Cash Crops

Cash Crops, agricultural produce grown for sale or barter rather than for subsistence needs. They can be food crops, but are more usually grown for processing into food and drinks, or for industrial purposes.

Cash crops include: crops grown for their raw materials, which are then processed into food and drink, such as sugar, tea, coffee, and cocoa; vegetable crops, including potatoes, salads, and root vegetables; fibre crops, such as cotton and sisal; industrial crops, such as rubber and tobacco; fruit crops; spices; and plants grown for their oil, such as oil palm.

Most of the agricultural output in the developed world can be considered cash crops and the term is often used to distinguish them from crops grown to feed livestock on the farm. Cash-crop farmers try to maximize yield per hectare by farming on a large scale, employing highly mechanized production techniques, and often by growing only a few crops (or even a single crop). Cash cropping is most successful in regions where transport is well developed, there is a large and expanding domestic market, and opportunities for export exist. Annual cash crops, such as cotton, sunflowers, and vegetables, are grown as part of a cropping rotation, whereas tree crops, for example oil palm, tea, and cocoa, are often grown on plantations with their own processing factories.

Cash crops are not confined to large holdings—many smallholders (see Smallholding) throughout the world produce crops for sale. For example, in Kenya there is a successful smallholder tea scheme, where part of each small farm is set aside for the growth of a few tea bushes and the leaf is delivered to a central factory for processing. In Malaysia, smallholders are involved in growing oil palm, rubber, and cocoa, and in Central America, cotton is often grown on small farms.

In developing countries a great deal of farm output is consumed directly by the farming family. Although cash crops are popular with governments in the developing world because they generate much-needed foreign exchange, there are serious disadvantages. The cash cropping competes for the best land and limited resources with food crops that are directly consumed by the farming family. In addition, small farmers who concentrate on the production of a single cash crop are vulnerable to world price fluctuations. When a single crop is grown almost exclusively by the bulk of a farming community, a price fluctuation or crop failure can cause serious economic problems for the entire country. Ghana for many years was over-dependent economically on its chief cash crop export, cocoa, leading to severe economic repercussions in the late 1960s when the price of cocoa fell. Many governments have attempted to avoid this problem by diversifying their agricultural exports. The dependency on cash crops can also lead to increased food imports, as in São Tomé and Príncipe, where the domination of cash crops for export has led to the import of 90 per cent of the country’s food.