Cash crop
Encyclopedia
In agriculture
, a cash crop is a crop which is grown for profit.
The term is used to differentiate from subsistence crops
, which are those fed to the producer's own livestock or grown as food for the producer's family. In earlier times cash crops were usually only a small (but vital) part of a farm's total yield, while today, especially in the developed countries, almost all crops are mainly grown for cash. In non-developed nations, cash crops are usually crops which attract demand in more developed nations, and hence have some export value.
In many tropical and subtropical areas, jute
, coffee
, cocoa, sugar cane, banana
s, oranges
and cotton
are common cash crops. In cooler areas, grain
crops, oil-yielding crops and some vegetables and herbs are predominate; an example of this is the United States
, where corn
, wheat
, soybean
are the predominant cash crops. Coca
, poppies
and cannabis
are other popular black-market cash crops, the prevalence of which varies. In the United States
cannabis is considered by some to be the most valuable cash crop.
Prices for major cash crops are set in commodity markets
with global scope, with some local variation (called basis) based on freight costs and local supply and demand balance. A consequence of this is that a nation, region, or individual producer relying on such a crop may suffer low prices should a bumper crop
elsewhere lead to excess supply on the global markets.
This system is criticized by traditional farmers. Coffee
is a major part of this.
Issues involving subsidies and trade barriers on such crops have become controversial in discussions of globalization
. Many developing nations take the position that the current international trade system is unfair because it has caused tariff
s to be lowered in industrial goods while allowing for low tariffs and agricultural subsidies for agricultural goods. This makes it difficult for a developing nation to export its goods overseas, and forces developing nations to compete with imported goods which are exported from developed nations at artificially low prices. The practice of exporting at artificially low prices is known as dumping
, and is illegal in most nations. Controversy over this issue led to the collapse of the Cancún
trade talks in 2003, when the Group of 22 refused to consider agenda items proposed by the European Union
unless the issue of agricultural subsidies were addressed.
Cash crop production in the United States is an often debated subject between traditional farmers and local food enthusiasts who support solely local farming practices. Cash cropping in the United States came to the forefront after the Baby Boom generation and the end of World War II as a way to feed the large population boom and continues to be the main factor in having an affordable food supply in the United States. According to the 1997 Ag Census, 90% of the farms in the United States are still owned by families, with an additional 6% owned by a partnership. Cash crop farmers are continually utilizing cutting edge technology combined with time-tested practices to produce healthy, affordable food.
Retrieved from Nepru Working paper #80, The Nambian Economic Policy Research Unit. Hopolang Phororo.
Agriculture
Agriculture is the cultivation of animals, plants, fungi and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key implement in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the...
, a cash crop is a crop which is grown for profit.
The term is used to differentiate from subsistence crops
Subsistence agriculture
Subsistence agriculture is self-sufficiency farming in which the farmers focus on growing enough food to feed their families. The typical subsistence farm has a range of crops and animals needed by the family to eat and clothe themselves during the year. Planting decisions are made with an eye...
, which are those fed to the producer's own livestock or grown as food for the producer's family. In earlier times cash crops were usually only a small (but vital) part of a farm's total yield, while today, especially in the developed countries, almost all crops are mainly grown for cash. In non-developed nations, cash crops are usually crops which attract demand in more developed nations, and hence have some export value.
In many tropical and subtropical areas, jute
Jute
Jute is a long, soft, shiny vegetable fibre that can be spun into coarse, strong threads. It is produced from plants in the genus Corchorus, which has been classified in the family Tiliaceae, or more recently in Malvaceae....
, coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
, cocoa, sugar cane, banana
Banana
Banana is the common name for herbaceous plants of the genus Musa and for the fruit they produce. Bananas come in a variety of sizes and colors when ripe, including yellow, purple, and red....
s, oranges
Orange (fruit)
An orange—specifically, the sweet orange—is the citrus Citrus × sinensis and its fruit. It is the most commonly grown tree fruit in the world....
and cotton
Cotton
Cotton is a soft, fluffy staple fiber that grows in a boll, or protective capsule, around the seeds of cotton plants of the genus Gossypium. The fiber is almost pure cellulose. The botanical purpose of cotton fiber is to aid in seed dispersal....
are common cash crops. In cooler areas, grain
Cereal
Cereals are grasses cultivated for the edible components of their grain , composed of the endosperm, germ, and bran...
crops, oil-yielding crops and some vegetables and herbs are predominate; an example of this is the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
, where corn
Maize
Maize known in many English-speaking countries as corn or mielie/mealie, is a grain domesticated by indigenous peoples in Mesoamerica in prehistoric times. The leafy stalk produces ears which contain seeds called kernels. Though technically a grain, maize kernels are used in cooking as a vegetable...
