Question

why does natural disaster (drought,flood) in an agricultural region almost always result in higher prices for commodities and consumer goods?

Answer 1

There are two features that stand out among the most vulnerable households: they spend a disproportionate amount of their income on food, mostly on staple cereals, and they are net buyers of food. This applies even if they are farmers and produce their own food and sell part of what they grow. Households in high income countries typically spend only a small portion of their income on food, around 10 per cent in the case of the United States, compared to 70 per cent in Tanzania and 50 per cent in India5. The poorest