IDEAS home Printed from https://ideas.repec.org/a/eof/igimer/v1y2025i3id48.html

Economic Feasibility and Risk Assessment of Patin Aquaculture Agribusiness in Kampar Regency, Riau, Indonesia

Author

Listed:
  • Abdul Rahman Cemda

    (Universitas Muhammadiyah Sumatera Utara, Indonesia.)

Abstract

Purpose: This study evaluates the economic feasibility and assesses the financial risks associated with smallholder patin (Pangasius hypophthalmus) aquaculture in Kabupaten Kampar, Riau Province, Indonesia, to provide evidence-based recommendations for sustainable aquabusiness development. Materials and Methods: A descriptive-quantitative research design was employed with 60 smallholder patin farmers selected through purposive sampling. Data collection involved structured interviews, production record audits, financial document analysis, and direct pond observations. Economic feasibility was evaluated using Net Present Value (NPV), Benefit-Cost Ratio (BCR), Internal Rate of Return (IRR), and Payback Period (PP) at a 10% discount rate. Risk assessment incorporated Coefficient of Variation (CV), sensitivity analysis, Monte Carlo simulation (10,000 iterations), and scenario analysis. Statistical analysis was performed using SPSS 26. Results: The average NPV was IDR 127,450,000 (USD 8,497), BCR was 1.34, IRR was 24.6%, and PP was 2.8 years, indicating economic viability. Risk analysis revealed a CV of 0.42, suggesting moderate income variability. Monte Carlo simulation showed a 73.4% probability of positive returns. Sensitivity analysis identified feed cost (elasticity coefficient: -0.68) and market price (elasticity coefficient: 0.82) as critical risk factors. Under pessimistic scenarios, 31.7% of farms showed negative NPV. Conclusions: Patin aquaculture demonstrates economic feasibility under current market conditions, but faces significant risks from feed cost fluctuations and price volatility. Risk mitigation strategies including feed cost management, market diversification, and insurance mechanisms are recommended for sustainable development.

Suggested Citation

  • Abdul Rahman Cemda, 2025. "Economic Feasibility and Risk Assessment of Patin Aquaculture Agribusiness in Kampar Regency, Riau, Indonesia," Global Insights in Management and Economic Research, INSPIRETECH GLOBAL INSIGHT, vol. 1(3), pages 132-141, August.
    • Handle: RePEc:eof:igimer:v:1:y:2025:i:3:id:48
    DOI: 10.53905/Gimer.v1i03.22
    as

    Download full text from publisher

    File URL: https://journal.igiinsight.com/index.php/gimer/article/view/48
    File Function: Abstract page
    Download Restriction: no
    File URL: https://journal.igiinsight.com/index.php/gimer/article/download/48/52
    File Function: Full text
    Download Restriction: no
    File URL: https://libkey.io/10.53905/Gimer.v1i03.22?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Md Takibur Rahman & Rasmus Nielsen & Md Akhtaruzzaman Khan & Dewan Ahsan, 2021. "Perceived Risk and Risk Management Strategies in Pond Aquaculture," Marine Resource Economics, University of Chicago Press, vol. 36(1), pages 43-69.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Luna, Manuel & Pérez-Mon, Olaya & Becker, João Luiz, 2026. "Forecasting and managing price volatility in salmon production: A hybrid system using conformal prediction and dynamic hedging," International Journal of Production Economics, Elsevier, vol. 291(C).
    2. Sonja Radosavljevic & Ezio Venturino & Francesca Acotto & Quanli Wang & Jie Su & Alexandros Gasparatos, 2025. "Sustainable intensification of small-scale aquaculture systems depends on the local context and characteristics of producers," Papers 2502.18488, arXiv.org.
    3. Radosavljevic, Sonja & Acotto, Francesca & Wang, Quanli & Su, Jie & Gasparatos, Alexandros, 2026. "Pathways to sustainability or collapse in inland small-scale aquaculture systems: insights from a social–ecological systems model," Ecological Modelling, Elsevier, vol. 512(C).
    4. Ahmed, Ashif & Prodhan, Md. Masudul Haque & Islam, Md. Zohurul & Islam, Kazi Tasnim & Mitra, Sandip & Khan, Md. Akhtaruzzaman, . "Financial performance and productivity determinants of fish farms in Bangladesh," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 42(2).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eof:igimer:v:1:y:2025:i:3:id:48. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Relitha Hayatun Nugraha, S.Sos (email available below). General contact details of provider: https://journal.igiinsight.com/index.php/gimer .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.