The gun attack happened early Sunday at a protest site at a railway crossing at the Ban Toon-Cha-uat road.
According to reports, a group of armed men fired multiple gun shots at the rubber and oil palm growers about 3am.
Sirichai Boonnuwong, 29, was hit under one eye and in the chest, while Sithisak Chai-ngam, 25, was shot in the neck. Sirichai later succumbed to his injuries.
After the attack, the rubber protesters demanded the government take responsibility for the incident regardless of who carried out the attack.
The protesters said the government must be held to account because the protest stemmed from its failure to tackle falling rubber prices.
They also told the government to send representatives to hold talks by 11am Monday or face the consequences.
They did not elaborate on their possible actions. The protesters were asking the government to guarantee a price for unsmoked sheet rubber of 120 baht per kilogramme and for oil palm at 7 baht/kg. They rejected the government's subsidy offer of 1,260 baht per rai.
The shooting Sunday raised concerns the protest would intensify and might lead to violence.
Critics of the government called on ministers to get more involved in the problem-solving process.
Rong Boonsuayfan, an academic from Walailak University in Nakhon Si Thammarat, said the government had closed the door on the protesters.
Southern farmers are threatening to stage a rally Tuesday if their demands are not met.
"It is possible it will become a political conflict and get more complicated," he said. "The government shouldn't say politicians are behind the protest.
"The government is irresponsible and weak [because] it is acting too slowly."
Suriyasai Katasila, coordinator of the Green Politics Group, called for authorities to quickly find the culprits. The attack had ruined a chance, which was already slim, for further negotiations between the protesters and the government, he said.
The Yingluck Shinawatra administration had allowed the protest at two sites in Cha-uat district to drag on for 10 days, Mr Suriyasai added.
He said the government believed the protest was political and had used state mechanisms to drive a wedge among protest leaders.
Moreover, it had instigated the people's hatred towards the protesters, causing them to feel isolated.
While the people were in deep trouble, the prime minister was busy on her overseas trips and had not thought of going to see the protesters herself, Mr Suriyasai said.
Police and provincial authorities Sunday rejected rumours circulating among some protesters that the shooting attack was carried out by state officials.
Nakhon Si Thammarat police chief Ronnapong Saikaew said police had two theories.
The attack might have stemmed from a row among protesters, or from disgruntled residents who were affected by the blockade.
Speaking after questioning Mr Sithisak, Pol Maj Gen Ronnapong said police investigators had obtained information about the gunmen and the investigation would become clearer in a few days.
National police chief Adul Saengsingkaew Sunday offered a 100,000-baht reward for information that would lead to the arrests of the attackers.
Nakhon Si Thammarat governor Wiroj Jiwarangsan also offered a 50,000-baht cash reward.
Democrat MP Thaworn Senniam urged the government to take responsibility and clear any doubts over the gun attack.
Democrat MP for Nakhon Si Thammarat Thepthai Senpong said the government should deal with the problem before the situation gets out of hand.
"I don't want it to get complicated or violent. I think it is in part caused by political bias," he said.
Meanwhile, in Surat Thani. the association of kamnans and village heads Sunday backed the rally of southern rubber farmers in Phunphin district planned for Tuesday.
Led by Khamron Thaugsuban, the association also urged state authorities not to use force against the protesters.
Surat Thani governor Chatpong Chatphut Sunday called a meeting with 19 district chiefs to prepare for Tuesday's rally.