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, bananas, 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 tariffs 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.
WHY AFRICA GOES HUNGRY
All of us have seen the famine pictures from Ethiopia and the Sudan. We know people are starving; we’ve responded generously with food aid. A “natural disaster” or “act of God”, we tell ourselves, as if the famine has been a freak, one-off event. We assume that when the rains come again, everything will be all right.
But it won’t.
The truth is that not just Ethiopians but many millions of Africans, from Mauritania across to Somalia, face starvation. And the underlying cause is not drought. The real roots of the famine lie with the people and the way they have used, and abused, the land. The recent drought has simply aggravated what is largely a political and economic problem.
Even in Kenya, one of the more wealthy Black African nations, food shortage is a growing problem. In fact the tragedy that is unfolding in Kenya is typical of what’s happening in an estimated 20 other countries on the southern fringes of the Sahara. The popular images of Kenya - lions, avocados, coffee - imply rich grasslands and good farming. But less than 20 per cent of Kenya’s land has high or moderate agricultural potential. Even so, there is enough good farmland to meet the nation’s growing food needs. So what has gone wrong?
One reason is that cash cropping is increasing. A large proportion of farmland is devoted to coffee, tea, pyrethrum, pineapples and to raising other cash crops in order to earn much - needed foreign exchange on the export market....
Please join StudyMode to read the full document