Cash crops (defined as farm output that is sold on a formal agricultural market) are an integral part of strategies to improve food security, both at the level of governments as well as farm households in developing countries with a substantial agricultural sector.
Cash crops bring substantial wage and employment opportunities to the rural economy, even if these are characterised by rather strong income fluctuations. Over time, cash crops provide a stimulus to agricultural innovation, by raising capital for agricultural investment and accelerating the build-up of institutions that enable further commercialisation. An important caveat is, however, that for cash crops to be successful, economic and environmental risks linked to cash crops have to be prevented or limited. This may require various risk-coping strategies. Many farm households balance the benefits and risks of cash crop and food crop production in their cropping decisions to sustain their livelihood and food security.