Financial Feasibility of Rubber Plantation in Southeast Sulawesi

Abstract

Indonesia is the second rubber-producing country in the world. Rubber is not a priority crop in Southeast Sulawesi, but there exist some smallholder rubber plantations in the province. This research aimed to analyze feasibility of rubber plantations in Southeast Sulawesi province. The research was conducted in Puriala Subdistrict, Konawe District, Southeast Sulawesi Province, from September 2022 to February 2023. Data analysis used Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-Cost Ratio (BCR), Payback Period (PP), and Sensitivity Analysis. Data collection methods included interviews, observation, and documentation. Research results showed that the NPV was Rp96,840,424, BCR = 1.18,. IRR = 24%, and PP = 9.13 years, indicating that rubber plantation is financially feasible. The results of the sensitivity analysis of a 10% decrease in sales price or a 10% increase in costs showed that the plantation is still feasible. However, the simultaneous 10% decrease in sales price and a 10% increase in production cost indicated that plantation is no longer feasible. Given that the data used are only 12 years from the potential 25 years of economic life of the plantation, rubber plantation is highly feasible in the province.