Economic Feasibility and Strategic Development of Urban Organic Rice Farming: Evidence from Semarang City, Indonesia

Department of Agribusiness, Faculty of Economics and Business, Universitas Muhammadiyah Semarang, Indonesia

^* Corresponding author: This email address is being protected from spambots. You need JavaScript enabled to view it.

Abstract

This study evaluates the economic feasibility and strategic development of organic rice farming in Semarang City, Indonesia, as a response to the growing demand for sustainable agricultural practices. The research addresses the limited empirical evidence on the financial viability of organic rice farming in urban areas, which is crucial for farmers, policymakers, and stakeholders to make informed decisions. A quantitative-descriptive case study approach was employed, involving purposive sampling of organic rice farmers, field surveys, and in-depth interviews. Financial feasibility was assessed using Net Present Value (NPV), Internal Rate of Return (IRR), Benefit-Cost Ratio (B/C), and Payback Period, while strategic analysis was conducted using SWOT. The results show that organic rice farming is financially viable, with a positive NPV of IDR 24.3 million, IRR of 18.6%, B/C ratio of 1.63, and a discounted payback period of 1.7 years. SWOT analysis indicates that the industry is positioned in Quadrant I (aggressive strategy), suggesting strong internal capacity and favorable external opportunities. These findings prove that organic rice farming can be developed as a profitable and sustainable agribusiness model in urban areas. The study contributes to theory by integrating financial feasibility with strategic analysis and offers practical recommendations for policymakers.