Financial feasibility of lime (citrus aurantifolia) farming in Tanah Datar District, West Sumatra

Abstract

Lime (Citrus aurantifolia) farming is one of the subsystems that form the lime agribusiness system in Tanah Datar District. This business has the potency to be developed. This study aimed to determine the feasibility of lime farming in Tanah Datar District in terms of financial aspects. This study used a survey method with a sample of 30 farmers in Padang Ganting Sub District, Tanjung Emas Sub District, and Lintau Buo Sub District, West Sumatra - Indonesia. Data were analyzed using investment criteria B / C, NPV, IRR, and sensitivity analysis. The analysis shows that the interest rate is 13% and the selling price is IDR 4.300 / Kg during the productive age (15 years), the value of B / C is 1.92, NPV is IDR 51,809,117 and IRR is 37%. Sensitivity analysis shows that the selling price is IDR 500 Kg, then the business is not feasible. While the selling price of IDR 846 / kg, Break Event Point (BEP) is reached. It can be concluded that lime farming is feasible. However, policies in trade and product use are needed so that the selling price does not fluctuate, and farmers do not experience losses.