Financial feasibility of developing early-stage organic rice farming: A case study in Tasikmalaya of Indonesia

Abstract

Intensive rice farming using inorganic fertilisers creates the problem of soil fertility degradation and further impacts decreasing rice productivity. Alternative technologies are needed to increase production while maintaining the sustainability of agricultural resources through organic rice farming. This study aims to 1) analyse the financial feasibility of organic rice farming, 2) identify the constraints in developing organic rice farming, and 3) formulate an alternative policy to develop organic rice farming in Tasikmalaya, Indonesia. The primary data were collected from 30 organic rice farmers. Traditional rice farmer’s groups were also interviewed for comparison. The financial feasibility was analysed using cost and benefit analysis. The results showed that organic rice in Tasikmalaya is financially profitable, with the R/C ratios ranging from 1.14 to 1.45. However, the profit is still much lower than traditional rice farming. The main constraint to increasing organic rice profit is that the price of organic rice grain is not different from traditional rice since marketing institutions have not yet been established. To increase the profit of organic rice farming, the government should encourage farmers to keep growing organic rice, accompanied by technical guidance and establishment of organic rice processing and marketing institutions.