What is a cash crop? Definition and meaning

A cash crop is a farmer’s crop that is grown for profit, i.e. the aim is to sell the harvest for money, rather than use it for subsistence. A subsistence crop, on the other hand, is there to feed the farmer and family members.

The term is only used for plants, but not livestock.

Apart from large farms and subsistence plots, there are also market gardens. These are small plots of land – the crops are sold for profit.

Farming practices in much of the world today are different to what they used to be. Up to the beginning of the last century, in most advanced economies cash crops represented a very small (but essential) part of a farm’s total production. Today it is the other way round, most of a farmer’s crops are grown for revenue.

Cash CropA cash crop, as opposed to a subsistence crop, earns money for the farmer.

In low-income nations, cash crops are mostly exported to the advanced economies. Subsistence farming – farmers growing crops mainly to feed themselves – still exists today in low-income countries.

Prices for most cash crops are set in international commodity markets, with some variation based on local demand, supply and transportation costs.

Farmers worldwide are at the mercy of global commodity prices – they thrive when demand is high and supply is comparatively low, and suffer when there is a glut and prices plummet.

Cash crop dilemma in developing nations

Farmers in developing nations say it is virtually impossible to compete against the European Union, United States and Canada (advanced economies) because their governments subsidize their cash crops.

Many economists say these subsidies have contributed to the deterioration of agriculture in countries like Mexico, where farmers have abandoned the land and moved to urban areas or crossed the border into the United States looking for work.

Jayati Ghosh wrote in the Guardian newspaper that agricultural subsidies affect the livelihoods and food security of more than 50% of the world’s population.

Cash crops according to regions

Tropics – jute, cotton, oranges, sugar cane, cocoa, coffee, palms (mainly oil palm), mangoes, bananas, papaya and other tropical fruit.

Subtropics – may include some of the plants grown in tropical areas, plus grain crops such as millet and rice, oil-yielding crops (soybeans), and some herbs and vegetables.

Temperate – cereals (oats, wheat, corn, rye and barley), vegetables, several types of fruit (apples, pears, cherries, strawberries, raspberries and blueberries).

Arctic – this part of the world is inhospitable for most agricultural products. One potential cash crop might be Rhodiola rosea (golden root or rose root). It grows in the cold regions of the world, including the Arctic. According to some studies, it may have an antidepressant effect. Demand currently exceeds supply for this perennial flowering plant.

Video – Cash crops in Fiji

This inspiring video shows how a group of women teamed up with an exporter to sell their crops.