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Economic Feasibility Analysis of Carbonic Maceration Fermentation Technique Implementation for Ijen-Raung Arabica Coffee

In: Proceedings of the 4th International Conference on Economic, Business, and Accounting Studies (ICEBAST 2025)

Author

Listed:
  • Halil Halil

    (Jember University)

  • Kurniawan M. Nur

    (Politeknik Negeri Banyuwangi)

  • Driyanto W. Wicaksono

    (Politeknik Negeri Banyuwangi)

Abstract

Carbonic maceration (CM) is a promising post-harvest technique for enhancing speciality coffee quality, yet its financial viability for small-scale farmers, particularly in Indonesia, remains unexamined. This study addresses this gap by evaluating the economic feasibility of CM for Arabica coffee farmers in the Ijen-Raung region. Using a discounted cash flow analysis that included NPV, IRR, payback period, and B/C ratio, the research demonstrated that the method is highly feasible. The results showed an average NPV of IDR 19 million, an IRR of 44.1%, a payback period of 1.68 years, and a B/C ratio of 1.15. The adoption of CM led to a 51.9% increase in green bean selling prices, boosting average farmer income by 60.0%. Furthermore, the sensitivity analysis confirmed the project’s resilience, with the NPV remaining positive under both cost increases and price declines. These findings suggest that CM is an economically sustainable innovation for smallholders. The study concludes that the favourable 0.5% MSME tax policy supports such technology adoption and suggests that shifting incentives from input subsidies to post-harvest development could significantly improve the competitiveness of Indonesian speciality coffee.

Suggested Citation

  • Halil Halil & Kurniawan M. Nur & Driyanto W. Wicaksono, 2025. "Economic Feasibility Analysis of Carbonic Maceration Fermentation Technique Implementation for Ijen-Raung Arabica Coffee," Advances in Economics, Business and Management Research, in: Novi Puspitasari & Zainuri Zainuri (ed.), Proceedings of the 4th International Conference on Economic, Business, and Accounting Studies (ICEBAST 2025), pages 154-167, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-956-8_13
    DOI: 10.2991/978-94-6463-956-8_13
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