Financial analysis and contribution of arabica coffee for sustainable coffee farming in Sitolu Bahal Village, Lintongnihuta Subdistrict, Humbang Hasundutan Regency

Abstract

Coffee is one of the leading plantation commodities which has an important role in the economy. Coffee acts as a provider of employment, a source of income, and foreign exchange through exports. However, in carrying out coffee farming, farmers experience obstacles that can affect the level of income contribution from coffee farming which ultimately affects family income and the sustainability of coffee farming. The purpose of this study was to determine the financial feasibility of Arabica coffee farming and to determine the contribution of Arabica coffee agribusiness income to family income and sustainability of Arabica coffee farming. The determination of the research area was carried out by purposive sampling (sampling with a specific purpose) because Sitolu Bahal Village has the largest land area in Lintongnihuta Subdistrict. The analytical method used was the feasibility analysis, namely the analysis of NPV, Net B/C, and IRR methods, and the analysis of the proportions (contribution of family income) method. The research results showed that the NPV value was IDR 10,682,488.69, the Net B/C value was 28.85, and the IRR value was 44.24%. The contribution of Arabica coffee farming income to family income was 13%. This high contribution shows that the farming business is sustainable.