An analysis of smallholders' rubber marketing in the east coast of peninsular Malaysia

Abstract

This thesis investigates the marketing practices, marketing costs and revenues of 62 first level dealers and 228 smallholders selected in 4 districts in the states of Kelantan and Trengganu on the East Coast of Peninsular Malaysia. Its findings are compared to those previous studies by Lim (1968) and Cheam (1970) on the 'developed' West Coast. Chapter 1 states the aims of the study, then discusses the sample design and data collection method. Chapter 2 deals with factors affecting smallholders' production of rubber. The major factors are holding size, planting materials and age of trees. It then shows how production (output) per smallholder influences his processing and marketing practices. It also discusses the marketing channel for smallholders' rubber in the study areas. Chapter 3 reviews the marketing costs found in each locality of this study and compares them to those by Lim and Cheam. It indicates economies of scale in rubber marketing by constructing cost curves which are mathematical relationships between costs and marketing and annual volumes of trade. Chapter 4 show that dealer's gross revenues are positively related to their annual volumes of trade; this is done by constructing an annual gross revenue curve. The optimum volume of trade is estimated by equating marginal costs. The chapter then deals with the effects of economies of scale on dealers' buying prices, market competitions, market information and dealers' rate of returns. Chapter 5 analyses the relationship of dealers' buying prices and net f.o.b. prices, from January 1968 to December 1971. It also investigates the above relationship during the periods of rising and falling prices and denotes that the relationship in these two periods are different. Chapter 6 summarises the major findings of the thesis and forwards some suggestion for improvements. Among others, it encourages dealers to deal with high volume of trade, as economies of scale are found to benefit both dealers and smallholders.