Nexus between Awareness of Recommendations and Income from Rubber Cultivation: A Structural Equation Model

Rubber cultivation provides an important source of income for many small farmers in rural areas. In addition, it is a vital source of foreign exchange earnings to the country. However, in the present day rubber is less profitable due to a slump in prices. Cyclical fluctuation in rubber prices is a stylized fact. Therefore, one strategy to keep small farmers in rubber cultivation is to enhance productivity and thereby their income. It is hypothesized that productivity increases can be brought about by improved extension, which creates awareness of recommended technologies and practices in rubber cultivation. With this background, this research studied whether ‘Awareness’ has an impact on productivity and through that on farm income. For this data were collected from a sample of 206 smallholder rubber farmers from Kegalle District, which is one of the major rubber growing districts in Sri Lanka. The Structural Equation Model constructed show that there is a considerable impact by awareness on relevant technologies in improving farmer productivity. But the indirect effect of awareness on farm income through productivity is weak in the sample of data analyzed. Thus, policies geared towards increases in productivity should be coupled with policies related to the marketing of rubber for the small farmers to truly benefit and survive the price shock.