The Economics of Smallholder Rubber Farming in a Mountainous Region of Southwest China: Elevation, Ethnicity, and Risk

Abstract

While the expansion of smallholder rubber farming in southwest China has contributed to the local rural economy, it has also had negative environmental consequences. The economics and potential risks of smallholder rubber farming remain unclear due to the lack of quantitative evidence. Based on data collected in a comprehensive survey of 612 smallholder rubber farmers in Xishuangbanna, this paper quantifies economic aspects of rubber farming including land use, inputs and outputs, household income composition, and risks. In particular, we compare differences in these parameters associated with ethnicity and elevation. Our results suggest that rubber has taken over the rural economy in the rubber-planting region of Xishuangbanna, where almost 80% of agricultural land is devoted to rubber. On average, rubber farming provides over 40% of smallholder incomes. While smallholder rubber farming is generally highly profitable, it is also highly vulnerable to price fluctuations. Rubber expansion has also reduced diversification and thereby increased household income risk. Most importantly, our analysis shows that the economic performance of smallholder rubber farming differs for different ethnic groups and at different elevations. The results of this study provide important quantitative information on smallholder rubber farming that can inform policymaking and guide future research.