By Amy Sawitta Lefevre and Apornrath Phoonphongphiphat
BANGKOK (Reuters) - Tens of thousands of Thai rubber farmers protesting against a sharp drop in prices escalated protests across southern Thailand on Wednesday, cutting off access to large swathes of the region by blocking roads leading to tourist and commercial hubs.
Around 20,000 protesters are gathered at three main rally sites in the south watched over by a heavy police presence.
Protest leaders on Wednesday threatened to shut down Surat Thani airport, a transit point for tourists travelling to nearby islands including Pha Ngan and Samui, if their demands are not met by Wednesday.
Officials say they will not hesitate to use force if protesters move to block the airport.
"Under no circumstances will we accept it if they shut down the airport. This will ruin tourism not to mention the country's image," Deputy Prime Minister Pracha Promnok told reporters.
"If the protesters move to shut down Surat Thani airport, we will have not choice but to use force."
Farmers in the country's main southern rubber-producing region are demanding greater state support after a slowdown in demand from China and concerns over global economic growth sent prices tumbling to multi-year lows in mid-2012. China accounts for 35 percent of global rubber consumption.
Rubber farmers mainly support the opposition Democrat Party and have accused Prime Minister Yingluck Shinawatra of supporting rice farmers in her key constituencies through a rice-buying program, while neglecting rubber farmers in the south of the country.
The protests, now into a second week, could have a ripple effect, impacting the country's other major sources of revenue including tourism, say industry insiders.
"If the protest is prolonged there will be a definite impact on business overall and not just the rubber industry. The tourism sector, investors' confidence and national security will all be affected," Pornsilp Patcharintanakul, vice chairman of the Thai Chamber of Commerce, told Reuters.
Thailand is the world's biggest rubber producer and exporter with around 90 percent of its output heading overseas. Thailand is forecast to produce 3.8 million metric tons of rubber in 2013.
The protests have disrupted distribution systems and delayed thousands of metric tons of Thai rubber shipments.
Protesting farmers blocked a key route leading to the country's south on Tuesday after a cabinet decision not raise the price of smoked rubber sheets from 75 baht ($2.34) per kilogram to 120 baht ($3.74)per kilogram, one of the protesters' primary demands.
Benchmark smoked rubber sheet (RSS3) was at $2.75 per kg on Wednesday, barely changed from $2.80 per kg hit in August 2012, when tumbling prices prompted government intervention that expired in May. RSS3 prices are less than half of the record high of $6.40 per kg touched in February 2011.
($1 = 32.1150 Thai baht)
(Editing by Michael Perry)