Factors influencing conversion of rubber lands to alternative crops in Sri Lanka: a case study in Palindanuwara in Kalutara District

Using binary logistic model with primary data collected from a sample of 300 former and present rubber smallholders in Palindanuwara DS division in Kalutara district, this study attempts to answer the question of why rubber smallholders convert to alternative crops despite increasing rubber prices. Our findings concludes that the individual decision to transit from rubber to alternative crops is positively influenced by expected net income and expected leisure time after conversion. Relative profit margin of the old crop (rubber) compared to the new crops is found to negatively influence the decision to convert. However, conversion at national level is mostly due to money illusion where smallholders misinterpret an increase in relative income as an increase in relative profit. Smallholders’ gender, age and education were proven irrelevant to the decision of convert.