Profitability Analysis of Coffee Farming in Order to Reduce Poverty In Wonogiri Regency

Agribusiness Study Program, Faculty of Agriculture, Sebelas Maret University, Ir. Sutami Street No. 36 A, Kentingan, Surakarta 57126, Indonesia, Tel/Fax: (02171) 637457

^* Corresponding author: indah.nurhidayati@staff.uns.ac.id

Abstract

The plantation sector is vital to Indonesia's economic development, with coffee being a key commodity that contributes 7% to global production. Wonogiri Regency possesses significant potential for coffee cultivation, supported by favorable geographical conditions. Although coffee farming has a long tradition in the region, many farmers temporarily shifted to cloves due to market fluctuations. A subsequent 35% decline in clove prices has now prompted a return to coffee. However, farmers continue to face challenges in managing their farms systematically. This study evaluates the benefits and feasibility of coffee cultivation as a strategy to enhance farmer income and economic resilience. Using a descriptive quantitative method, data was collected from 60 local coffee farmers. The analysis employed cash flow indicators, Gross Profit Margin (GPM), Net Profit Margin (NPM), Benefit-Cost Ratio (B/C), and Revenue-Cost Ratio (R/C). The results indicated a consistent positive cash flow, with revenues surpassing production costs. The farming demonstrated high profitability (GPM: 83%; NPM: 66%) and excellent viability (B/C Ratio: 5.10; R/C Ratio: 6.10), confirming it as a robust and profitable business model. Furthermore, these findings underscore the role of coffee cultivation in advancing the Sustainable Development Goals (SDGs), particularly in reducing poverty (SDG 1).