Economics

What Is A Cash Crop?

A cash crop is a crop that is sold in the market to earn profits, and are an important source of revenue in the country where it is grown.

What Is A Cash Crop?

A cash crop is one that is cultivated to be sold to gain profit from the sale. The term helps to distinguish crops grown for commercial gain from the subsistence crops which are mainly grown to feed the farmer and his family with little left to be sold in the market. In the past, most crops were grown as food for the producer and his family. However, most of the crops grown today, especially in the developed world, are cash crops which are sold in the national or international markets to earn profits. Most of the cash crops cultivated in the developing nations are primarily exported to the developed economies.

What Determines The Price Of Cash Crops?

Prices of cash crops are determined in international commodity markets. Thus there is little scope to take the local price variations into account. Hence, farmers who produce good quality crops by spending the least are the biggest gainers in the cash crop industry. Often, individual producers, local markets, and countries suffer a great blow when a bumper crop of the same commodity is produced elsewhere leading to an excess supply of the crop in the international markets.

Cash Crops Of World’s Eco-climatic Zones

  • Cash Crops Of The Arctic: The large-scale cultivation of crops for commercial purpose is usually not possible in the harsh Arctic conditions. However, a few crops like the Rhodiola rosea, a medicinal herb grown here, is sold as a cash crop with its demand exceeding supply under the present conditions.
  • Cash Crops Of The Temperate Zone: A large number of cash crops are grown in the temperate ecoregions of the world. These include cereals like wheat, corn, oats, etc.; vegetables like potatoes, fruits like cherries, apples, strawberries, etc., and oil-yielding crops like mustard, rapeseed, etc.
  • Subtropical Area’s Cash Crops: Examples of some notable cash crops in the subtropical areas of the world include soybeans, a few herbs, etc.
  • Cash Crops Of The Tropical Zone: A variety of crops like bananas, cocoa, coffee, sugar cane, cotton, jute, oranges, oil palm, etc., are grown in the tropical areas of the world to give high yields of these tropical crops.

Cash Crops In The Black Market

Several cash crops are sold in the black market. It includes cannabis, opium poppies, and coca.

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