The hidden vulnerabilities behind financial sustainability: a case study of a sugarcane farm business in Pemalang City, Central Java, Indonesia

Authors

  • Lutfi Zulkifli Master’s Degree in Agribusiness Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia https://orcid.org/0000-0003-1303-9644
  • Ike Sitoresmi Mulyo Purbowati Phd Degree in Food Technology, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia https://orcid.org/0000-0001-6984-1789
  • Adi Indrayanto PhD Degree in Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia
  • Gunawan Wijonarko PhD Degree in Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia
  • Ali Maksum Master’s Degree in Food Technology, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia https://orcid.org/0000-0003-1744-8621
  • Hana Hanifa Master’s Degree in Soil Science, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia https://orcid.org/0000-0003-3610-7646
  • Risq Naila Khusna Syarifah Master’s Degree in Agronomy, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia
  • Dian Novitasari Jenderal Soedirman University

DOI:

https://doi.org/10.18472/SustDeb.v14n3.2023.50914

Keywords:

Vulnerability, Climate Change , Financial , Feasible Study, Sugarcane, Farm Business

Abstract

 

This study assesses the financial viability of a 4-hectare sugarcane farming enterprise operated by Perhutani, an Indonesian State-Owned Enterprise. The farm is situated in the geographical limits of Pemalang City, which is located in the Central Java Province of Indonesia. This study employs a financial feasibility analysis approach that involves the computation of key financial indicators such as Net Present Value (NPV), Internal Rate of Return (IRR), Pay Back Period (PBP), Benefit Cost Ratio (BCR), and the application of sensitivity analysis. Overall, the assessment of the viability of a 4-hectare sugarcane farming enterprise indicates that it is financially feasible and has the potential to operate as a sustainable business. This conclusion is drawn from the positive numerical values obtained through various financial analysis techniques. Nevertheless, it is evident from the conducted sensitivity analysis that sugarcane farming is a highly susceptible business to fluctuations in prevailing conditions. When molasses production experienced reductions of 10% and 15%, most financial feasibility analysis estimates yielded negative values. The issue of production vulnerability extending beyond economic feasibility has been rendered inconspicuous by many reasons, including climate change.

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Author Biographies

Lutfi Zulkifli, Master’s Degree in Agribusiness Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Master’s Degree in Agribusiness Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Ike Sitoresmi Mulyo Purbowati, Phd Degree in Food Technology, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Phd Degree in Food Technology, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Adi Indrayanto, PhD Degree in Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

PhD Degree in Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Gunawan Wijonarko, PhD Degree in Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

PhD Degree in Management, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Ali Maksum, Master’s Degree in Food Technology, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Master’s Degree in Food Technology, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Hana Hanifa, Master’s Degree in Soil Science, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Master’s Degree in Soil Science, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Risq Naila Khusna Syarifah, Master’s Degree in Agronomy, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Master’s Degree in Agronomy, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

Dian Novitasari, Jenderal Soedirman University

Master’s Degree in Agricultural Technology, Lecturer, Jenderal Soedirman University, Purwokerto, Central Java, Indonesia

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Published

2023-12-10

How to Cite

Zulkifli, L., Purbowati, I. S. M., Indrayanto, A., Wijonarko, G., Maksum, A., Hanifa, H., … Novitasari, D. (2023). The hidden vulnerabilities behind financial sustainability: a case study of a sugarcane farm business in Pemalang City, Central Java, Indonesia. Sustainability in Debate, 14(3), 207–218. https://doi.org/10.18472/SustDeb.v14n3.2023.50914

Issue

Vol. 14 No. 3 (2023): Sustainability in Debate / Sustentabilidade em Debate

Section

Articles - Varia

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