Rubber specialization vs crop diversification: The roles of perceived risks

Purpose: The purpose of this paper is to examine the impact of farmers' risk perceptions regarding rubber farming on their land use choices, including rubber specialization and crop diversification. Design/methodology/approach: A cross-sectional survey data of some 600 smallholder rubber farmers in Xishuangbanna in Southwest China is employed. This paper develops a general conceptual framework that incorporates a subjective risk item into a model of farmers' land use choices, thereby developing four econometric models to estimate the role of risk perceptions, and applies instrumental variables to control for the endogeneity of risk perceptions. Findings: The results demonstrate that risk perceptions play an important role in smallholders' decisionmaking regarding land use strategies to address potential risks in rubber farming. Smallholders with higher risk perceptions specialize in rubber farming less often and are more likely to diversify their land use, thereby contributing to local environmental conservation in terms of agrobiodiversity. The land use choices of smallholder rubber farmers are also associated with ethnicity, household wealth, off-farm employment, land tenure status, altitude and rubber farming experience. Originality/value: This study contributes to a better understanding of the implications of farmers' risk perceptions and shows entry points for improving the sustainability of rubber-based land use systems.