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Table 16. Baseline Indictors for checking Systems Efficiency and Profitability
INDICATORS RUBBER SYSTEM
PCR DRC
NPCO NPCI
EPC MONOCULTURE
0.41 0.31
0.47 0.59
0.45
AGROFORESTRY
0.48 0.37
0.43 0.69
0.42 Source: Computed from Table 15
5.2.1. Profitability
Results in Table 15 also show variations in profitability i.e. both in private and social terms across the two systems smallholder rubber monoculture and
smallholder rubber agroforestry systems. Obviously production costs are the reason for this variation. Similarly, transportation costs play an equally important role as
well. With regard to private profitability, the results show that the NPV of private profits for both monoculture and agroforestry were substantially positive Tables 15.
This means that smallholder’s rubber was competitive under the existing technologies, output prices, input prices and policy transfers. According to these
results, smallholders would be able to expand in the future, though agroforestry needs more improved technologies than monoculture. The cultivation of intercrops like dry
land rice and chilly before positive cash flow could mitigate farmer’s losses but did not help in increasing farmer’s gains from their rubber farms.
On the other hand, social profits, which are an efficiency measure, are all positive under both systems, indicating that scarce resources were well utilized by
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producing at social costs that did not exceed the importation costs. Monoculture system had a bigger NPV as compared to Agroforestry system and therefore,
monoculture was found to be more efficient under the existing technologies and efficient policies. Monoculture system is also capable of competing favorably in the
world market as compared to its counterpart. This also suggests that smallholders under both systems had comparative advantage under the existing technologies and
efficient policies and the systems could survive without assistance from the government.
Although both systems are profitable, Monoculture is more potentially profitable enterprise than rubber agroforestry. The difference between PCR and DRC
could also be as a result of overvalued exchange rate and inefficiencies in the production cost structures.
From Table 16; it is seen that values of PCR Private Cost Ratio for rubber monoculture and rubber agroforestry were much lower than one, especially rubber
monoculture. This also suggests that the value added of the existing systems could afford domestic factor costs.
5.2.2. Domestic Resource Cost
