Falling price induced diversification strategies and rural inequality: Evidence of smallholder rubber farmers

Shaoze Jin, Shi Min, Jikun Huang and Hermann Waibel

World Development, 2021, vol. 146, issue C

Abstract: While the expansions of natural rubber in the greater Mekong region from the 1990s were ambitious, the persistently low commodity price of rubber from 2012 makes smallholder rubber farmers suffer from vulnerable livelihoods. This study sheds light on the adjustments in livelihood strategies of smallholder rubber farmers when the upsurge in rubber prices came to an end. Based on the two-wave panel data from some 600 smallholder rubber farmers in the upper Mekong region, Southern Yunnan province of China, this study shows the diversification strategies of smallholders in response to falling rubber prices and examines the impacts of livelihood diversification strategies on farmer income and rural inequality. The results suggest that smallholder rubber farmers tend to shift family labor from farms to off-farm employment and diversify their livelihoods in the context of declining rubber prices. Notably, farmers with relatively low dependence on rubber are more likely to diversify their livelihoods. The falling price induced diversification strategy makes smallholders more resilient against future risks and narrows the rural income gap. The findings of this study advance the literature by providing evidence on how farmers' livelihood strategy and rural inequality change in the face of periodical rubber price volatility.

Keywords: Livelihood diversification; Income; Inequality; Smallholder rubber farming (search for similar items in EconPapers)
JEL-codes: D63 N35 O12 Q12 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:146:y:2021:i:c:s0305750x21002199

DOI: 10.1016/j.worlddev.2021.105604

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