TY - JOUR

T1 - Falling price induced diversification strategies and rural inequality

T2 - Evidence of smallholder rubber farmers

AU - Jin, Shaoze

AU - Min, Shi

AU - Huang, Jikun

AU - Waibel, Hermann

N1 - Funding Information: We acknowledge the funding support from National Natural Sciences Foundation of China (71761137002; 71673008) and the Huazhong Agricultural University Scientific & Technological Self-innovation Foundation. This study was also conducted in the framework of the Sino-German “SURUMER Project”, funded by the Bundesministerium für Wissenschaft, Technologie und Forschung (BMBF), FKZ: 01LL0919.

PY - 2021/10

Y1 - 2021/10

N2 - 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.

AB - 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.

KW - Income

KW - Inequality

KW - Livelihood diversification

KW - Smallholder rubber farming

UR - http://www.scopus.com/inward/record.url?scp=85107985244&partnerID=8YFLogxK

U2 - 10.1016/j.worlddev.2021.105604

DO - 10.1016/j.worlddev.2021.105604

M3 - Article

AN - SCOPUS:85107985244

VL - 146

JO - World development

JF - World development

SN - 0305-750X

M1 - 105604

ER -