Proceeding of the First International Graduate Conference (IGC) On Innovation, Creativity, Digital, & Technopreneurship for Sustainable Development in Conjunction with The 6th Roundtable for Indonesian Entrepreneurship Educators 2018 Universitas Syiah Kuala October, 3-5, 2018 Banda Aceh, Indonesia

Research Article

Patchouli Oil Farming: An Alternative to Poverty Alleviation through Smallholders Business

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  • @INPROCEEDINGS{10.4108/eai.3-10-2018.2284267,
        author={Ernawati Ernawati and Putri Bintusy Syathi and Syaifullah Muhammad and Indra Indra and Hesti Meilina},
        title={Patchouli Oil Farming: An Alternative to Poverty Alleviation through  Smallholders Business},
        proceedings={Proceeding of the First International Graduate Conference (IGC) On Innovation, Creativity, Digital, \& Technopreneurship for Sustainable Development in Conjunction with The 6th Roundtable for Indonesian Entrepreneurship Educators 2018 Universitas Syiah Kuala October, 3-5, 2018 Banda Aceh, Indonesia},
        publisher={EAI},
        proceedings_a={IGC},
        year={2019},
        month={5},
        keywords={patchouli smallholder business opportunity poverty},
        doi={10.4108/eai.3-10-2018.2284267}
    }
    
  • Ernawati Ernawati
    Putri Bintusy Syathi
    Syaifullah Muhammad
    Indra Indra
    Hesti Meilina
    Year: 2019
    Patchouli Oil Farming: An Alternative to Poverty Alleviation through Smallholders Business
    IGC
    EAI
    DOI: 10.4108/eai.3-10-2018.2284267
Ernawati Ernawati1, Putri Bintusy Syathi2,*, Syaifullah Muhammad3, Indra Indra4, Hesti Meilina5
  • 1: Agriculture Faculty of Syiah Kuala University
  • 2: Economics and Business Faculty of Syiah Kuala University
  • 3: Engineering Faculty of Syiah Kuala University
  • 4: Graduate School Program of Syiah Kuala University
  • 5: Atsiri Research Centre (ARC) of Syiah Kuala University
*Contact email: putri_syathi@unysiah.ac.id

Abstract

Patchouli oil farming is a farming business that has been carried out for many years in Aceh Province. This business was one of the most favored businesses, but now it has become one of the less desirable farming business because the selling prices fluctuations have discouraged farmers to continue the production. Therefore, this study examines the feasibility of patchouli cultivation as a source of smallholders' income by using business feasibility indicators. These indicators include B/C Ratio, Payback Period, and Return on Investment (ROI). The data collected through surveys based on the prepared questionnaire then analyzed qualitatively and quantitatively. The calculation result is B/C ratio of 1,9, ROI of 50,4% and a payback period of 7,9 months. The results of the analysis obtained indicate that the business is feasible to develop as a business for smallholders because it is profitable and has a payback period of investment in just one planting period. Furthermore, the fluctuations in patchouli oil prices did not make this business unfit to develop because this study found that the business was a feasible event when the selling price of patchouli oil was at the lowest level. However, the interest of smallholders to re-develop this business still needs to be improved and the socialization to promote this farming business as a source of income for smallholders needs to be employed as one of the local government policies in poverty alleviation efforts.