlined in the Agricultural Competitiveness White Paper (2015), which includes investing 4 billion Australian dollars in Australian farmers. According to the white paper, stronger farmers mean a stronger Australian economy [85].

Agriculture’s increased competitiveness can benefit farmers by increasing farm gate returns, enhancing farm infrastructure security and preparedness for disasters, and increasing foreign trade for the country. In addition, it can improve the welfare of consumers by lowering prices and enhancing quality as a result of a competitive market. Each sector’s success, development, and stability can be measured using a different competitiveness measure. However, we cannot find any index for measuring agricultural market competitiveness. Although we found individual measures used to assess agricultural market competitiveness, no composite index has been constructed specifically for this purpose. A composite index, rather than a single indicator, can be used to determine an industry’s competitiveness, as discussed above. The construction of an agricultural market competitiveness index is proposed to be an appropriate measure for analyzing the problem empirically. Schwab and Sala-i-Martin [18] also acknowledge that climate change is a consequential phenomenon that needs to be incorporated into the existing competitiveness indices. Since climate change has considerable effects on agriculture, an index that does not take climate change into account is taking a skewed view of agricultural market competitiveness. Because of this, we are going to include climate change in our proposed index for measuring the competitiveness of agricultural markets. As a result, it will be easier to establish agricultural market-friendly climate policies and secure long-term growth in the industry by maximizing the potential of agricultural markets.