Valuation of rubber farming business in support of food security: a case study in Pulang Pisau Regency

Abstract

Government efforts to restore peat lands should consider to environmental benefits and considerable economic benefits for local communities. Rubber plant is one of the most cultivated commodities on peat lands and contributes to farmers’ income. Income from rubber business can improve their access to food sources to support food security. To ensure the sustainability of income from this business, this study aims to evaluate the rubber plantation business, map the marketing chain, and determine the contribution to household income. The research location is in Buntoi and Mantaren 1 villages, Pulang Pisau Regency, Central Kalimantan Province. Data are collected through in-depth interviews with farmers and rubber commodity marketers. The business valuation methods use Net Present Value (NPV), Internal Rate of Return (IRR), and Benefit Cost Ratio (B/C Ratio). The results of the analysis show that the rubber plantation business meets the criteria for feasibility with a positive NPV value (cash inflow is greater than cash outflow), IRR is greater than the rate of return, and B/C is above 1. The rubber commodity marketing chain consists of farmers, traders, business groups, and processing industries. Farmers as producers play an essential role in ensuring the sustainability of the products released by considering the environmental aspects of the peat ecosystem characteristics. On the other hand, the processing industry plays an important role as a potential partner who can work directly with farmers/communities to guarantee the products released by the community and increase the added value of the products. Income from the rubber business has an important role in household income as well as supporting economic access to food.