Cash crop

From Wikipedia, the free encyclopedia For the Rascalz album, see Cash Crop (album). This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (January 2010)

Yerba mate (left), coffee and tea (right), all used for caffeinated infusions, have cash crop histories.

Cotton is the main cash crop in central India. 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.[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 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 Cancn 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. Cash crop production in the United States is an often debated subject between traditional farmers and local food enthusiasts who support solely local farming practices. Cash cropping in the United States came to the forefront after the Baby Boom generation and the end of World War II as a way to feed the large population boom and continues to be the main factor in having an affordable food supply in the United States. According to the 1997 Ag Census, 90% of the farms in the United States are still owned by families, with an additional 6% owned by a partnership.[2] Cash crop farmers are continually utilizing cutting edge technology combined with time-tested practices to produce healthy, affordable food. Retrieved from Nepru Working paper #80, The Nambian Economic Policy Research Unit. Hopolang Phororo.

Commercial agriculture
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Commercial Agriculture refers to a process of large-scale production of crops for sale, intended for widespread distribution to wholesalers or retail outlets. In commercial farming crops such as wheat, maize, tea, coffee, sugarcane, cashew, rubber, banana, cotton are harvested and sold into world markets. Commercial agriculture includes livestock production and livestock grazing. Due to the expensive nature of capital formation and implementation of technological processes, the landowners of such farms are often large agricultural corporations (especially in developing countries). Large-scale commercial farming, in terms of some of its processes, may be conceptually not very different from large industrial enterprises; United Fruit Company (now Chiquita Brands International) is an example. Commercial farming is most commonly found in advanced industrialized nations. The harvested crop may be processed on-site (or shipped to a processing facility belonging to the farm owners) and then sold to a wholesaler as a complete product, or it may be sold as-is for further processing elsewhere. Commercial Agriculture differs significantly from subsistence agriculture, as the main objective of commercial agriculture is achieving higher profits through economies of scale, specialization, introduction of capitalintensive farming techniques, labour-saving technologies, and maximization of crop yields per hectare through synthetic and natural resources (fertilizers, hybrid seeds, irrigation, etc.).

Contents
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1 Development 2 Types 3 Factors 4 See also

Development
Commercial farming is a progression from diversified (sometimes called mixed) farming, where the farmer's intention is to produce goods for sale primarily for widespread consumption by others. The farmer may acquire a sufficiently large amount of arable land and/or sufficiently advanced technology. In advanced countries, there is also investment in expensive capital equipment like tractors, harvesters and so forth. At this point, it may become more profitable for the farmer to specialize and focus on one or a few particular crops due to economies of scale. This may be further augmented by higher levels of technology that might significantly reduce the risk of poor harvests. Thus, the key difference between commercial farming and less-developed forms of agriculture is the new emphasis on capital formation, scientific progress and technological development, as opposed to a reliance mainly on natural resource utilization that is common to subsistence and diversified agriculture.

[edit] Types
There are types of commercial agriculture:

Intensive Commercial Farming: A system of agriculture in which relatively large amounts of capitol or labour and applied to relatively smaller areas of land. It is practiced in countries where the population pressure is reducing the size of landholdings. The State of West Bengal in India provides one of the best examples of intensive commercial farming. Extensive Commercial Farming: It is a system of agriculture in which relatively small amounts of capital or labour investment are applied to relatively large areas of land. At times, the land is left fallow to regain its fertility. It is mostly mechanized as labour is very expensive or may not be available at all. It usually occurs at the margin of the agricultural system, at a great distance from market or on poor land of limited potential. It is practiced usually in the tarai regions of southern Nepal. Crops grown are sugarcane, rice and wheat. Plantation Agriculture: Plantation is a large farm or estate usually in a tropical or subtropical country where crops are grown for sale in distant markets rather than local consumption.

Factors
Commercial agriculture contains six key factors: 1. Location Commercial farms must move their products to market. Farms need to be located near transportation systems. Trucks, ships, planes, and trains are several ways that products can be moved from where they are grown or made to where customers can buy them. 2. Climate A farm's soil, as well as the climate of the region in which it is located, determine what crops will grow there or whether the land can support livestock. The temperature and rainfall can also determine the type of crop grown. For example, oranges must be grown in a hot climate. They will not grow if the temperature is too cold. 3. Raw Materials A commercial farm depends on raw material. For example, a farmer will plant grain to get wheat. A farmer will have dairy cows to produce milk. Seeds and animals are two examples of raw materials used in commercial agriculture. 4. Market Forces

Supply and demand are important for selling agricultural products. If there is a high demand for a product and low supply, the price will be increased. 5. Labour People who work on farms provide different types of labour. Labour is needed to plant crops, as well as to harvest them. This is important because some produce, such as grapes, need to be hand harvested. 6. Transportation Movement of agricultural products to market depends on transportation systems. For example, produce is shipped by rail in special refrigerated cars, then shipped across the ocean. Some crops. such as fruit, must get to the market quickly, or else they will rot; crops like these are often shipped shorter distances or are sold in the regions where they are grown.