If you deal with extensive farming, you will most likely come across the term cash crops. In this article you will find out what cash crops are and what role they play for some countries. The topic belongs to the subject geography and is assigned to the field of agriculture. More specifically, the topic belongs to the area of extensive agriculture.
Agriculture definition
Agriculture describes the targeted production of animal and plant products. This happens on an area cultivated for this purpose. In agriculture, land and livestock as well as labour, capital and know-how are seen as factors of production.
Cash crops definition
Cash crops are agricultural products produced for the market. These products are not for self-sufficiency, but are grown to make a profit. These products are also called export fruits (from cash = cash).
The term cash crops stands for the cultivation of high-quality agricultural products that are used exclusively for export to the world market, as they meet the demands of the world market. They are in contrast to food crops.
You will find our own article on the subject of food crops.
Cash crops can be divided into semi-luxury foods, industrial crops, spices and food crops. Examples of typical cash crops are grains, oilseeds, coffee, cocoa, sugar, vegetables and fruits (e.g. avocados and oranges), peanuts, cotton and tobacco.
Cash Crops influence world agricultural market
To understand why cash crops have become so important over time, consider the development of the global agricultural market. One also speaks of the food regime approach.
A world agricultural market has existed since the second half of the 19th century. However, the nature of trade flows has changed several times since then. There are three distinct phases referred to as Food Regimes. Each phase stands for a specific pattern of production, trade and consumption that does not change over a certain period of time.
1. Food regimen
The 1st Food Regime can be classified in the period from 1850 to 1920. In today’s industrialized countries, industrialization progressed extremely and at the same time the importance of agriculture decreased. Raw materials in the form of food and industrial raw materials from the developing countries were traded on the one hand, and finished goods from the industrialized countries on the other.
2. Food regimen
With the further expansion of the world agricultural market, the dominance of globally active corporations increased. Above all, Unilever, Del Monte and Kellog should be mentioned here. Agriculture and industry virtually merged into one another. In the industrialized countries, the mass production of goods began, which was accompanied by a progressive substitution of tropical raw materials. The industrialized countries with overproduction on the world market at dumping prices. The 2nd Food Regime lasts until around the mid-1970s.
3. Food regimen
The 3rd Food Regime is characterized by an increasing concentration of global trade relations both for industrial products and for the agricultural sector. Technical advances in agriculture and food technology, including biotechnology and genetic engineering, are the determining factors in this phase.
While new mass markets are emerging in the developing countries, the markets in the industrialized countries are becoming increasingly differentiated. Consumer awareness of ecological and social issues is increasing. Internationally active companies have to adapt flexibly and quickly to the new conditions.
The Food Regime approach shows the change from classic south-north trade to a multi-layered system due to the diversification of consumption. With the new dimension of trade, new sales opportunities arise, especially for small and medium-sized agricultural businesses in the tropics and subtropics. Some developing countries try to participate in world trade by growing and selling food crops.
Cash Crops Benefits
One benefit of cash crops is that farmers often get cash from the middlemen for their produce. The cash received from the farmer for his cash crops can be used to pay back the loan, buy seeds, fertilizer, etc. This encourages farmers to cultivate multiple crops in a year for cash benefits.
Cash Crops Cons
Cash crops are grown on large areas in monocultures. This results in an artificial maintenance of soil fertility through the increased use of fertilizers.
Agricultural, horticultural or forestry areas are referred to as monocultures on which only a single crop species is cultivated for several years in a row.
Another disadvantage of cash crops is the use of large-scale agricultural technology that deeply furrows the soil. This has a lasting effect on soil fertility and promotes erosion. There are financial reasons why cash crops are grown in areas that are not suitable for them.
Because cash crops can only be used to make profits if the demands of the world market are met. Also, lease fees often have to be paid to the landowner.
Especially in developing countries, cash crops are grown in large quantities and often compete with the needs of their own population.
Cash Crops Germany
On the export market, Germany is one of the leading buyers of their raw materials for numerous African countries, with a share of around 5 to 15 percent of the export volume.
Cash crop coffee
Germany is one of the largest importers of green coffee. In 2016 around 1.1 million tons worth 3 billion euros were imported. In comparison, the world production of coffee was 9 million tons. The coffee was mainly sourced from South America.
Cash Crop Tee
Germany imports around 58,000 tons of tea worth around 200 million euros a year. Global production is around 5.4 million tons. About 14 percent of imports come from Africa. The majority of tea, on the other hand, comes from India and China.
Cash crop cocoa
Germany obtains raw cocoa almost exclusively from West Africa. More than half of the imports come from the Ivory Coast. In 2015 it was around 52 percent.
Cash crop tobacco
Germany imports the raw tobacco for processing mainly from abroad. This is then processed beforehand and stored here in large quantities in a storable condition. Tobacco imports from Africa account for less than 1 percent of total imports in the area.
Cash crop cotton
Germany is the leader in cotton imports. The import value in 2016 was almost EUR 1 million. About two thirds of this came from Asia. The share of African countries is so far only small.
Would you like to learn more about agriculture? Then take a look at our articles on the Green Revolution, factory farming, subsistence farming or organic farming.
Cash Crops – The most important things at a glance
- Cash crops are agricultural products produced for the market
- These products are not for self-sufficiency, but are grown to make a profit
- Cash crops can be divided into semi-luxury foods, industrial crops, spices and food crops
- The advantage of cash crops is that they are paid in cash
- Cash crops bring disadvantages such as soil erosion, deterioration of soil fertility, increased use of fertilizer
- Germany is one of the leading importers of cash crops from Africa