Farming Sustainability: A Sensitivity Analysis

Abstract

The sustainability of broiler farming cannot be separated from the sensitivity of business feasibility. The very high price fluctuation since before the pandemic until now has become a threat to business sustainability. This study reveals the characteristics of broiler farming and the impact of price fluctuations on the feasibility of broiler farming in Banyumas Regency, Indonesia. This study used a survey method. 60 broiler farmers who are members of the contract growing were randomly selected as respondents. Data were analyzed using descriptive statistic. The impact of price fluctuations was calculated from a business feasibility simulation of changes in product selling prices. The results showed that the average broiler farm size was 5,444 head/period and cultivated 5 times in one year. The average investment was IDR 154,735,835.48 and earned profit IDR 70,045,228.33 per year with a positive NPV and IRR was 33.36 percent. Sensitivity analysis with a scenario of a decrease in selling prices by 3 percent shows that farmer profits fall to IDR 36,459,511.28 per year, with a negative NPV and an IRR of 7.57 percent, below the reference interest of 9.94 percent.