Farmers' income may fall if they produce more cash crops for export because?

Answer Details

Farmers' income may fall if they produce more cash crops for export because of foreign demand inelasticity. In other words, if the demand for the cash crops they produce for export is relatively insensitive to changes in price, an increase in the quantity supplied may not necessarily result in a proportional increase in revenue. This is because the increase in supply will likely cause a decline in the price of the cash crops, which could lead to a fall in the farmers' income. Additionally, the production of cash crops for export may divert resources from the production of food crops for local consumption, leading to food insecurity and a reduction in farmers' income.