Cash crop

A cotton ball. Cotton is a significant cash crop. According to the National Cotton Council of America, in 2014, China was the world's largest cotton-producing country with an estimated output of about one hundred million 480-pound bales.[1]

A cash crop, also called profit crop, is an agricultural crop which is grown to sell for profit. It is typically purchased by parties separate from a farm. The term is used to differentiate a marketed crop from a staple crop ("subsistence crop") in subsistence agriculture, which is one 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 developed countries and among smallholders almost all crops are mainly grown for revenue. In the least developed countries, cash crops are usually crops which attract demand in more developed nations, and hence have some export value.

Prices for major cash crops are set in international trade markets with global scope, with some local variation (termed as "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 has been criticized by traditional farmers. Coffee is an example of a product that has been susceptible to significant commodity futures price variations.

  1. ^ USDA-Foreign Agriculture Service. "(Cotton) Production Ranking MY 2011". National Cotton Council of America. Archived from the original on April 15, 2012. Retrieved April 3, 2012.

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