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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 predominate; an example of this is the United States, where corn, wheat, soybean are the predominant cash crops. Tobacco has historically been a cash crop, though with increased pressures from anti-tobacco activists, it has declined in popularity; the largest profiters from tobacco today tend to be governments, which in many places add taxes that more than double the cost of tobacco products. Coca, poppies and cannabis are other popular black-market cash crops, the prevalence of which varies. In the United States cannabis is considered the most valuable cash crop.[1]

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 high 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 CancĂșn 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.

Agribusiness, with its high-capital-investment and industrial-scale agricultural practices, very often skews production towards cash crops and away from anything that is consumed locally or which cannot be preserved, shipped and sold abroad. When used in conjunction with practices which seek to maximize crop yield and which favor monoculture, increasing reliance on cash crops is seen by some to have adverse, long term environmental consequences. The prevalence of cash crops also makes ethical consumerism difficult, as production practices cannot easily be determined and removed.

While there are many advantages to cash cropping, it may also result in the farmers of these cash crops, as well as their families, finding themselves unable to eat due to a lack of diverse production. Additionally, the heavy focus on exports that comes along with cash cropping may result in a shortage of locally available food, making the price of food significantly higher for the farming families, as well as other locals.

Retrieved from Nepru Working paper #80, The Nambian Economic Policy Research Unit. Hopolang Phororo.

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