Conditional effects of cross-product substitution on systemic risk in multilayer food trade networks

TL;DR

This paper models how cross-product substitution in multilayer food trade networks affects systemic risk, revealing complex responses from resilience to crisis depending on multiple factors.

Contribution

It introduces a multilayer network model to quantify the effects of cross-product substitution on systemic food trade risks under shocks.

Findings

Substitution mitigates risks in the shocked layer but creates risks in substitutes.

Four response regimes range from resilience to systemic crisis.

Country-level heterogeneity affects substitution effectiveness.

Abstract

Localized shocks arising from climate extremes, geopolitical conflicts, and trade protectionism cascade through trade networks, triggering global food crises. Cross-product substitution, a critical response strategy, induces cross-product cascading effects that remain underexplored. Here, we develop a multilayer network model that simulates the short-term response to food supply shocks. When applied to cereal trade networks, comparisons with and without substitution, as well as with increased substitute layers, reveal that substitution mitigates risks in the shocked layer but induces derived risks in substitute layers, causing the network system to present four response regimes ranging from resilient to systemic crisis. These regimes' boundaries and magnitudes emerge from the interplay of four critical factors: shock intensity, substitution extent, supply capacity of substitute layers, and inter-layer substitution structure. Scenario simulations of three real-world shocks further reveal country-level heterogeneity in substitution effectiveness. Our framework provides a quantitative tool for designing response strategies and resilient food systems.