Smallholder rice farmers in Madagascar face significant economic challenges due to climate-related disasters such as droughts and floods. Qualitative research was conducted through semi-structured interviews and participatory observation in nine rice villages across Madagascar’s central highlands. Farmers reported that direct sales to supermarkets and cooperatives provided more consistent income streams compared to traditional barter systems, with a proportion of 65% farmers benefiting from these markets post-disaster. Local market dynamics play a crucial role in enhancing the economic resilience of smallholder rice farmers by providing alternative income sources during recovery phases. Government policies should prioritise strengthening local market infrastructure and supporting farmer cooperatives to ensure sustained income stability for affected communities.