Rising demand, steep rise in the price of synthetic rubber and reduced supply from some previously dominant rubber-producing countries have contributed to a sharp rising trend of the price of natural rubber over the last decade. The price rise has naturally induced steps for increased production. In India, the scope of further area expansion in traditional areas being limited, there has been some effort to extend rubber plantation to nontraditional areas, such as Tripura, Assam and Meghalaya in the northeastern part of the country. The present study on rubber production in Goalpara District of Assam is induced by the necessity to examine the economic viability and sustainability of the activity in such nontraditional areas. Backed by the Rubber Board, rubber production in Goalpara has recorded impressive growth. Investigation at the farm level shows that the rate of returns on investment in rubber is highly impressive under the prevailing price scenario and remains economically viable and sustainable even at much worse price scenarios. The fact that small and marginal landholders, especially from tribal communities, are the majority participants in the rubber plantation in the district, implies that this new form of economic activity has contributed significantly to economic empowerment at the grassroots. However, there are some ambiguities regarding ownership of land holdings under group growers, which need to be sorted out to avoid long-term adverse consequences on land use in the district.

Natural rubber is one of the most versatile industrial raw materials of plant origin. Since 2001, increasing trend in the price of natural rubber has been observed with quadrupling of the price between 2001 and 2008. Rising demand, steep rise in the price of synthetic rubber, reduced production and supply from some previously dominant countries, such as Malaysia, are the factors contributing to the price rise of natural rubber. All these created conditions favorable for further increase in production of natural rubber and also an opportunity to spread rubber plantation to new areas. Krishnakumar and Meenattoor (2000) observed that scope of further area expansion in traditional areas in India like Kerala being limited, there has been an effort to extend rubber plantation to nontraditional areas in the country, the Northeastern region being one of these. Rubber production in North-East first got established as a significant economic activity in Tripura, and has been gathering momentum in the Garo Hills of Meghalaya and Cachar, Karbi Anlong, and Goalpara District of Assam since the early 1980s. The present study on rubber production in Goalpara is induced by the necessity to examine economic viability and sustainability of the activity in such nontraditional areas.

The principal research question underlying the exercise has been whether rubber production is an economically viable activity in the present setup and also economically sustainable in the longer term. Another concern of the study is to see whether the rubber producers have been able to secure a price commensurate with the price prevailing at the national level. Secondary data regarding total area under plantation, production, productivity, price and price trends and land tenure system are collected from the Regional and Field Offices of the Rubber Board and also from the Board's monthly journal Indian Rubber Statistics. The secondary data were useful for estimating growth trends in area, production and yield of rubber in Goalpara.

Rest of the study is based on primary data collected through a sample survey conducted in the Autumn of 2008 of 78 randomly selected rubber producers of the district. Profitability from rubber production has been computed from the actual cost incurred and the expected returns. To examine the economic viability and sustainability of rubber production, various criteria indicating the rate of return on investment, such as Payback Period (PBP), Net Present Value (NPV), Benefit-Cost Ratio (BCR), and Internal Rate of Return (IRR) have been calculated.

Agricultural Economics Journal, Rubber Production, Nontraditional Areas, Capital Investment, Government Agencies, Community Processing Centers, Rubber Plantation, Government Forest Lands, Goalpara District, Economic Empowerment.