Analysis of income risk of credit use on Arabica coffee plants in North Sumatra

Abstract

Capital is an important component in Arabica coffee cultivated. Capital is used to meet the costs of caring for coffee plants. Farmers in meeting the need for capital were taking loans by credit. Credit can reduce the risk of income. North Sumatra is one of the Arabica coffee producing provinces in Indonesia. Karo and Dairi Regency are high Arabica coffee producing regions in North Sumatra. The purpose of this research was to analyse the income risk of Arabica coffee credit users in North Sumatra. The research was conducted by interviewing Arabica coffee farmers in Karo and Dairi Regency. The number of respondents was 50 farmers by purposive sampling. The data were analysed by using farm analysis which was then tested by Independent Sample T-Test and risk analysis of coefficient of variation. This research showed that there are differences in average income between credit user farmers and non-credit user farmers. The average income of credit user farmers is 22,418,482 IDR/hectare/year, while the average income of farmers who are not credit user is only 15,153,119 IDR/hectare/year. The risk of income of farmers’ credit user is smaller than farmers’ non-credit user (0.233 < 0.292).