|
Q: How does the economic damage from droughts compare with the damage from other natural disasters? A: Hurricanes and earthquakes can reduce economic growth by disrupting production and consumer spending. But once the earth has stopped shaking and the winds have died down, communities can rebuild, boosted by insurance payouts and federal aid. Reconstruction can help the overall economy. By contrast, crops killed by drought can't be recovered. "It's a one-shot-a-year production practice for corn and soybeans," said Todd Davis, an economist at the American Farm Bureau Federation. Q: Have farmers' incomes suffered? A: Despite the drought, the U.S. Agriculture Department expects farm incomes to hit $122 billion this year, highest since 1973 when adjusted for inflation. They've benefited from higher prices for their crops and livestock. And government-subsidized crop insurance helps cushion the damage. Congress has been promoting crop insurance since the 1990s, notes economist Mekael Teshome of the PNC Financial Services Group. Q: What is the effect on American consumers? A: Prices for corn and soybeans in commodity markets have probably just about peaked, PNC says. But it will take three to six months for higher food prices to work their way through the food chain, says Dutta of Moody's. The Agriculture Department expects food prices to rise between 3 percent and 4 percent next year. That would be up from an average of 2.5 percent to 3 percent over the past 20 years.
[Associated
Press;
Copyright 2012 The Associated
Press. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
News | Sports | Business | Rural Review | Teaching & Learning | Home and Family | Tourism | Obituaries
Community |
Perspectives
|
Law & Courts |
Leisure Time
|
Spiritual Life |
Health & Fitness |
Teen Scene
Calendar
|
Letters to the Editor