, wheat
Wheat
Wheat is a cereal grain, originally from the Levant region of the Near East, but now cultivated worldwide. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize and rice...
, soybean
Soybean
The soybean or soya bean is a species of legume native to East Asia, widely grown for its edible bean which has numerous uses...
are the predominant cash crops. Coca
Coca
Coca, Erythroxylum coca, is a plant in the family Erythroxylaceae, native to western South America. The plant plays a significant role in many traditional Andean cultures...
, poppies
Opium poppy
Opium poppy, Papaver somniferum, is the species of plant from which opium and poppy seeds are extracted. Opium is the source of many opiates, including morphine , thebaine, codeine, papaverine, and noscapine...
and cannabis
Cannabis (drug)
Cannabis, also known as marijuana among many other names, refers to any number of preparations of the Cannabis plant intended for use as a psychoactive drug or for medicinal purposes. The English term marijuana comes from the Mexican Spanish word marihuana...
are other popular black-market cash crops, the prevalence of which varies. In the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
cannabis is considered by some to be the most valuable cash crop.
Prices for major cash crops are set in commodity markets
Commodity markets
Commodity markets are markets where raw or primary products are exchanged. These raw commodities are traded on regulated commodities exchanges, in which they are bought and sold in standardized contracts....
with global scope, with some local variation (called basis) based on freight costs and local supply and demand balance. A consequence of this is that a nation, region, or individual producer relying on such a crop may suffer low prices should a bumper crop
Bumper crop
In agriculture, a bumper crop refers to a particularly productive harvest yielded for a particular crop.Example: "With all the rain we've had over the last few months, we are expecting a bumper crop this year."...
elsewhere lead to excess supply on the global markets.
This system is criticized by traditional farmers. Coffee
Coffee
Coffee is a brewed beverage with a dark,init brooo acidic flavor prepared from the roasted seeds of the coffee plant, colloquially called coffee beans. The beans are found in coffee cherries, which grow on trees cultivated in over 70 countries, primarily in equatorial Latin America, Southeast Asia,...
is a major part of this.
Issues involving subsidies and trade barriers on such crops have become controversial in discussions of globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
. Many developing nations take the position that the current international trade system is unfair because it has caused tariff
Tariff
A tariff may be either tax on imports or exports , or a list or schedule of prices for such things as rail service, bus routes, and electrical usage ....
s to be lowered in industrial goods while allowing for low tariffs and agricultural subsidies for agricultural goods. This makes it difficult for a developing nation to export its goods overseas, and forces developing nations to compete with imported goods which are exported from developed nations at artificially low prices. The practice of exporting at artificially low prices is known as dumping
Dumping (pricing policy)
In economics, "dumping" is any kind of predatory pricing, especially in the context of international trade. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market, or in quantities that cannot be explained through normal market...
, and is illegal in most nations. Controversy over this issue led to the collapse of the Cancún
Cancún
Cancún is a city of international tourism development certified by the UNWTO . Located on the northeast coast of Quintana Roo in southern Mexico, more than 1,700 km from Mexico City, the Project began operations in 1974 as Integrally Planned Center, a pioneer of FONATUR Cancún is a city of...
trade talks in 2003, when the Group of 22 refused to consider agenda items proposed by the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
unless the issue of agricultural subsidies were addressed.
Cash crop production in the United States is an often debated subject between traditional farmers and local food enthusiasts who support solely local farming practices. Cash cropping in the United States came to the forefront after the Baby Boom generation and the end of World War II as a way to feed the large population boom and continues to be the main factor in having an affordable food supply in the United States. According to the 1997 Ag Census, 90% of the farms in the United States are still owned by families, with an additional 6% owned by a partnership. Cash crop farmers are continually utilizing cutting edge technology combined with time-tested practices to produce healthy, affordable food.
Retrieved from Nepru Working paper #80, The Nambian Economic Policy Research Unit. Hopolang Phororo.