Food economics
3) market and economic conditions
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Food is a basic necessity good
At the bottom of hierarchy of needs.
Demand is income inelastic.
Consumption does not increase when population's income
increases.
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Instability
Agriculture.
Weather, pests, diseases.
Fluctuations in production (crop).
Drougth in all agricultural countries is very rare.
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Limits for reserves
Limited opportunities for storing products.
Managing, optimising, evening out supply.
Fruit, fresh food.
Storage may involve significant costs.
(Grain stocks play an important role in the stability of the
grain market.)
Reserves are increased or reduced depending on market
situation.
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