Abstract

Subsistence economy enables rural households to live with lower amount of cash but this economic regime may promote less efficient utilizing of land and forest resources because of ambiguous legal status of land ownership. Granting land ownership to the farmers to promote cash crop production would lead to a reduction in food crops production. This study assumed that in a transitional process from subsistence economy to commercial rubber tree cultivation in Northern Laos, greater amount of cash obtains from rubber would be accompanied by greater amount of cash spent on foods at the market as a result of a reduction in food crops production. This may further degrade the real amount of income from rubber. Ratio of the non-food expenditure of the household in rubber tree planting village to the household in the subsistence village employs as an indicator to indicate livelihood changes as a consequence rubber tree cultivation. The results confirm that higher income do accompany by greater amount of cash spent on foods. However, the greater amount of food expenditure only slightly degrades household income in the rubber tree planting village. In conclusion, shift to rubber tree plantation would improve livelihoods of smallholder after rubber trees became productive.