cash crops. explanation history economics activity!
TRANSCRIPT
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Cash Crops
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Cash Crops Explanation History Economics Activity!
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Cash Crops - Explanation Cash Crop = An agricultural crop which is
grown for profit Different from subsistence crops, which
are used to feed the producer’s livestock or grown as food for the producer’s family
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Cash Crops - History In earlier times, cash crops were only a small part of a
famer’s yield Now, almost ALL crops are mainly grown for revenue
Why….??? Past Reason: During the Age of Imperialism, European
nations needed raw materials. They encouraged/forced nations to develop cash crop plantations to grow peanuts, palm oil, cocoa and rubber. These products displaced the food crops grown by farmers to feed their families
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Cash Crops - Economics
Another Past Reason: Let’s go back to WWI & WWII…..
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WWI & WWII A world war is a war that affects most of the
world's most powerful and populous countries WWI: 1914-1918
Allies: Based on the Triple Entente of the United Kingdom (its colonies), France and Russia
Central Powers: Originally the Triple Alliance of Germany, Austria-Hungary and Italy
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WWI & WWII WWI
Causes: Imperialism & Alliances Over 9 million killed Results:
League of Nations was created European nationalism spawned by the war The breakup of empires Repercussions of Germany's defeat Problems with the Treaty of Versailles
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WWI & WWII WWII (1939-1945)
Allies: UK (and its dominions), USA, France, Poland, the USSR… and more
Axis: Nazi Germany, Italy, Japan Over 70 million killed – the deadliest conflict in all of
human history Results
The League of Nations turned into the United Nations… where the great powers that were the victors of the war—the United States, Soviet Union, China, the United Kingdom, and France—became the permanent members of the United Nations Security Council
Israel was created
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Post WWI and WWII Agreements and Organizations
TRIED TO CREATE PEACE & STABILITY
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United Nations “An international organization whose stated aims are
facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace”
Founded in 1945 after WWII Three specialized agencies:
IMF (was arranged at Bretton Woods) World Bank WTO
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IMF Provides financial assistance to countries in financial trouble Provides loans and/or organizational management In return, it demands domestic reforms in the name of
structural adjustment programs (SAPs) The emphasis is almost always on capitalist ideas/programs… Very controversial…
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World Bank Provides loans at preferential rates to member countries
and grants to very poor countries Loans or grants for specific projects are often linked to
wider policy changes in the sector or the economy… Often criticized at being a US or Western tool for imposing
economic policies that support Western interests… Faulted for undermining the national sovereignty of recipient
countries through various SAPs…
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WTO General Agreement on Tariffs and Trade
(GATT) Purpose: To regulate international trade
World Trade Organization (WTO) Followed & extended GATT’s rules Promotes lower trade barriers Helps negotiate trade and business disputes
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WTOFundamental principles of trading:
Free of discrimination: One country cannot prefer a particular trading partner above others within the system, nor can it discriminate against foreign products and services.
Freedom: Fewer trade barriers and less tariffs Predictable: Foreign companies and governments know
that trade barriers will not be raised arbitrarily and that markets will remain open
Greater competition Go easy on the poor: More accommodating for less
developed countries, giving them more time to adjust, greater flexibility, and more privileges.
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The European Union
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The European Union A supranational political and economic union of 25
sovereign democratic countries Defining Element: Common Currency
Makes travel and trade much easier A ‘force for peace and democracy’
Taken in countries from the former Iron Curtain Countries must be willing to give up sovereignty
(politically and economically)…
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Furthering and improving their single market Example: Free trade
Problems? Greece: Massive overspending Spain: Housing bubble (House prices rose 44% from 2004 to 2008 and since
the bubble burst they have fallen by a third)
Now: Euro Crisis
EU Policies
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NAFTA Free Trade Agreement between Canada, US, and Mexico
Free Trade: A policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas
Established in 1994 Eliminates duties on most goods Works to reduce subsidies and promote fair competition
between all countries
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Lack of autonomy! Forced to trade & use goods against its will!
Gas additive that is harmful was banned by the Can. Gov’t.
Taken to court by company and had to pay $13 million and repeal ban!
NAFTA… Problems?
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Maquiladoras What are they?
Manufacturing operations in a free trade zone (FTZ), where factories import material and equipment on a duty-free and tariff-free basis for assembly, processing, or manufacturing and then export the assembled, processed and/or manufactured products, sometimes back to the raw materials' country of origin = USED FOR CHEAP LABOUR
How is NAFTA involved? Non-NAFTA materials imported into Mexico for assembly/processing are
subject to the same duties as if they were permanently exported to Mexico
NAFTA… Problems?
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Cash Crops - Economics
Why did Cash Crops get so popular….???
Trade liberalization!!! Economic freedom = peace!
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Cash Crops - History
A Current Reason: 1950s & 60s: Governments and encouraged recently independent
African nations to borrow huge amounts of money… 1970s & 80s: Economic downturn… many African countries were
unable to repay even the interest on their loans. The World Bank imposed a "solution" : increase cash crops! Cash
crops would be sold on the international market and the income would help to repay the national debt and pay for cheaper imported food.
Result: disaster!!! In some countries, such as Tanzania, many were forced to grow coffee rather than food
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Cash Crops - History
OVERALL REASONS ImperialismTrade liberalizationWorld Bank lending & corruption
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Video Time!
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Activity!Research and find evidence that supports that having a one-crop economy makes people vulnerable. Include the following examples:
Can cause environmental damage: Soil degradation in America due to tobacco cultivation
Can be too vulnerable to crop diseases: The Irish potato famine
Can be too vulnerable to world economics: Fluctuations in the world price for a product
Can be too vulnerable to natural disasters: Hurricane Mitch in Honduras