Produce cut when Pence intervenes (5)
I believe the answer is:
spawn
'produce' is the definition.
(I've seen this before)
'cut when pence intervenes' is the wordplay.
'cut when' becomes 'sawn' (I've seen this before. I am not sure about the 'when' bit.**).
'pence' becomes 'p'.
'intervenes' means one lot of letters goes inside another.
'sawn' going around 'p' is 'SPAWN'.
(Other definitions for spawn that I've seen before include "Product" , "Deposit mass of eggs" , "Mass of eggs laid in water" , "set off" , "Give birth" .)