For the 800 million people who go to bed hungry every night and many more at risk of extreme poverty, a single drought, flood of other disaster could wipe out the means they have to feed themselves. For agricultural families, even a risk of these disasters can create hardship. A family’s future can depend on the tools they have to manage these risks.
For a family without effective tools to manage risk, a disaster can create immediate hardship as well as lingering effects. The family may have to choose what assets to sell or who eats and how much. The shock may also damage psychological capacities, further undercutting their economic well-being.