Gross margin, profitability index, and financial feasibility analyses of potato farming: Empirical facts from Gowa Regency, Indonesia

Abstract

Abstract This study aimed to analyze production costs, gross margins, profitability, and financial viability of potato farming in Gowa Regency. Gowa Regency is the largest potato production center in South Sulawesi Province, Indonesia. The sample in this study, which was randomly selected, was 131 potato farmers from a total population of 1,840 people. Then, the data used was primary data obtained from structured interviews using questionnaires that have been made before. In an effort to achieve the objectives of this study, a quantitative approach was used with data analysis methods: cost analysis, revenue, total income, net profit, rate of return, capital turnover, and profitability index. The results showed that potato production costs per growing season incurred by potato farmers amounted to IDR 45,725,516/ha. Furthermore, the average potato production was 17,951 kg/ha with a selling price of IDR11,351/kg, resulting in a gross margin of IDR158,385,421/ha and a net income of IDR158,043,845/ha. The rate of return on potato production was 3.49 percent and the turnover of potato farming costs was 596.56. The calculation of the profitability index of potato farming amounted to 0.76. This figure shows that every 1.00 rupiah of sacrifice incurred by farmers in potato farming is 0.76.

Access to Document

Other files and links

• Link to publication in Scopus
• Open Access Version Available

Fingerprint