Risk assessment of the economic efficiency of rubber production: Case of smallholder rubber production in QuangBinh Province, Vietnam

Abstract

The paper reviews the economic risk of rubber production due to fluctuations of input factors, product price, natural disasters, epidemics, interest rates, and market demand. The data collected in this work were analyzed with accounting of production costs methods and accounting results and production efficiency method, benefit-cost analysis, sensitivity analysis and scenario analysis. QuangBinh, a province in Vietnam was used as the case study of this research; the area has great potential to develop smallholders producing rubber. QuangBinh rubber smallholders play an important role in developing local economy and creating jobs. However, this model has been facing risks, leading to a low economic efficiency. The study evaluates the overall economic efficiency of smallholder rubber production and business in Quang Binh Province in the context of risks: product price risk and interest rate risk. It also analyzes the relationship between selling price and interest rate with economic efficiency of smallholder rubber production.