Smallholders contribute significantly to the natural rubber production in Sri Lanka. However, it was seen in the recent past that the smallholder extents declining and they were moving out of the industry. The main reason associated with this was the low prices received by the smallholders. Though a recent hike in prices was observed, the income status of the small farmer is still very low. Therefore, it is necessary to understand why the high prices quoted at the auctions are not received by the producers and the reasons why smallholders are not taken on producing high quality rubber sheets. The inquiries into marketing of smallholder production hitherto have been very minimal and have been limited to study of marketing channels. Therefore, this research attempted to study the existing status of the smallholder rubber marketing through quantitative and participatory approaches, taking into consideration the marketing channels of smallholder production, marketing efficiency in terms of technical (production) and pricing efficiency. Possible improvements on the exisiting system of marketing are also discused in this paper.