High market demand for organic products

Oct 13, 2025 by thesweetdesigns.com 64 views

Financial Analysis of Organic Rice Farming in Lubuk Bayas Village: Examining the Feasibility and Profitability

Introduction

Organic rice farming has gained significant attention in recent years due to its potential to increase farmers' income and welfare while promoting sustainable agriculture practices. This research aims to explore the feasibility and profitability of organic rice farming in Lubuk Bayas Village, Perbaungan District, Serdang Bedagai Regency. The analysis includes production, revenue, and income costs, as well as break-even points, to provide a comprehensive understanding of the financial potential of this business.

Methodology

The research was conducted in Lubuk Bayas Village, where 10 organic rice farmers were selected as the sample population. The data collection process involved a survey, which included questions about production costs, revenue, and income. The data was then analyzed using financial ratio analysis, including the ratio of revenue to costs (R/C) and the ratio of benefits to costs (B/C). Additionally, break-even point analysis was conducted to determine the point at which the business becomes profitable.

Results

The results of the study showed that the total cost of organic rice farming production reached Rp 54,532,800, with an average of Rp 6,058,200 per land area of 1 ha. Meanwhile, the total revenue reached Rp 135,752,500, with an average of Rp 15,083,611 per ha. This generated a total revenue of Rp 82,528,700, with an average of Rp 9,169,856 per ha.

The financial analysis revealed that the R/C ratio was an average of 2.48, which is greater than 1, indicating that the business is profitable. The B/C ratio was also an average of 1.48, which shows that the benefits of the business are greater than the costs. Furthermore, the break-even point analysis showed that the average break-even point receipts were Rp 1,871,450, while the average revenue currently reached Rp 15,083,611. This indicates that the business has exceeded the break-even point in terms of acceptance.

Discussion

The results of this study indicate that organic rice farming in Lubuk Bayas Village has financial potential. Several factors contribute to this potential, including:

High market demand for organic products: Along with increasing public awareness of the importance of health and the environment, demand for organic products, including organic rice, continues to increase.
Higher organic rice selling price: Organic rice selling prices are generally higher than conventional rice, due to higher production costs and better product quality.
Government support for organic agriculture: The government provides various support to organic farmers, such as certification and training programs.

However, there are several challenges that need to be overcome to increase the sustainability of this business, including:

Relatively high production costs: Organic rice farming costs tend to be higher than conventional rice, especially for organic fertilizer and vegetable pesticides.
Limited access to the market: Organic farmers often find it difficult to get access to promising markets, especially markets that are willing to pay premium prices for organic products.
Lack of knowledge and technology: Some farmers still do not have enough knowledge about organic rice cultivation techniques and access to the right technology.

Conclusion

This research provides a clear proof that organic farming has a great potential to increase farmers' income and welfare. Increasing knowledge and access to technology, as well as the development of effective marketing systems, is the key to maximizing the potential of this business. The findings of this study can be used as a reference for policymakers, farmers, and other stakeholders to develop strategies for promoting sustainable agriculture practices and increasing farmers' income.

Recommendations

Based on the findings of this study, the following recommendations are made:

Increase access to markets: Efforts should be made to increase access to promising markets for organic farmers, including markets that are willing to pay premium prices for organic products.
Improve knowledge and technology: Training programs and workshops should be conducted to improve farmers' knowledge about organic rice cultivation techniques and access to the right technology.
Reduce production costs: Efforts should be made to reduce production costs, including the use of organic fertilizer and vegetable pesticides.
Develop effective marketing systems: Effective marketing systems should be developed to promote organic rice products and increase demand.

Limitations

This study has several limitations, including:

Small sample size: The sample size of this study was limited to 10 organic rice farmers, which may not be representative of the entire population.
Limited data collection: The data collection process was limited to a survey, which may not provide a comprehensive understanding of the financial potential of organic rice farming.
Limited analysis: The analysis was limited to financial ratio analysis and break-even point analysis, which may not provide a comprehensive understanding of the financial potential of organic rice farming.

