Investment in Coffee Farming Based on Community Encouragement

Abstract

The primary objective of the study conducted in the Kintamani District of Bali was to evaluate the economic viability and financial feasibility of engaging in Arabica coffee cultivation. Additionally, the research sought to investigate the possibility of leveraging Arabica coffee production as a means to attract tourists to the region. A rigorous data analysis methodology was implemented, commencing with the identification of a sample of 100 farmers through the utilisation of a multistage sampling technique to guarantee inclusivity of the wider population. The assessment of profitability was conducted with a high degree of rigour, wherein the present value of both the benefits and costs related to Arabica coffee farming were thoroughly compared. The assessment of financial feasibility involved the utilisation of key metrics, namely the Net Benefit Cost Ratio (Net B/C), Net Present Value (NPV), and Internal Rate of Return (IRR). The metrics presented offer quantitative insights, indicating that returns on investment in Arabica coffee farming become evident within the period spanning from the fourth to the thirtieth year. The net benefit-cost (B/C) ratio was calculated to be 4.443, indicating a favourable financial outcome for the venture. Additionally, the venture exhibited a positive net present value (NPV) of Rp. 107,672,034 and an impressive internal rate of return (IRR) of 35.06%. These findings confirm the financial viability of the project. The findings of this study indicate that a majority of the farmers surveyed (85%) expressed a favourable attitude towards the establishment and growth of coffee tourism destinations. These insights were obtained through the use of qualitative research methods, specifically in-depth interviews conducted with a sample size of five informants. This study offers essential insights for farmers and prospective investors pertaining to investment expenditures, economic feasibility, and profitability prospects in the cultivation of Arabica coffee. Furthermore, this highlights the potential opportunities for the development of ecotourism in the Kintamani region of Bangli, Bali, thereby enhancing our comprehension of the local economic environment.