Future Research Directions

Future research should focus on:

Increasing the sample size: Future research should aim to increase the sample size to provide a more comprehensive understanding of the financial potential of organic rice farming.
Collecting more data: Future research should aim to collect more data, including data on production costs, revenue, and income, to provide a more comprehensive understanding of the financial potential of organic rice farming.
Conducting more in-depth analysis: Future research should aim to conduct more in-depth analysis, including analysis of the impact of organic rice farming on the environment and the community.

References

[1] World Bank. (2020). Organic Agriculture: A Guide for Policymakers.
[2] Food and Agriculture Organization of the United Nations. (2019). The State of the World's Biodiversity for Food and Agriculture.
[3] International Fund for Agricultural Development. (2018). Organic Agriculture: A Key to Sustainable Development.

Note: The references provided are fictional and for demonstration purposes only.
Q&A: Financial Analysis of Organic Rice Farming in Lubuk Bayas Village

Introduction

Organic rice farming has gained significant attention in recent years due to its potential to increase farmers' income and welfare while promoting sustainable agriculture practices. In this Q&A article, we will explore the financial analysis of organic rice farming in Lubuk Bayas Village, Perbaungan District, Serdang Bedagai Regency. We will answer some of the most frequently asked questions about the feasibility and profitability of organic rice farming in this region.

Q: What is the total cost of organic rice farming production in Lubuk Bayas Village?

A: The total cost of organic rice farming production in Lubuk Bayas Village is Rp 54,532,800, with an average of Rp 6,058,200 per land area of 1 ha.

Q: What is the total revenue of organic rice farming in Lubuk Bayas Village?

A: The total revenue of organic rice farming in Lubuk Bayas Village is Rp 135,752,500, with an average of Rp 15,083,611 per ha.

Q: What is the ratio of revenue to costs (R/C) in organic rice farming in Lubuk Bayas Village?

A: The R/C ratio in organic rice farming in Lubuk Bayas Village is an average of 2.48, which is greater than 1, indicating that the business is profitable.

Q: What is the ratio of benefits to costs (B/C) in organic rice farming in Lubuk Bayas Village?

A: The B/C ratio in organic rice farming in Lubuk Bayas Village is an average of 1.48, which shows that the benefits of the business are greater than the costs.

Q: What is the break-even point receipts in organic rice farming in Lubuk Bayas Village?

A: The break-even point receipts in organic rice farming in Lubuk Bayas Village is an average of Rp 1,871,450.

Q: What is the average revenue currently reached in organic rice farming in Lubuk Bayas Village?

A: The average revenue currently reached in organic rice farming in Lubuk Bayas Village is Rp 15,083,611.

Q: What are the challenges faced by organic rice farmers in Lubuk Bayas Village?

A: The challenges faced by organic rice farmers in Lubuk Bayas Village include relatively high production costs, limited access to the market, and lack of knowledge and technology.

Q: What are the recommendations for promoting sustainable agriculture practices and increasing farmers' income in Lubuk Bayas Village?

A: The recommendations for promoting sustainable agriculture practices and increasing farmers' income in Lubuk Bayas Village include increasing access to markets, improving knowledge and technology, reducing production costs, and developing effective marketing systems.

Q: What are the limitations of this study?

A: The limitations of this study include a small sample size, limited data collection, and limited analysis.

Q: What are the future research directions for this study?

A: The future research directions for this study include increasing the sample size, collecting more data, and conducting more in-depth analysis.

Conclusion

Organic rice farming has a great potential to increase farmers' income and welfare while promoting sustainable agriculture practices. The financial analysis of organic rice farming in Lubuk Bayas Village shows that the business is profitable and has a high market demand. However, there are several challenges that need to be overcome to increase the sustainability of this business. By increasing access to markets, improving knowledge and technology, reducing production costs, and developing effective marketing systems, we can promote sustainable agriculture practices and increase farmers' income in Lubuk Bayas Village.

References

[1] World Bank. (2020). Organic Agriculture: A Guide for Policymakers.
[2] Food and Agriculture Organization of the United Nations. (2019). The State of the World's Biodiversity for Food and Agriculture.
[3] International Fund for Agricultural Development. (2018). Organic Agriculture: A Key to Sustainable Development.

Note: The references provided are fictional and for demonstration purposes only.